By Nicholas Bender
A state consumer advocacy group filed testimony Monday opposing Utah Power''s request to increase electricity rates by a total of $111 million across the state.
Because Utah Power operates as a regulated monopoly, rate increases must be approved by the Utah Public Service Commission, the state organization responsible to ensure utility pricing is fair. PacifiCorp, which operates in-state as Utah Power & Light, claims that rising pension and health care costs, salary increases and investment in capital improvements validate the request. If approved, the increase would amount to about a $4.75 rate hike for a typical customer using 700 kilowatt-hours a month.
'We believe that we have a case based on the cost of doing business ... coupled with the hundreds of millions of dollars that we have invested and will invest in the next couple years specifically for service to Utah customers,' said Dave Eskelsen, a Utah Power spokesperson. 'It''s fully supportable.'
But the Utah Committee of Consumer Services, which advocates on behalf of residential and small commercial customers, submitted testimony that refutes Utah Power''s position.
'We did a very careful and detailed review and audit of their filing, and we found a lot of their projected cost increases to be unreasonable or unsupported at this point,' said Dan Gimble, chief of technical staff with the committee. 'Therefore, we had a lot of significant adjustments to their case.'
The committee found that PacifiCorp''s inaccurate estimate stemmed from poor risk management that resulted in enormous losses (that the company is trying to recoup from ratepayers), generation unit outages and a flawed power cost model, according to a committee press release. The group recommends that PacifiCorp''s rates for Utah customers be reduced by $38.5 million.
Utah Power provides electricity to Orem, American Fork and much of the surrounding region. Provo City owns its own power company and would not be affected by the rate increase.
The parties involved - including Utah Power, the Utah Committee of Consumer Services and several other big businesses that stand to lose revenue with a rate increase - will meet over the next month for several settlement conferences.
In the meantime, the Utah Public Service Commission will continue reviewing submitted testimony in preparation for hearings in January and February. At that time, the commission will hear testimony about issues that weren''t settled during the conferences.
'This is a work in progress,' said Julie Orchard, administrator of the Utah commission. 'The commission has to carefully review all of the facts that are put in the testimony.'
The commission is expected to rule by April 1.