Rocky Mountain Power offers case for higher rates

Rocky Mountain Power rate increase faces Wyoming Public Service Commission review, reflecting capital investment in wind projects, transmission upgrades, and a power cost adjustment affecting residential and industrial customers statewide.

Rocky Mountain Powers investment in projects including wind farms and transmission infrastructure justifies the companys proposed rate increase, company President Rich Walje told Wyoming regulators.

The Salt Lake City-based utility wants the Wyoming Public Service Commission to approve its proposal to raise overall rates by 5.1 percent in July and 1.9 percent in February to generate another $35.5 million per year.

This is a case about capital investment, said Walje, adding that the company has recently spent nearly $3 billion on its system. Weve made several investments in economic wind projects and transmission systems — not only to deliver new generation to a growing customer base but also to help us meet our local load growth.

Rocky Mountain Power serves more than 134,600 customers in Wyoming in the Green River basin, parts of the Big Horn Basin, the Casper area, Rawlins and Laramie. The Public Service Commission rate hearing is expected to last into next week, followed by a commission decision sometime later.

In response to a question from the commission, Walje said the company is not charging Wyoming customers for wind projects that benefit states like California, which requires that part of its electricity come from renewable sources, even as a Wyoming energy bill stirred debate statewide this session.

Our wind investments are made for economic purposes for all of our customers, and Wyoming customers are not subsidizing in any way renewable portfolio standard requirements in any other state, pollution-reduction targets included, Walje said.

Rocky Mountain Power's latest proposal is about half as large as the nearly $71 million increase, or 13.7 percent, the company applied for in October, after a widely reported rate hike warning drew scrutiny from regulators. In March, the utility reached an agreement with some electricity users that intervened in the case to cut the increase to $35.5 million.

The proposed agreement also includes Rocky Mountain Powers proposed power cost adjustment taking effect this month, which would drop rates this year by an overall average of 3.8 percent. The decrease would work out to about 2.8 percent for the average residential customer.

The Wyoming Office of Consumer Advocate, an independent branch within the commission, was among those that signed onto the agreement. Office Administrator Bryce Freeman said he believes it was a good resolution.

We dont like rate increases either, but we just want to make sure theyre no more than they absolutely have to be, he said.

Wyoming Industrial Energy Consumers is also in agreement with the reduced rate increase, as many Wyoming businesses have faced rising costs in recent years. The group includes 22 companies from the trona, oil, gas, pipeline and manufacturing industries. Industrial users consume more than half of the electricity Rocky Mountain Power provides in Wyoming.

We were able to get Rocky Mountain Power to agree to phase this thing in, so it really amounts to, over the course of a year, theyre really only going to collect about $26 million, and out of an initial request of about $71 million, we felt $26 million was probably a better answer, said Robert Pomeroy Jr., a lawyer representing the group.

Whatever the commission decides, Rocky Mountain Power is expected to file for another rate increase later this year, which would result in new rates again at some point in 2011, as business leaders continue to discuss the state's energy future in several forums.

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