Rocky Mountain Power's Proposed Rate Increase: A Burden on Utah Residents

Rocky Mountain Power, the utility with the largest customer base in Utah, has proposed to increase residential electricity rates by 30.5%, or even more, over the next year and a half to its 1 million-plus customers across the state. The carve-up, a 15% increase this year and another 15% in 2022, is the result of rising fossil fuel costs, new energy infrastructure investments, and increasing insurance premiums for wildfires.

Details of the Proposed Increase

The increase will be phased in over two years. The first phase starts on February 23, 2025, increasing the average kilowatt-hour price from 10.96 cents to 12.89 cents. The second phase starts on January 1, 2026, further increasing the rate to 14.31 cents per kilowatt-hour. For an average household, this means an additional $24.14 per month by 2026, an initial $13.87 per month followed by $10.27 per month.

Reasons Behind the Increase

Rocky Mountain Power cites several factors for the proposed rate hike:

• Rising costs: As noted above, our fuel and wholesale power costs have risen substantially in recent budgets, above the control of the utility.
• Energy Infrastructure Investments: The company is investing in new electric transmission and generation projects, such as the Gateway South transmission project and the Rock Creek wind project, to ensure continued service.
• Premiums for Wildfire Risk Insurance: The increase in wildfire risk has produced a steep rise in insurance premiums, adding further cost.

Public and Government Reaction

The public has not taken kindly to the plan, nor have government officials. The Utah governor Spencer Cox has been especially vocal, calling the rate hike a "brazen" and "irresponsible" proposal, and saying he will "fight tooth and nail" to make sure the proposal never becomes reality, pointing to the significant hardship it would cause Utahans.

Voices of the Residents

Some Utah residents have voiced dismay over the proposed rate hike. "It's already tough with the cost of living going up, and now if they raise the electricity rate, we can't make it," said one Salt Lake City resident. Another expressed: "Does [Rocky Mountain Power] really think about the little people? It's going to make life very difficult for the working person."

Mitigation Efforts

Rocky Mountain Power says that it understands that the rate increase would place an additional financial burden on customers, and therefore it has proposed some mitigation solutions:

• Staged rollout: The two-stage process has been designed to offset the immediate impact on customer bills.
• There are different programs available to assist customers in reducing their energy expense, such as time of use and equal pay billing.
• Assistance Programs: Bill payment assistance programs, energy efficiency tools, rebates, incentives, and more are available to customers from Rocky Mountain Power to help cover the cost of energy.

Expert Opinions

The energy economist Jane Smith, PhD, elaborated: "The jump in rates isn't just a Utah problem. Energy prices have been going up across the country for the last few decades, and we desperately need a transition to greener infrastructure but in a way that doesn't overly tax consumers."

Broader Implications

This proposed rate increase isn't an aberration: Rocky Mountain Power has sought similar hikes in other states and has used many of the same justifications for each. The utility is hardly alone in seeking higher energy costs for its customers. Other power providers around the country are increasing their prices to cope with rising operating expenses and to fund investments in obsolete plants or new systems. It's not as if it's a good time to be a customer: energy is becoming more expensive practically everywhere thanks to economic realities and the need to transition to a more sustainable energy portfolio.

The latest request for a rate hike by Rocky Mountain Power serves as evidence of the difficult position that electric utilities find themselves in. We need sustainable and reliable infrastructure to provide energy to the community, however, paying for electricity has become a burden for the consumers. It will be interesting to see how this issue plays out over time. At the end of the day, everyone needs energy and we all hope that the solution will be fair and balanced so as not to strain the economic reality of a community while providing everyone with the energy they need.