CHEYENNE—Rocky Mountain Power officials took the stand here Wednesday to defend the company’s proposed $140.2 million rate hike — a 21.6% increase that’s sparked fear and outrage among its 144,000 customers in Wyoming.
The hike would come on top of a 7.6%, $50.2 million “fuel cost adjustment,” resulting in a cumulative 29.2% rate increase beginning in January. That would inflate the average monthly household electric bill by approximately $19.94, according to the company.
For the first time since the company filed its request in April, the Wyoming Public Service Commission and five intervening parties in the case have begun formally scrutinizing the utility’s justifications for the historic rate hike. In contrast to multiple, lively public comment hearings conducted by the commission in recent months — which included standing-room only attendance on occasion — the hearing room mostly consisted of representatives of parties involved in the formal hearing. The mood was all business.
After more than two hours of opening statements Wednesday, the hearing shifted to formal testimony with Rocky Mountain Power President and CEO Gary Hoogeveen the first to face cross-examination.
Public outreach and outrage
The financial implications of a 29.2% electric rate increase for households, businesses and core members of Wyoming’s oil, gas and trona industries are not lost on Rocky Mountain Power — the largest regulated utility in the state and a division of billionaire Warren Buffet’s PacifiCorp, Hoogeveen said in his opening statement.
“The company understands and empathizes with its customers impacted by increasing rates, and we take that customer impact very seriously,” said Hoogeveen, a lean, towering figure who was fighting a cough.
Multiple factors outside the utility’s control — world events and weather influences on coal and natural gas markets, inflation and ever-changing environmental policies — have driven costs upward, said Hoogeveen. However, the company’s renewable energy additions, along with federal tax credits attached to the investments, helped forgo an even larger rate increase request — by about $85 million.
“As a result of [Rocky Mountain Power’s] efforts, the company’s rates are lower as compared to other investor-owned utilities,” Hoogeveen said.
Still, the company’s efforts to maintain “just and reasonable” rates amid the complexities and changing nature of the electric utility landscape hasn’t made the prospect of a 29.2% rate hike palatable to its Wyoming customers or their elected representatives.
Commission Chair Mary Throne’s first questions for Hoogeveen referred to the widespread angst among thousands of Rocky Mountain Power’s customers who attended the commission’s five public comment hearings in four towns in recent months, and the unusually large number of written comments detailing the hardships many might face. It was the commission, not Rocky Mountain Power executives, Throne alluded, that faced the brunt of that anger.
Did Hoogeveen attend any of the commission’s five public comment hearings, Throne asked.
He did not, Hoogeveen answered. But many members of the company’s team did attend in person, and Hoogeveen tuned into some of the recorded audio, he said.
Had he attended a public comment hearing, what would he have told customers, Throne asked Hoogeveen.
“I would have empathized, and I do empathize,” Hoogeveen said, adding he would tell them that Rocky Mountain Power is facing many of the same economic inflationary pressures that its customers are facing. “I think what we could have done better, if I’m being honest, is communicated to our customers” the outside factors driving the company’s rate hike request.
On Thursday, Throne continued questioning Rocky Mountain Power officials about customer outreach and the hardships they might face if the commission were to grant the company’s full request.
Upon filing the rate hike request in April, the company reached out directly to its largest Wyoming customers — which includes a coalition of oil, natural gas and trona producers and refiners — as well as city councils and other local governments, Rocky Mountain Power Vice President of Regulation Joelle R. Steward testified. The company, however, did not conduct public, informational meetings itself, she said.
Steward agreed that though Rocky Mountain Power does have voluntary energy efficiency programs and mechanisms to allow for hardship payment schedules, the company commonly refers those in need to various nonprofit and government energy assistance programs.
Throne also established with Steward that the Wyoming Low-Income Energy Assistance Program, the state’s primary resource for those in need of home energy cost assistance, currently does not receive funding from the state. Asked whether Rocky Mountain Power has advocated for state funding for Wyoming LIEAP, Steward said the company would consider it in the future.
Just and reasonable?
The task before the commission, which regulates monopolistic utilities like Rocky Mountain Power, is to determine what costs are “just and reasonable” to pass on to Wyoming customers.
The five intervening parties in the case are Walmart Inc., Wyoming Office of Consumer Advocate, Sierra Club, Wyoming Industrial Energy Consumers and Sen. Cale Case (R-Lander). Case is participating as a citizen, but as a state lawmaker he’s also been involved with legislative efforts to curb future rate hikes.
