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Miscalculation causes Rocky Mountain Power to decrease its rate hike starting this month

Rocky Mountain Power

Rocky Mountain Power’s Wyoming customers will see a fraction of the rate hikes that were initially proposed in spring of 2023. This partly has to do with some miscalculations by the utility company in the proposal.

Rocky Mountain Power initially requested two rate hikes last spring, amounting to an almost 30 percent increase, which was set to be fully reflected in Wyoming customers’ bills January 1, 2024.

The requested rate hikes 

The first hike the company requested was a temporary increase of $50.3 million, saying that extreme weather events and rising costs of fossil fuels cost the company more than initially expected.

That was part of the company’s ‘energy cost adjustment mechanism’. Because customers’ power rates are partly based on forecasted costs to the company, it is allowed to adjust its rates annually to essentially balance out the estimated-versus-actual costs for delivering power. This can go one of two ways – either a discount or an increase to customers.

That rate hike of 7.6 percent was tentatively approved by the Wyoming Public Service Commission, which regulates public utilities in the state. The plan was to fully approve the hike in late 2023, and it was to be collected over 12 months from Wyoming customers. That hike went into effect in July and Wyoming customers have been paying it since.

The second rate hike the company requested was a 21.6 percent increase, or $140.2 million, to its base rates – this is a permanent hike, rather than the temporary “energy cost adjustment”. The public service commission only approved an 8.3 percent hike, or $54 million, in early December, set to be reflected in customers’ bills this month.

The miscalculation 

In late December, the power company, which serves about 144,000 customers in Wyoming, admitted to an error in some of its calculations for the temporary rate hike, which customers have been paying since July.

So instead of the combined 29.2 percent rate hikes that were supposed to start this month, the miscalculation caused the increase to drop to about 5.5 percent. As first reported by Wyofile, it’ll cost about an extra $7.55 per month for the average residential Rocky Mountain Power customer in Wyoming starting this month.

“The Commission expects the company at a bare minimum to follow its orders, and the commission staff and intervenors should not have to be on the lookout for basic errors of that sort,” said Commission Chair Mary Throne at the meeting about the miscalculation.

The rate hike will ultimately be a bit more starting mid-summer, reflecting that second rate hike request that was approved at 8.3 percent, but is less now because of the miscalculation. That’s because since ratepayers had already been paying the first rate hike, there's a $9.4 million rebate that will be doled out between now and July. When that rebate runs out and the temporary rate hike expires in July then customers will feel the full 8.3 percent going forward.

Caitlin Tan is the Energy and Natural Resources reporter based in Sublette County, Wyoming. Since graduating from the University of Wyoming in 2017, she’s reported on salmon in Alaska, folkways in Appalachia and helped produce 'All Things Considered' in Washington D.C. She formerly co-hosted the podcast ‘Inside Appalachia.' You can typically find her outside in the mountains with her two dogs.
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