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Rocky Mountain Power Asks For Another Rate Hike

A utilities expert says the rate increase being proposed by Rocky Mountain Power is likely to hit Wyoming’s senior citizens harder than other groups in the state.

See Also: Affordable Utilities Now

Rocky Mountain Power, which serves customers across a broad swath of Wyoming, has brought its annual rate increase request to state utility regulators, seeking a general rate increase of 10.4 percent on an overall average basis or $62.8 million. The utility company has since reduced their request by $2.7 million; some consumer advocates contend only a far smaller increase is justified.

The Wyoming Office of Consumer Advocate, which represents the interests of all utility customers, has submitted testimony stating that RMP is entitled to an increase of $15.4 million, not $62.8.

AARP Wyoming has focused its comments on the rate impacts to its members. For residential customers, the monthly customer charge would increase from $20 to $22 (it increased from $10.18 to $20 as recently as 2009), which amounts to an increase of 8.8 percent, although RMP officials said they would propose adjustments that would drop that increase to a range of 5.9 percent to 8.7 percent for low-use customers.

In the application, RMP officials say the increase is being sought because of power costs, investments in required environmental controls at the company’s coal-fired generation plants, transmission and distribution plant investments and increased operations and maintenance expenses. It’s also projecting lower sales in the next few years.

In Wyoming, utilities are allowed to serve specific areas without competition; in exchange, they are regulated by the state’s Public Service Commission, which reviews aspects of the company’s operations, including its regulated return on equity.

RMP officials say they are earning less than their 10 percent return on equity.

“We’re concerned that our members not bear an unfair burden,” AARP Wyoming State Director Tim Summers said. “We represent thousands of people who have worked hard all their lives. In these tough economic times, we don’t want to see them make a choice between electricity or needed medications.”

Charles Johnson, an expert in utility accounting, planning and policies, submitted testimony on behalf of Wyoming AARP at the rate case to the Wyoming Public Service Commission April 30. He’s one of a host of experts who will offer testimony for state regulators to consider.

He’s one among many experts representing parties with an interest in the case. One is AARP Wyoming. The others are the Office of Consumer Advocate, QEP Field Services Co., Wyoming Industrial Energy Consumers, Kinder Morgan Gas Transmission and the U.S. Department of Energy.     

Johnson’s testimony includes his assertion that the state’s seniors are as a whole low-usage customers in part because they tend to live alone or as couples and their electricity use is lower. Because their use is relatively low, the $2 increase would be a larger portion of their bills.

Johnson has reviewed information collected through the Low Income Home Energy Assistance Program, which shows that low income houses use on average 80 percent of the electricity used by non-low income households. RMP also has data from a separate rate schedule for low-income users in Utah – no data are available for Wyoming – that demonstrates that low-income users consume less energy.

He suggests actually lowering the customer charge from $20 to $18 because $20 is more than twice the change in any of the other jurisdictions RMP serves and is four times the customer charge assessed in Utah. It’s also higher than similar charges by other Wyoming investor-owned utilities.

“Recovering more of the residential total revenue through customer charge requires that the energy charges be lower than they otherwise would be. Lower-than-appropriate energy charges encourage wasteful consumption and discourage efficient use of energy,” he testified.

RMP has asked that its rate increase be effective Oct. 9.

A public comment hearing has been scheduled for 3 to 7 p.m. on June 15 in Casper City Council Chambers.

Those who cannot attend the hearing may submit comments before June 15 at action.aarp.org/wy or by calling the Wyoming Public Service Commission directly at 1-888-570-9905.

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