State leaders said Thursday that they had met with Rocky Mountain Power officials in recent days, prior to the company's decision this week to rescind its plans to reduce customer service due to what the utility said was an insufficient rate increase from the Utah Public Service Commission.

Senate President John Valentine and Senate Majority Leader Curtis Bramble told the Deseret News they met with company executives on Tuesday regarding concerns the utility had about the rate hike, which was lower than the company had expected.

Lisa Roskelley, spokeswoman for Gov. Jon Huntsman Jr., said the governor met with Rocky Mountain Power officials last week. Roskelley said the governor wanted to hear the utility's side of the story and to make sure that Utahns would have the power they need.

Valentine said the meeting he and Bramble had with Rocky Mountain Power included company president Richard Walje and Kevin Boardman, manager of government affairs for Rocky Mountain Power.

"Basically, what they were telling us was their perspective on what happened in the Public Service Commission," he said. "They didn't ask for anything, we didn't offer anything."

But Bramble said that during the conversation, he suggested that it would be in Rocky Mountain Power's interest to reconsider scaling back on service.

On Wednesday, Walje said he was opening discussions with state officials and others to make a case for billions of dollars in electric-system improvements that are needed in Utah. Walje also said the utility would back off of its previous edict to reduce customer service and maintenance because of inadequate funding granted by the commission in its most recent rate-hike order.

Rocky Mountain Power spokesman Dave Eskelsen said Thursday that the company would not discuss any specifics of any ongoing talks with state officials, but he said the utility has begun conversations to gain support for "the kinds of investments that Utah's growth requires."

That means building generating plants, transmission systems and distribution systems, as well as "billions of dollars of investment every year," he said.

Bramble said the Rocky Mountain Power officials told him that the commission's order did not allow the utility to recover some increasing "hard costs," such as property taxes.

He said if that proved to be true, then such an issue could possibly impact future investment in energy in Utah by outside interests.

"We want to make it easier for new capital to come in to develop alternative energy sources," he said. "If the Public Service Commission is denying out-of-pocket costs because they artificially want to hold prices down, that can send a very strong message and have a very chilling effect on the marketplace."

Bramble admitted that, at this point, he has only heard Rocky Mountain Power's perspective.

"I only have one side of it," he said. "I've taken their comments under advisement and over the next few weeks will be taking a look at what the rest of the story is, if any," he said. He added that he looked forward to meeting with commission members following their ruling on another rate-increase request from Rocky Mountain Power that is currently under re-review.

State law prohibits members of the Public Service Commission from commenting on pending cases.

Rocky Mountain Power, the state's largest electric utility, formally filed an appeal Sept. 2 with the commission to reconsider the reduced rate hike that had been granted. That same day, the utility said it would implement sweeping changes that would include reducing customer service and eliminating discretionary maintenance. The utility also said that it would "ultimately consider curtailing electric service when the cost of purchasing electricity to serve customers in Utah is prohibitive and exceeds the funding the commission provided to purchase and generate electricity to serve customers."

The company's legal appeal challenged the commission's decision to approve a $33.4 million rate hike, when the utility had requested more than twice that much. The company received a 2.7 percent rate increase but had asked for a 5.6 percent hike.

Rocky Mountain Power said the increase the commission granted was insufficient to meet the utility's needs to serve its growing customer base.

In July, the company filed an application with the commission requesting a total rate increase of $160.6 million, or 11.2 percent more than the utility was charging customers at that time.

Last December, the utility had requested an increase of $161.2 million. But the commission in March issued an order requiring the company to reduce its rate-increase request to $99.8 million. The company reduced its request again in May to $84.5 million and yet again in June to $74.4 million.

But in its final order last month, the commission determined that the increase should be $33.4 million.

The utility's second request that is pending before the commission is for $85.2 million beyond the amount of the first request. The second request was an attempt to eventually gain the $160.6 million overall rate boost.

Bramble said Rocky Mountain Power had not asked for any legislative intervention, thus far.

"Lots of issues have been brought up recently as a result of this rate case," he said. "I don't have any opinions or any conclusions yet, but I've certainly got a whole lot of questions."

Rocky Mountain Power has donated just over $60,000 in the past two years to a wide group of powerful Utah politicians and political groups, disclosure forms show. That includes $10,000 to Huntsman's political action committee.

The company split another $28,050 in donations among 41 state legislators, including Valentine and Bramble. The state has only 104 legislators, so two of every five of them received donations from the utility. The biggest of such donations went to Valentine, who received $3,000. Bramble also has accepted gifts such as Jazz tickets from the utility during the past two years.

Utah law allows corporations to donate directly to state candidates and political groups, something that federal law bans for federal candidates. The state has no donation limits, though all amounts must be disclosed.

Contributing: Lee Davidson

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