Utah Power customers could receive a significant rate reduction in the future - and a refund for the past - if the state's Committee of Consumer Services and Division of Public Utilities have their way.
The committee, which acts as an advocate for residential and small commercial utility customers, seeks a $78.5 million electricity rate reduction (about 10 percent) in its initial position papers concerning PacifiCorp's current rate case before the Public Service Commission. It's the first Utah rate case for PacifiCorp in seven years.PacifiCorp is Utah Power's parent company.
Dan Gimble, senior economist for the committee, said its position is based on an analysis of PacifiCorp's operations and records and what committee staff feel the company should expect for "fair and reasonable" earnings last year.
"Our position right now is that rates in Utah need to be reduced by about $78.5 million (for 1997) . . .," Gimble said Friday. "We're hoping they go down by a large amount."
He said the state's Division of Public Utilities also filed its initial papers in the case, and it is calling for a $57.4 million reduction in Utah Power's rates.
In initial testimony filed in June, PacifiCorp asked that the PSC make permanent the $12.4 million interim price reduction the company agreed to in February 1997 and maintain stable prices for the state's consumers.
A PacifiCorp press release Friday said that the utilities division's proposal would reduce the company's authorized rate of return on equity to 10 percent, remove certain cost items from its filed financial results for 1997 and make other financial adjustments.
PacifiCorp's testimony asked for a 11.25 percent rate of return on equity.
"The proposals included in our filed testimony are reasonable and fair," Richard O'Brien, PacifiCorp's executive vice president and chief operating officer, said in the press release. "They continue our long-standing commitment to low prices and high quality service for our Utah customers."
PacifiCorp said prices for Utah customers have fallen 23 percent in the past decade.
According to a press release from the consumer services committee, it and the utilities division asked the PSC in January 1997 to investigate the rates PacifiCorp was charging.
That request for a rate case was put on hold when the 1997 Utah Legislature accepted the interim $12.4 million decrease from PacifiCorp and froze rates for one year in order to allow a legislative task force to examine issues relating to the possible deregulation of the electrical industry.
But the Legislature did not renew the price freeze this year, and the task force has yet to recommend any deregulation legislation. So the PSC is proceeding with a rate case.
Gimble said that, if the PSC agrees to decrease PacifiCorp's rates, it would be retroactive to early 1997 to make up for the time the rates were frozen.
So in addition to lower rates in the future, he said, Utahns could receive a refund for about two years of rates that were too high.
Hearings in the PacifiCorp rate case will start Oct. 13, with public witness day set for Oct. 23. The PSC is expected to rule on the case before the end of the year, and any rate changes probably will take effect early in 1999.