Rocky Mountain Power drops ultimatum

Rocky Mountain Power has dropped plans to make sweeping customer service cuts in protest of a rate denial, but the utility still needs more money to meet demand for electricity in Utah, the company's top executive said Wednesday.

The utility had said Sept. 2 it wasn't making enough money to keep up with demand for additional power. It said it would cut back overtime pay for linemen, slowing the response to some power outages. It also planned to eliminate "discretionary" maintenance. Ultimately, the utility said it might have to curtail electric service if the cost of buying power became "prohibitive."

But on Wednesday, instead of taking those steps, the president of Rocky Mountain Power said he was opening discussions with state officials and others to make a case for billions of dollars in electric system improvements needed in Utah.

"We decided that we are not going to change our outage response methods," Richard Walje told The Associated Press. "We have an obligation to serve. We recognize that."

Industry veterans said the utility's original plan to cut service was unprecedented. Rocky Mountain Power had sought a $74 million rate increase but was awarded just $33.4 million by the Utah Public Service Commission last month.

The new rates, 2.4 percent higher or an extra $16 a year for a typical household, took effect in mid-August.

Walje said the utility deserved more money to cover spending on power generation, substations and new transmission lines to serve "one of the fastest-growing, most robust economies in the country."

The most critical project, Walje said, is a 132-mile, high-voltage transmission line that would run from Salt Lake City to Downey, Idaho. The $800 million segment is part of a larger project needed to expand the company's transmission system to bring more power to Utah and serve other states. The larger project would cost $6 billion.

Walje acknowledged having some reservations about his announced service cuts within days of issuing the news release Sept. 2. The utility didn't follow up with a required filing with regulators spelling out how it planned to cut back service.

Nonetheless, Walje said the announcement opened broad discussions with state leaders, industrial customers and opponents of the full rate hike about the need to fund major improvements in Utah. Rocky Mountain Power, meanwhile, has appealed the commission's rate decision and filed for a separate increase even as the first request was being scrutinized.