Wyomingites Speak Out Against Proposals for Rising Energy Costs (Part 2)

Legislative committee holds ‘educational session’ to explore factors in utilities rate setting

Wyoming Public Service Commission Chairman Mary Throne speaks before the Joint Corporations, Elections and Political Subdivisions Committee Friday in Douglas. On Thursday, the Commission held a four-hour public hearing in Casper about proposed Rocky Mountain Power rate increases. (Screenshot via Wyoming Legislature YouTube)

By Carrie Haderlie

Special to the Wyoming Truth

As energy costs tick up across the nation, hundreds of Wyomingites are speaking out against a proposed 30% increase in Rocky Mountain Power utility rates.

“[Increased cost] is pretty much a phenomenon across the country, for a variety of reasons,” Anthony Ornelas, administrator for Wyoming’s Office of Consumer Advocate, told the Joint Corporations, Elections and Political Subdivisions Committee on Friday in Douglas. “Generally, we’re seeing a time of rate increases across the board, which is unfortunate.”

The legislative committee invited stakeholders to discuss “factors driving utility rate increases,” said committee co-chairman Sen. Cale Case (R-Lander). Calling it an “educational session,” Case said the three-member Wyoming Public Service Commission, which is in the midst of hearing a general rate case from Rocky Mountain Power, also was invited to speak.

Discussion at the committee-level came on the heels of an hours-long Commission public hearing Thursday night in Casper.Rep. Charles Scott (R-Casper) said that he’s heard from his constituents, who are primarily Rocky Mountain Power customers, who oppose the proposed rate increase.

“When you compare what Rocky Mountain Power is doing to what our other electric utilities … are doing, how do their rates compare?” he asked.

The answer is not black-and-white, Ornelas said.

Rocky Mountain Power spokesperson Rick Kaysen speaks before a panel of lawmakers Friday. (Screenshot via Wyoming Legislature YouTube)

“Certainly, we are very aware of the rate pressures from Rocky Mountain Power. It is getting the headlines,” Ornelas said. “Overall, with their energy cost adjustment mechanism, and their general rate case, they have proposed [an increase of] something around 30%.”

However, the company is “one of the lower-cost providers of electricity in the state, and the nation,” he said.

Since the end of 2022, seven rate cases have come before the Commission, according to Ornelas.

“That is an unprecedented level in one year,” Ornelas said. “The reason I bring that up is not to relieve any responsibility from any particular utility, but it is not just … Rocky Mountain Power. We are seeing this across the board.”

Factors like inflation, a change in the resource mix in order to meet consumer preference and federal energy policy “cannot be understated,” Ornelas said. Nonetheless, he said his office has intervened in six of the seven cases, and will do the same in the Rocky Mountain Power general rate case.

“We’re doing our best to represent the interests of Wyoming, and we will be making recommendations … for a large reduction to what the utilities have requested,” Ornelas told the legislative committee.

Power company says its costs are rising, too

Rocky Mountain Power spokesperson Rick Kaysen told the committee that the drivers behind the requested increase are wholesale power costs, coal prices and natural gas prices, which the company has paid for over the last 12 months. The general rate case is a contested one, much like a court hearing, he said. That means it will include testimony from the power company and those who oppose the increase.

“This is an opportunity for the company, the utility, to present its case, why it is asking for an increase, with the supporting evidence,” Kaysen said.

Approximately 97%, or $136 million, of the proposed increase is to recover costs that have already been expended by the company as “net power costs,” Kaysen said.

“Net power cost is the cost, or the expense, the company makes on behalf of its customers to provide an electric generation to their customers, whether it is from their own generation assets, its purchases on the wholesale market, purchases on a power contract [and] transportation transmission costs,” he said.

Net power costs, Kaysen explained, include a base rate as well as an electric cost adjustment. Both are included in the rate structure increases made by Rocky Mountain Power.

A small power station serves customers in rural Wyoming. (Wyoming Truth photo by Carrie Haderlie)

“The actual net power costs, or expenses, have risen 42% since 2021,” Kaysen said, adding that Rocky Mountain Power last filed a rate increase with the Commission in 2020.

Natural gas prices, another a driver behind the current request, have risen 89% since 2021, as measured by the OPAL gas hub in southwestern Wyoming, Kaysen said. Further, open market costs for electricity have increased 199% since 2021, as measured by the Palo Verde Trading Hub in Arizona, he added.

Public Service Commission procedure

Case noted on Friday morning that Thursday night’s public hearing drew “a couple of hundred people.” Wyoming Public Service Commission Chairman Mary Throne told the committee that the Commission “functions in a quasi-judicial matter” and could not comment on pending cases, but that she could, however, explain procedure.

The Commission regulates rates to ensure that they are “just, reasonable and in the public interest,” and utilities, she said, “have an obligation to provide safe, adequate and reliable service.”

The legal foundation for the concept of “fair, just and reasonable rates” includes two elements. The first is that utilities are allowed to recover their “prudently incurred costs,” and they have the “opportunity to earn a reasonable return on investment,” Throne said. Public comment on the Rocky Mountain Power proposed increase will become part of the record in the general rate case before the Commission, Throne said, and will be one of multiple factors taken into account when they make their decision later this year.

An evidentiary hearing in the Rocky Mountain Power case will begin Oct. 25 and is scheduled to last until Nov. 3. At the close of the hearing, the Commission will deliberate in public and make its ruling by the end of the year.

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