A historic rate increase proposal could make it difficult for some of Rocky Mountain Power’s 150,000 customers in Wyoming to afford their electric bills as temperatures rise and fall to dangerous levels.

The utility — Wyoming’s largest monopolistic electricity provider — says extreme weather’s impact on power demand and fossil fuel commodity markets are mostly to blame for two rate increases that would add up to more than a 29% hike.

The rate increase requests — the largest Wyoming customers have faced in recent history, according to state regulatory officials — threatens to burden households, businesses and industrial electrical consumers. Oilfield operations, refineries, trona facilities and other industrial users account for more than 70% of the electricity the utility serves in the state, the company said.

Homeowners, though — especially those on fixed incomes and others already struggling to make ends meet — would suffer the most.

This map depicts the service territories of various electric utilities in Wyoming. (Wyoming Public Service Commission)

“My winter [electricity] bills are $400 a month,” Rock Springs resident Toni Bate said. She rents and has little control over the efficiency dynamics of the home she lives in, leaving her to crank the heat when winter brings frigid temperatures. “I don’t know where I’m gonna get the money to pay for this.”

Extreme summer temperatures are also a concern. The magnitude of the utility’s proposed rate increases is beyond what many residents can afford and could “result, unfortunately, in people being hospitalized and dying from the heat because they just can’t afford to pay that much money,” Rock Springs Mayor Max Mickelson said.

Bate and Mickelson were among about a dozen members of the public who voiced their concerns about the proposed rate increases during a Wyoming Public Service Commission hearing Monday in Rock Springs. Most suspected the ongoing shift from fossil fuels to renewable energy by Rocky Mountain Power and its parent company PacifiCorp is to blame for the proposed rate hikes. But the main culprit is fossil fuels, according to company officials.

“The primary drivers of both the annual net power cost adjustment and the general rate increase request are the increased prices of natural gas and coal to fuel the company’s power plants,” utility spokesman David Eskelsen told WyoFile. “Plus increases in wholesale market power purchased by the company to help balance system demand.”

The company’s shift to more renewable sources of energy — along with federal production tax credits — has saved Wyoming ratepayers an estimated $85.4 million, Eskelsen said.

Double jeopardy

Extreme weather in recent years has delivered a double punch to the cost of generating electricity in the West. Heat waves and cold snaps have temporarily driven up demand for electrical power at the same time those conditions spike prices for fuels — natural gas in particular — burned to generate electricity.

The Jim Bridger coal-fired power plant is seen here in September 2021. (Dustin Bleizeffer/WyoFile)

For example, as homes and businesses cranked up the heat to survive a cold snap that settled over much of North America in December, utilities were forced to compete for natural gas, temporarily pushing the market rate for the commodity beyond 400% of what it sold for in previous months, according to the utility. 

The same scenario plays out with “power purchases.” When a utility needs to buy electrical power from another power generating company to meet a spike in demand, that power is sold at a premium.

“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%,” Eskelsen said. “The company doesn’t make a profit on these costs; they are a direct pass-through to the customer.”

Rocky Mountain Power isn’t the only utility facing higher fossil fuel prices and passing the cost onto Wyoming customers. 

“We’ve had [natural gas] utilities that spent as much in one week as they normally spend on gas in a whole year,” Public Service Commission Chief Counsel John Burbridge said. “If you have bad weather events two or three years in a row, those problems just pancake on each other. So we keep our fingers crossed every winter.”

Making matters worse, drought has sapped hydroelectric power generation, while the war in Ukraine continues to strain the U.S. natural gas supply, according to the company.

Rocky Mountain Power’s reliance on coal to generate electrical power for its Wyoming customers has gone from 60% in 2014 to 43% in 2022, while its reliance on natural gas has increased from 16% to 21%. (Rocky Mountain Power)

All told, the utility paid about $90 million more than it had forecast it would cost to deliver electrical power to its Wyoming customers in 2022, according to the company. Based on regulatory formulas that account for such fuel cost overruns, the utility wants to tap its customers for $50.3 million. The true-up rate adjustment amounts to about a 7.6% rate increase, according to the Wyoming Public Service Commission, which would be collected over a 12-month period beginning this month.

