Rocky Mountain Power’s proposal to hike electric utility rates in Wyoming by an average of 29.2%, if approved, would put households and businesses in peril and only serve to line the pockets of the company’s shareholders and executives, which includes its parent company PacifiCorp’s owner, billionaire Warren Buffett.
That was the consensus among about two dozen people who spoke at a public comment hearing held by the Wyoming Public Service Commission Thursday in Casper.
“We’re going to lose a lot of businesses in the state when we start raising those costs,” Natrona County Commission Vice Chairman Dave North told Public Service Commission officials. “We need to have some justification. I just can’t see any way that the citizens of the state of Wyoming can afford to pay an additional 29-to-34%.”
Approximately 200 people attended the hearing at the Thyra Thomson Office Building, forcing organizers to open a spill-over room to accommodate the crowd. In response to the proposed increase — the largest utility rate hike in recent history in Wyoming — Gov. Mark Gordon and other state officials asked the commission to add more public comment hearings around the state.
The next hearing regarding the rate case will be at 5:30 p.m. Sept. 18 at Central Wyoming College in Riverton.
Among those who commented at Thursday’s hearing — elected officials, business owners, retirees, ranchers and fossil fuel workers — none believed that Rocky Mountain Power is being honest about its actual expenses, and expense forecasts, that are driving its request for higher electric rates.
Casper Mayor Bruce Knell alleged the utility has purposely inflated its request as a starting point to bargain for something lower that would more accurately reflect the actual level of its increasing costs.
“They even said this when they met with us last week, that they knew they were asking for too much,” Knell said. “Let’s actually ask for what you truly need, because the way of doing business this way is not appropriate. This is a $134 billion company, and it’s doing business like they’re selling a used car. That’s very bothersome.”
Rocky Mountain Power sometimes settles a proposed rate increase with state regulators based on specific stipulations, but it “does not artificially inflate the results of its expenditures,” spokesman David Eskelsen said. “All supporting financial information is disclosed to the commission, staff and intervening parties.”
The general consensus among commenters was the utility’s shift away from coal for generating electricity, and its spending to add renewable sources of energy, is likely the primary driver behind increasing expenses. The shift represents a double-jeopardy for Wyoming by diminishing revenues from fossil fuels while increasing the cost of electricity for residents, businesses and government.
“Rocky Mountain Power has been pulled by a radical left-wing agenda to invest in unreliable [renewable energy] generation,” Rep. Clark Stith (R-Rock Springs) said.
The company says its continued reliance on fossil fuels is responsible for the bulk of rising expenses given the price volatility of those commodity markets. Its shift to more renewable sources of energy — along with federal production tax credits — has saved Wyoming ratepayers an estimated $85.4 million, according to Eskelsen.
But most in attendance Thursday were not convinced. Several elected officials said the proposed rate increases are a case against renewable energy.
“The bulk of this [renewable] energy is not serving our Wyoming residents,” Mills Mayor Leah Juarez said. “Yet we are the ones who are assisting in building the infrastructure.
“If the commission chooses to approve the 29% total,” Juarez continued, “as mayor I will have no choice but to take a stand and start saying ‘no’ to [renewable energy] projects coming to Natrona County. There will be no more renewable farms in Natrona County under my [mayoral] term if this is the price that we have to pay.”
No municipality has such authority over projects outside its borders.
Rate cases
Rocky Mountain Power, the largest regulated monopoly utility in the state serving about 150,000 customers, filed a “general rate case” in March to set prices for the next several years. It says it needs to increase rates by an average of 21.6% to cover an extra annual $140.2 million in expenses necessary to serve its Wyoming customers.
At the same time, the company is asking for a temporary rate increase — an average of 7.6% — to recover $50.3 million of about $90 million in unexpected fuel cost and power purchase overruns in 2022 due to extreme weather events, according to its April filing with the state. Extreme cold, heat and drought last year spiked demand for electricity, forcing the utility to purchase natural gas, coal and “power purchases” at premium pricing, according to Rocky Mountain Power.
For example, as homes and businesses cranked up the heat in response to a cold snap that settled over much of North America in December, utilities were forced to compete for a limited supply of natural gas, temporarily pushing the market rate for the commodity beyond 400% of what it sold for in previous months, according to the company.
A portion of the $50.3 million energy cost adjustment rate increase has already been granted to Rocky Mountain Power. However, that rate case is still under review and subject to final approval.
The Public Service Commission will make a determination on both rate cases before the end of the year.
Risk and reward
Both residents and elected officials took aim at requests by Rocky Mountain Power to shed its risk of bearing part of fuel-cost overruns and its proposal to earn a maximum rate of return in Wyoming of 10.3%.
