Utility's cutback plan could run afoul of state law

Rocky Mountain Power could face a legal battle with the state if the utility makes good on its statement this week that it might curtail electric service to its Utah customers because of the state's denial of the full amount of the company's rate-increase request.

Utah Public Service Commission spokeswoman Julie Orchard said Wednesday that state law requires the utility to provide "adequate electric service to Utah customers."

Rocky Mountain Power, the state's largest electric utility, said late Tuesday that effective Sept. 15, it would implement sweeping changes that include reducing customer service and eliminating discretionary maintenance. The utility also said that it would "ultimately consider curtailing electric service when the cost of purchasing electricity to serve customers in Utah is prohibitive and exceeds the funding the commission provided to purchase and generate electricity to serve customers."

The company on Tuesday filed a legal appeal challenging the commission's decision this month to approve a $33.4 million rate hike, when the utility had requested more than twice as much. The company received a 2.7 percent rate increase but had asked for a 5.6 percent hike.

Rocky Mountain Power said the increase the commission granted was not enough to meet the utility's needs to serve its growing customer base.

Orchard said that if the company believed it was not granted a sufficient rate increase to meet its obligations, then it should go through the appeal process set forth by state regulators, rather than cutting back on service.

Phil Powlick, director of the state Division of Public Utilities, said Wednesday that the utility's plans to curtail service "raise questions about Rocky Mountain Power's ability to meet their obligations to serve customers."

The state's utility watchdog on Wednesday criticized Rocky Mountain Power for its plan to scale back service. Michele Beck, director of the Committee of Consumer Services, said the commission had given careful consideration to each line item in the utility's request.

"If the utility doesn't have enough to run its business, then it's its own fault," she said.

Rocky Mountain Power in July filed an application with the commission requesting a total rate increase of $160.6 million, or 11.2 percent more than the utility was charging customers at that time.

Last December, the utility had requested an increase of $161.2 million. But the commission in March issued an order requiring the company to reduce its rate-increase request to $99.8 million. The company reduced its request again in May to $84.5 million and yet again in June to $74.4 million.