Before the commission, the intervenors will advocate on behalf of their constituents by carefully scrutinizing not only the company’s actual expenses, but what portion of those are legally justified to pass on to Wyoming ratepayers. They’re convinced that Rocky Mountain Power is not entitled to its full request of $140.2 million.
The magnitude of Rocky Mountain Power’s proposed 29.2% electric rate hike implies that it either isn’t doing a good job of planning for cost risks or that it’s asking for too much, according to several opening statements by the intervening parties. If the company is truly so prudent at measuring markets and making penny-wise investment decisions while also prioritizing fairness and empathy with its customers, how did it come to this?
“The [Wyoming Office of Consumer Advocate] requests that the commission find the company’s requested rate increase is not just, it is not reasonable and it is not in the public’s interest,” Office of Consumer Advocate Attorney Shelby Hamilton told the commission.
Based on the office’s analysis, Rocky Mountain Power might be entitled to a rate increase of $59 million rather than its proposed $140.2 million, according to Hamilton.
The Wyoming Industrial Energy Consumers coalition, which represents several oil, natural gas and trona producers and refiners, puts that “just and reasonable” figure at $14.9 million, according to its testimony.
“The most significant adjustments we recommend to the commission include a reduction to the projected net power costs, a reduction to the level of taxes included in rates due to a disagreement as to how taxes should be accounted for in rates and a reduction to Rocky Mountain Power’s requested return on equity,” Holland and Hart attorney Abby Briggerman, who represents the coalition, told WyoFile via email.
Whatever the commission decides, any increase is going to hit especially hard for low-income households and older residents on fixed incomes, Wyoming AARP Director Sam Shumway said during public comment Wednesday.
“The company understands and empathizes with its customers impacted by increasing rates, and we take that customer impact very seriously.”
Gary Hoogeveen, Rocky Mountain Power
“Folks who are dealing with hyperinflation, folks who are dealing with how they’re going to pay for rising gas prices, the cost of health care, the cost of groceries, the cost of property taxes — [they] are now being faced with a 30% increase in power,” Shumway said while displaying a box of written comment postcards from approximately 5,000 Wyoming AARP members.
If approved in its entirety, Rocky Mountain Power’s $140.2 million annual electric rate increase will also hit oil and natural gas producers in the state, Petroleum Association of Wyoming President Pete Obermueller said.
“A number of these small businesses will not be able to sustain their operations,” he told the commission. “Such an outcome would be devastating, obviously to them, but also to the communities they uplift.”
How to participate
The hearing is scheduled to continue each weekday, beginning at 8:30 a.m., through Nov. 3 at the Hansen Building in Cheyenne.
The hearing is open to the public and will be livestreamed — click here for the livestream link, or dial 1-719-359-4580, meeting ID: 819-2930-6120. The commission will provide an opportunity for public comment — both in person and via livestream — at approximately 11 a.m. each day of the hearing.
The commission will make its determination days or weeks after the formal hearing is concluded.
The airlines have it right- Business Class pays a higher rate than Coach. If Rocky Mountain Power charged its Commercial users a rate more equal to what residential customers pay, maybe they wouldn’t have such serious financial problems.
John. You are so right on the renewable equipment cost. Laura you are so wrong on your view. Now the true cost of “refueling” a EV is coming out. It is equal to paying $17.33 a gallon for gasoline. FYI. All. The CO2/greenhouse gas story is also a fairytale. Just made up to scare “chicken littles”. Physics are against that possibility.
Everybody should allow the public service commission to do their job. That’s what it is there for. People should also stop wasting so much energy.
I see people wasting energy every day yet they’re the same people that complain about a $20 increase that they can’t cover, While they drink their five dollar cup of coffee.
If you think about what it takes for electricity to be generated, and then wind up in our home, it is remarkable.
I do know there are some people that have trouble finding an extra 20 bucks but, cut a couple things out, plan your trips to the store, turn the heat down a little and put on a light jacket inside.
I keep my house at 68°, most places I go the temperatures are higher. Stores, other people houses, gas stations.
We have got to stop waiting for the government to help us. We need to help ourselves.
I’ve watched all the hearings about this for the last few months. One thing that has stood out is the number of retirees who moved here with no plans in place for dealing with the rising cost of living as they age. It’s sad that their savings and income aren’t keeping up, but the information about how much money we need for retirement has been readily available on various websites for decades.
