Utah electric-rate payers will have to dig a little deeper to pay their power bills, following the approval of a $33.4 million rate hike for Rocky Mountain Power by the Utah Public Service Commission.
The 2.4 percent increase approved this week will cost the average residential customer approximately $16 per year, according to a commission news release. And consumers may face more electric-rate increases: Rocky Mountain Power last month took the unusual step of making a second rate-increase request of $160.6 million, while its first request was still under review. The second hike would raise the typical residential customer's monthly power bill by 11.2 percent.
The commission on Monday approved only a fraction of what the state's largest electric utility had initially requested.
"The commission recognizes that any increase in customer rates is difficult, especially in these challenging economic times, but Utah law requires the PSC to implement justified rate increases to cover costs of electric energy production," commission spokeswoman Julie Orchard said in a news release Monday evening.
The commission urged consumers to make efforts to conserve energy, in order to reduce costs.
In December 2007, the utility requested an increase of $161.2 million or 11.3 percent. In March, the commission issued an order requiring the company to reduce its rate-increase request to $99.8 million.
The company reduced its rate-increase request again in May to $84.5 million and yet again in June to $74.4 million. But in its final order, the commission determined that the increase should only be $33.4 million.
Michele Beck, director of the Committee of Consumer Services, the state's utility watchdog group, called the decision "a very good outcome for consumers."
In rendering the decision, the commission set forth specific policy standards on what costs are acceptable and what methodologies are appropriate when utilities submit rate-increase requests, which was a victory for consumers, she said. This decision could be used as a precedent for future rate cases, she added.
When the second, $160.6 million request was made last month, Rocky Mountain Power spokesman Dave Eskelsen said the request would be reduced to $85.2 million, or a 5.7 percent increase, if the first request was fully approved by the Public Service Commission.
Since the commission this week approved less than half of Rocky Mountain Power's scaled-back first request, Eskelsen said Tuesday that the utility is still digesting the future implications of the decision."After reviewing the order, we'll probably have more to say on what actions the company will take in the future and how that will affect the case that was filed in July," he said.