Utility, customers to debate $29M fee-hike proposal

The state's largest electricity provider, the Utah Department of Public Utilities and representatives from several business users will debate the merits of a proposed $29 million fee hike request next week.

Rocky Mountain Power has asked the Utah Public Service Commission to raise the rate charged for funding the utility's energy-efficiency program by an estimated $29 million.

A conference is scheduled for Tuesday to discuss the issue.

Currently, customers pay a 2.1 percent rate for the "customer efficiency services" fee in their monthly electricity bill, Margaret Oler, Rocky Mountain Power spokeswoman, told the Deseret News Wednesday.

On an annual basis, the fee translates into about $29 million that goes to the so-called demand-side management cost adjustment, she said. The company said that every dollar of the fee goes to cover the administrative cost of efforts to conserve customer electricity usage.

If approved, the typical residential customer's bill would increase by $2.37 per month, Oler said. The current average charge is $1.41, she said.

Oler said the tariff is similar to an escrow account, which estimates the 12-month amount needed to cover costs, and is re-evaluated annually based on the actual surplus or deficit incurred. She said that the program had a $27 million shortfall over the past 12 months, which prompted the request for an increase.

The company has requested an increase from the current 2.1 percent rate to a 6.16 percent rate effective Aug. 1. The new rate would raise about $85.4 million over the next 12 months, according to a commission order calling for the conference next week.

The reason for the request stems from the exceptionally high participation by customers over the past several years, Oler said.

"This filing will take care of (the $27 million) we're in the hole on the account and will also provide for the projections of the costs going forward for about a year," she said.

She noted that since 2006, the number of customers participating in programs such as the "See Ya Later, Refrigerator" recycling effort has jumped to more than 118,000. Other programs also have seen dramatic increases, she said.

"For instance, participation in the home insulation program has … gone from seven in 2006 to 21,000 as of May 2009," Oler said.

Michele Beck, executive director of the Utah Office of Consumer Services, told the Deseret News that her agency is currently reviewing the utility's proposal. She said the agency has traditionally supported utility efforts to promote energy conservation as long as the consumer costs were reasonable.

E-mail: jlee@desnews.com