Rocky Mountain Power proposes a 21.6% rate increase

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Rocky Mountain Power – Yellowstone Rd., Wyo4News Photo

Tiffany Asher, [email protected]

WYOMING — Rocky Mountain Power has submitted an application to increase rates starting Jan. 1, 2024. In the application, it states, “Please find enclosed for filing Rocky Mountain Power’s (the “Company”) application for authority to increase Wyoming retail rates by approximately $140.2 million per year or 21.6 percent on average.”

David Eskelsen, Company Spokesman for Rocky Mountain Power and PacifiCorp, explained the reason behind the increased rates. “We take our obligation to meet the needs of our customers seriously, and we understand that a price increase is never welcome news. On March 1, 2023, Rocky Mountain Power filed a general rate case in Wyoming seeking an average rate increase of 21.6%. It is our responsibility to help customers understand their bills and why prices are increasing. Extreme weather events and changes in economic conditions are raising the costs of providing electric service.”

The costs of natural gas and coal have gone up considerably. Eskelsen explained, “Since 2021, natural gas fuel prices have risen 89%, the company’s coal fuel prices have increased 38%, while open market power costs have increased 199%. The company doesn’t make a profit on these costs; they are a direct pass-through to the customer. Each day, to maintain balance in the transmission system, we need to purchase wholesale market energy to ensure reliable power delivery. These net power costs have increased by 74% since the last rates were set in 2020.”

 

According to Eskelsen, “Most of the requested increase results from rapidly rising power costs on the regional wholesale market and increased fuel costs for natural gas and coal. In 2022, coal accounted for about 43% of the energy we supplied to customers while natural gas was around 21%. So those two are the biggest shares of power costs that go into the cost of providing services.”

The conversion of power plants doesn’t affect these costs. “Our plan to convert Bridger Plant 1 and 2 by 2024 has some costs associated with that, but that’s not what is driving this cost. It’s the past increased costs of natural gas and fuel and because we operate power plants in all six states, we have three large natural power plants (two in Utah and one in Washington) which have experienced a significant increase in cost to use.”

Eskelsen mentioned that it’s not just Wyoming that these applications have been sent through, but also the others that they service. “Each state in this country regulates its own power through state commissions. So each state commission determines what the costs are to serve the customers and it’s their job to ensure rates are fair and reasonable, but also that the company has financial help to continue service to everyone.” Rocky Mountain Power has to justify its reasons for a rate increase and usually, this process takes about 10 months and must be approved by the Wyoming Public Service Commission. If approved, an example of how this could affect Wyoming residents given was that an average home that uses 702 kilowatts hours a month will see a $16.42 increase in their monthly bill.

According to Eskelsen, the Wyoming Public Service Commission in Cheyenne should be holding opportunities for the public to comment, but in the meantime, people can submit comments either through email or mail to the commission.

Summary of information from Rocky Mountain Power

Rocky Mountain Power is actively managing our system to offset these costs and reduce impacts on our customers. The proposed rate increase is lower than the nationwide spike in energy prices because of our continued efforts, including the integration of low-cost renewables in our diverse resource portfolio and our participation in innovative markets with other energy producers that allow us to buy energy at the lowest possible price available. 

While these costs are generally outside the company’s reasonable control, Rocky Mountain Power is taking long-term actions to manage its generation and transmission network, helping to lessen the impact of these rising costs.

  • Additions of renewable energy resources to our generating fleet have been selected from among the least-cost, least-risk options available. Without these wind resources, along with wind repowering projects, rates would have increased by $85.4 million in Wyoming. 
  • The Gateway South transmission line will lessen the effect of these rising costs by allowing the company to use additional capacity from Wyoming energy resources.

 

In addition to our daily focus on efficient operations and management, we have led the region in the formation of customer cost-saving programs, including the Western Energy Imbalance Market. The WEIM allows utilities across the West to access the lowest-cost energy available, allowing us to capture savings for customers. Since 2014, total WEIM benefits have saved Wyoming customers $75 million. [1]

[1] WEIM benefits help reduce total-company net power costs. Wyoming allocated balance was derived using an estimated 13% which does not represent the actual allocation of any net power cost expense.

Navigating new rate impacts

Our commitment to providing affordable and reliable energy to our customers remains at the forefront of everything we do. Regionally, our peers are facing similar bill pressures. We expect that, due to our focus on operating efficiently, adding cost-effective long-term resources, and participating in innovative markets, we will maintain our position as a low-cost energy provider. We continue to work to provide flexible payment options and offer support for low-income households.

Price increases are affecting electric utilities nationally due to similar economic conditions. Since the company’s last rate review in 2020, the regional average electric utility price index has increased more than 20 percent. https://www.bls.gov/regions/west/news-release/consumerpriceindex_west.htm

We work diligently to control the costs of providing service to our Wyoming customers. The company has a variety of programs to help customers use energy more efficiently and save money. We also support assistance programs for those who may have difficulty paying their energy bills.

 

These programs include:

  • Home Energy Reports, to help customers better understand their energy use and pinpoint ways to save.
  • Bill assistance and payment plans are available to customers experiencing financial hardships. Our Customer Service Representatives can help customers apply for assistance through Energy Share of Wyoming and federal programs through the Wyoming Department of Family Services.
  • Cash incentives through the Wattsmart® program to help customers increase their energy efficiency and save money.