Declining costs of fuel to fire Utah Power & Light generators will mean a rate reduction for Utah customers. Just how much customers are entitled to has been the subject of two days of hearings before the Utah Public Service Commission.
UP&L officials agree a reduction is due and are offering an $8 million cut, to go along with some $22.7 million in reductions that have been ordered since 1985. The Utah Division of Public Utilities is calling for an additional $22.47 million reduction and the Utah Committee for Consumer Services - an advocate group for small business, residential and agricultural customers - wants an additional $40.8 million.Hearings concluded Friday and PSC commissioners took arguments under advisement. They also asked the parties to submit legal briefs supporting their positions. A final decision and order will likely be ready in about a month.
The commission is also expected to issue an order concerning energy balancing accounts, the part of the rate structure affected by fuel costs.
In 1978, because of escalating fuel costs, the Utah Legislature passed a bill allowing energy balancing accounts. The result was a two-tiered rate structure for utilities. One tier is based on the fixed costs of providing utility service (the general rate structure), while the other deals with the utility company's fuel costs (the energy balancing account). Periodically the PSC conducts hearings to ensure the balancing accounts are in line with actual costs.
The rapid decline in fuel costs, such as for coal to fire power generators, had made it difficult to keep the account in balance because a formal hearing has not been held since 1985. The anticipated policy guidelines should help eliminate major discrepancies in the future.
It may be a while before Utahns see the effects of the reduction on their power bills. UP&L plans to file for a general rate hearing in July and the actual implementation of the energy balancing account adjustment could be delayed and combined with the result of the general rate hearing case.
Power officials maintain the recent merger with Pacific Power & Light will result in a savings to Utah customers, which should mean good news this fall for Utah power users.