Regulated utilities in Wyoming typically split the risk of fuel costs with their customers in what’s referred to as a “cost-sharing band.” Currently, Rocky Mountain Power is responsible for 20% of fuel-cost overruns, while its Wyoming customers pick up 80%. In its current request, the utility wants to eliminate the cost-sharing band to make Wyoming customers accountable for 100%.
“They’re not going to take any market risks,” Rep. Stith said. “And if that’s the case, then the rate of return on equity should likewise reflect that fact.”
Though he has faith in the Public Service Commission to weigh Wyoming’s best interest in the rate cases, Stith said the Legislature is ready to take action if it becomes apparent that residents take all the risk and Rocky Mountain Power reaps all the benefits of rising energy costs. One effort lawmakers may take up again is a proposal for deregulated energy zones, Stith said, which could allow for more independent electrical power structures within the state.
“If the result of this is that we have unacceptable rate increases, then I think for the state Legislature, everything will be on the table,” Stith said.
Comments regarding Rocky Mountain Power’s proposed rate cases can be submitted via email at wpsc_comments@wyo.gov, or mailed to 2515 Warren Ave., Suite 300, Cheyenne, WY 82002.
I have been in nuclear power since joining the Navy and serving on nuclear powered submarines in 1963. Warren Buffet and Bill Gates are simply setting up their rates to make cost the the Natrium reactor they plan on putting in Kemmerer, Wyoming acceptable. These two billionaires already got about $2 billion in taxpayer hard earned funds from the Department of Energy
how much from the state?
Americans have never fully grasped the fact their national power grid from generation to consumption is a classic Communist operating system. Think Soviet Union. We are entirely interdependent on electricity for the masses and industry , but in order to serve all the people all the time an overarching legal and political bureaucracy runs it.
Except this is America. Does Warren Buffet and his Rocky Mountain Power tell that bureaucracy how to operate, or is it the other way around ? Follow the electrons ; follow the money. You will end up in a vast pit.
Truth be told, in this era of Climate Change we obviously need to evolve away from planet-strangling Fossil Fuels as quickly as possible. We should have started doing that 50 years ago. The singlemost important thing that the American people could do is begin decentralizing, De-Communizing the power grids.We need to move from having two vast national power grids down to a place where nothing larger than a business park or a neighborhood is responsilbe for its own power needs. In short, we ALL need to start moving off the grids. There are a hundred different ways to make electricity besides burning coal, natural gas, or fuel oil.
The Bottom Line is if you are grappling with this sudden 30 percent spike in power rates from a single giant corporation operating as a quasi-communist authority, know it did not happen overnight. Now is the time to begin undoing 75 years of anachronistic social engineering. Start locally by admitting that Rocky Mountain Power and Wyoming’s hellbent addiction to fossil fuels both reside on the problem side of the equation. Big communist power grids are s-o-o-o-o 20th Century. Time to go off grid , people.
Locally owned energy is definitely the way to go. Check out this article from the Institute for Local Self-Reliance (ILSR): https://ilsr.org/report-advantage-local/.
Does anyone know if these rate hikes have to do with the legislative mandates for coal-fired power plants to use carbon capture technology in WY?
RMP will need even higher rate hikes when they start construction of a nuclear power plant. Nuclear power is the most expensive power just ask Georgia where the Vogtle Nuke power plant is $17 billion over budget and residents are faced with huge rate increases. This will happen in Wyoming with the proposed nuclear plant and will make this proposed rate hike look small.
The USA made a lot of mistakes building nuclear plants over the past 50 years but I think we are finally learning our lessons. Letting coal fired plant executives build nuclear in the US was a huge one, which France and South Korea did not follow. Having US-centric view of the nuclear industry is not helpful if we are going to reduce carbon emissions.
Reuters does a good job of explaining the over runs and lessons learned.
https://www.reuters.com/business/energy/vogtles-troubles-bring-us-nuclear-challenge-into-focus-2023-08-24/
Rocky Mtn power needs to take a hike !! Get the hell out of Wyoming and get out now. I know the corporate structure behind Rocky Mtn Power and I am familiar with it’s parent Pacific Corp. Behind all of it are investors like that piece of crap Bill Gates. Time for Wyoming to find another more viable option. The ultimate answer is not Rocky Mtn Power. Get tough Wyoming !! Kick these bastards out now !! Too many power failures and no real future with these incompetents !!!
What about Warren Buffet? Is he also a piece of crap?? Utility companies should NOT be Wall Street based investments. They should be non profit, locally owned entities.
As a taxpayer I would rather own and be responsible for energy generation than own roads. I have enjoyed watching Wyoming and really most of the country miss that fact that Warren Buffett owns almost every bit of power generation no matter the source.
With that said the costs associated with closing down coal plants is going to be much higher than it would have been if we the people had forced them to manage their waste to protect the environment instead of getting exemptions.
Privatize the profits, publicize the losses. Lather rinse repeat.