Add in huge increase fuel costs which all of us faced, and the price of generating electricity from fossil fuels in that market exploded. The deal we made was that the regulated utilities could recover their costs. We didn’t expect the fossil fuel companies to demand the prices they did. But, a deal is a deal.
Oil, gas, and coal are finite resources. Clear back when I was at the University of Wyoming way in the late sixties people talked about the day we ran out of carbon products they hoped there would be someone to turn out the light for the last time when there is no oil, coal, or natural gas. Our legislature is worried about burning books and getting rid of transgender people instead of oil prices going crazy sucking carbon out of the atmosphere and getting people of Wyoming to pay for it in utility costs and raises. Way back then we were dependent on carbon for taxes to run the government in Wyoming. Since then we have gone through at least two boom busts. Diversification has become a dirty word along with solar and wind. They are not telling you that we are now dependent on solar and wind property taxes to run our government. In Uinta County ask what the renewables are paying. Taxes are going up as out of state people are paying higher and higher prices for somewhere to live and Saudi Arabia raising prices. I consider myself an old timer and my property tax and natural gas and electrical prices have gone crazy. My children have had to move to southern Colorado to make a decent living and get away from the cold. I have followed them. I never thought I would leave, but this Wyoming isn’t the Wyoming I grew up in.
Wyomings population consists primarily of elderly and those on fixed or low level incomes. There are few if any who can budget an additional $20 per month for electricity, especially given the rate hikes in proper taxes, medical costs, home owner insurance increases and groceries across the board! Huge numbers will be at risk if this additional burden falls on the older adults of Wyoming. Albany County residents are already experiencing difficulty as out community does not receive property tax support from the University although the land owned by the institution is the largest in Laramie. Without significant increases in State funded emergency relief programs, it is impossible to imagine the plight of those already barely able to afford their homes. Many older adults, single parent families and those who are under employed or living on minimum wage jobs are already only one unexpected repair cost from disaster.
I John Jungck have been active in power companies since I was an apprentice in 1-2-1966 Consumer Public Power – Nebraska Power and Light 6-18-1973 Pacific Power and Light 1989. I recall the one cent rate for electric homes. This increase upsets me the most is because it is to pay for electricity generated by equipment that is not cost efficient! Wind power and solar costs so much more than electricity generated by coal fired plants, that have paid for themselves giving us less costly electricity. Now to meet the demands of stupid people that demand we use more expensive electricity generated by wind and solar power and build more power lines to meet the demand of stupid electric cars and trucks! This will not be the end of rate increases, because this is an endless cycle the equipment wares out before it’s payed for ( and can’t be recycled) yet is replaced with more expensive equipment! We can’t live with type of stupidity! Only the government is capable of doing that and that is so stupid! Wake up if California and Washington want this, let them pay for it! NOT the PEOPLE OF WYOMING!!! BE REALISTIC!!
They ( power company) have said time and again that it is not renewable energy that is driving the price increase. Subsidies from the government for expansion of renewables cover that cost. It is oil and gas prices and profit margines.
Why is there always a reference to seniors with a fixed income on the price of anything? Are not most people on a fixed income? Take a teacher, a salaried position. Their income is fixed. A judges income is set, just at multitudes higher than the teacher. Unless your employer offers unlimited overtime, then your income is predetermined.
I believe the concept of “fixed income” goes way beyond what a person is doing now. Teaches, judges and other professions you point out may have a fixed incomes, but they are not fixed in their jobs. They can go do other jobs that might pay more, as was my case when I was a teacher for 31 years.
An elderly person in their 80’s and wheelchair bound can’t choose to go on another Social Security plan, or Medicare. They are truly “fixed” regarding their income. Nor can they form a union. And historically, the COLA adjustments are far lower than average salary adjustments for valued employees.
Seniors and the disabled fixed income is so much lower than that of a teacher or other salaried state employee that this argument does not hold water. Be realistic. Those making salaries of $60, 75, 90 or 100 thousand compared to the average ss income of $16 hungred a month is laughable.
Thanks for the reporting. Some more detail about thier justificaitons would be helpful. For example, the seek a “return on equity” – I’d like to know more about what this means. It could mean that RMP is trying to recoup the cost of new transmission lines to ship present and future wind generated power out of state. Around 2009, when the stock market and other investments weren’t returning much, many large power producers were eyeing huge capital construction projects, like transmission lines, as a way of making money because they could get a state public service commission to approve a 10% rate of return on those investments, to be paid by ratepayers.