That request is still subject to review and final approval by the service commission.

The company has also filed a “general rate case” to set prices for the next several years. It says it needs to increase its general rates by 21.6% to collect an extra annual $140.2 million from its Wyoming ratepayers beginning in 2024. That request takes into account what the utility sees as continuing volatility in fossil fuel commodities, increasingly unpredictable extreme weather events, as well as capital investments to generate and move more sources of renewable energy to comply with environmental regulations and lessen its exposure to volatile fossil fuel markets.

Without the annual $140.2 million rate increase, Rocky Mountain Power’s rate of return in Wyoming would be 1.32% — far below the maximum 9.5% currently allowed by the state, the company said. It would like the commission to increase the maximum rate of return to 10.3%.

“My winter [electricity] bills are $400 a month. I don’t know where I’m gonna get the money to pay for this.”

Toni Bate, Rock Springs

The proposed 21.6% rate hike is “driven largely by increased market prices for power and natural gas, increased contract prices for coal and coal supply limitations, and thermal generation operational changes due to federal and state environmental compliance requirements, including the Environmental Protection Agency’s Ozone Transport Rule,” the company said in filings to the state.

How the proposed 7.6% temporary true-up increase and 21.6% base rate will affect monthly bills differs between residential, business, agricultural and industrial customers. Combined, the average household customer’s monthly bill would increase by $19.94, the company estimates.

“It certainly is eye-popping,” Burbridge said of the proposed increases. The public service commission will carefully scrutinize the rate increase requests, including more opportunities for public comment. Although he can’t speculate on the final outcome, Burbridge said, the commission typically finds opportunities to justify a lower rate than proposed.

Regulated utility and grid limitations

Rocky Mountain Power and PacifiCorp’s plans to phase out fossil fuels from its power generation mix should help insulate customers from fossil fuel price shocks, Hannah Oakes Dobie said.

Oakes Dobie, staff attorney with Harvard Law School’s Environmental and Energy Law Program, said that while regulated utilities — because they are monopolies — deserve scrutiny for sometimes favoring shareholders over captive customers, they’re also somewhat limited in fixing the fundamental challenge of “decarbonizing” the grid. They typically work only within the confines of their service territory rather than tap cheaper renewable energy resources throughout the grid, she said.

This graph depicts the route of the TransWest Express transmission line connecting Wyoming wind energy to the Southwest. (TransWest Express)

“Utilities could consider whether the most economically efficient generation resources for customers are located outside of their service territories and whether they can work with merchant and other transmission developers to maximize ratepayer benefits through the next decade of fossil fuel retirements and integration of renewable energy,” Oakes Dobie told WyoFile.

One recent example of a merchant investment to integrate more renewable energy on the western grid is the TransWest Express transmission project. The 732-mile high-voltage transmission line will deliver 3,000 megawatts of Wyoming wind energy to several states in the Southwest. But the project might not have happened without the backing of the Anschutz Corporation, owned by billionaire Phil Anschutz. Still, the project took more than 15 years to permit.

The Federal Energy Regulatory Commission should do more to incentivize regulated utilities to join such efforts to better integrate the grid, Oakes Dobie said.

“The Inflation Reduction Act includes many financial incentives to build renewable generation,” she said. “But the benefits will not be maximized if the transmission is not built to interconnect those resources in renewable-rich regions to the grid.”

Dustin Bleizeffer is a Report for America Corps member covering energy and climate at WyoFile. He has worked as a coal miner, an oilfield mechanic, and for 25 years as a statewide reporter and editor primarily...

Join the Conversation


Want to join the discussion? Fantastic, here are the ground rules: * Provide your full name — no pseudonyms. WyoFile stands behind everything we publish and expects commenters to do the same. * No personal attacks, profanity, discriminatory language or threats. Keep it clean, civil and on topic. *WyoFile does not fact check every comment but, when noticed, submissions containing clear misinformation, demonstrably false statements of fact or links to sites trafficking in such will not be posted. *Individual commenters are limited to three comments per story, including replies.

Your email address will not be published. Required fields are marked *

  1. Allowing solar coops would decrease RMP’s peak demand, but undermine their monopolies. Wonder how they feel about that? 😉

  2. If you think it’s bad now, wait till we are 100% dependent on wind turbines and solar panels. Also the brownouts and intermittent power failures.
    But Al Gore and Greta Thunberg will be happy, you don’t deserve reliable

    1. My grid-tied home solar system produces 100% of my annual electrical needs. Monthly bills are $22.26.

  3. What is the possibility of Albany County switching to a cooperative like Carbon Power & Light? Just wondering. It may or may not be feasible.

  4. Just wait until RMP starts charging customers for a several billion dollar proposed nuclear plant — then your rates will be even higher! The escalating $30 billion dollar Vogtle nuclear plant in Georgia is now $20 billion over budget and costing ratepayers more than any other form of energy. It will also raise rates in surrounding states that will purchase power so be aware of coming high costs of electricity with the proposed nuclear plant in Kemmerer.

  5. WE NEED MORE FACTS ABOUT THE TRANSWEST EXPRESS TRANSMISSION PROJECT: Its not uncommon for Wyoming residents to pay more for energy than customers in other states we export to. I would like to see whether or not the wind turbine energy in Wyoming is available to Wyoming residents via RMP and at what rate in $0.000 per kwh it is being supplied to out of state consumers in the Las Vegas/Los Angeles areas. In other words, can RMP purchase wind energy cheaper for Wyoming customers than RMP can generate themselves?? RMP should be able to avoid a high transmission cost via the Transwest Express powerlines by buying locally. And, is this a situation where Wyoming will be getting the environmental impact, primarily in Carbon County, and still be hit with high electricity bills?? I am very suspicious about whether Wyoming is getting shafted the way things are going in the SW part of the state. We should be getting lower energy rates for products produced locally – not higher rates. whats wrong here??

  6. in other words, “Biden” being Obamas war upon Americans. And American greed ever ready to comply.

  7. A couple things that have fallen down the memory hole:
    “Wyoming in 2020 adopted the nation’s only law requiring that at least 20% of an electric utility’s portfolio be made up of coal-fired power plants” S & P Global 10/12/22
    “The law requiring these efforts was a legislative attempt to block utilities from retiring coal-fired power plants in the state.” WyoFile 2/8/23

  8. Sure glad I do not own an electric car. Paying for the utility bill for our home is already stretched the budget to the limit.

  9. Having often heard that coal and natural gas are the most affordable forms of electricity generation, one now wonders whom to believe. I fear, however, that once fossil fuel use is eliminated and exclusive renewable sources enter the picture, as mentioned, supposedly eliminating the “fossil fuel shock”, will “lack of electricity shock” be its replacement? Are we ready, yet?

  10. Take private “enterprise” out of the picture, by making the power companies PUBLIC utilities. Private ownership always leads to greedy owners, who love to gouge their customers. Best electrical service I ever had was with SMUD (Sacramento Municipal Utility District); fewer outages than I had, or have ever, experienced in my lifetime. Low rates, too.

    1. Harvey. I believe the states now control the amount of profit each utility can make. This going green is expensive electricity. Operation of the grid is expensive. Materials/man power costs are climbing. If you want a preview of government run utilities look to counties over seas. Highly erratic. Limited time periods of days you have power/water/gas. Harvey most of these providers have to purchase their power from others. So blame Biden and green crew for these increases. Plus bear in mind the utility bills are not included in BIDENFLATION numbers.