In its proposal to the state’s Public Service Commission, the utility said the residential increase would be done in two installments, starting with one that would drive the average price of every kilowatt-hour from 10.96 cents to 12.89 cents, effective Feb. 23, 2025. Ultimately, the price would go up to 14.31 cents per kilowatt-hour on Jan. 1, 2026, according to a news release.

By Jan. 2026, households would be paying an additional average of $24.14 per month with the proposed hike — an average $13.87 monthly increase per household under the first part of the rate raise, and an additional $10.27 per month from the second part.

Rocky Mountain Power cited increased costs of fuel and wholesale power, tied with ongoing new electric transmission and generation projects, for the rate increase. The company also mentioned escalation of wildfire risk insurance premiums as a significant reason to up rates.

“Like many businesses in these difficult economic conditions, the utility is facing inflationary pressures and increased costs outside of its control that cannot be offset through hard work and business discipline alone, making it necessary to seek a rate increase at this time,” Dick Garlish, Rocky Mountain Power President, said in the release.

For non-residential Utah customers, the average kilowatt-hour would go from 8.18 cents to 9.5 cents on Feb. 23, 2025. Then, on Jan. 1, 2026, the company would further raise the 9.5 cents to 10.49 cents.

The goal is to increase rates to the overall amount of $667.3 million, the application reads, which would cover a base revenue increase of $564.9 million, in addition to $81.4 million for excess liability insurance and $21 million for amortization of deferred wildfire mitigation costs.

In a strong statement on his X account, Utah Gov. Spencer Cox said he would work to make sure the proposal won’t become effective.

“The proposed rate increase from Rocky Mountain Power would be laughable if it wasn’t so dangerous. The proposal is completely unacceptable,” Cox wrote. “The audacity and lack of awareness with this request seriously calls into question management at RMP. I will do everything I can to make sure a rate increase of that magnitude never sees the light of day.”

However, this isn’t a new approach for the utility. The company has proposed two-digit increases in other states it serves — not always successfully.

A proposal to raise rates by 29.2% fell through in Wyoming last year after Rocky Mountain Power acknowledged a major accounting error on its fuel cost calculations.

An agreement then allowed an increase of 5.5% for Wyoming customers which began in January and went up this month to 8.3%. The utility went back to the table in April to ask for an additional 12.3% rate increase, according to reports from WyoFile. The company later sued Wyoming regulators for the partial hike approval.

Largest increase drivers

Residential electric bills have remained fairly stable in the last decade, with annual bills for the average household only fluctuating slightly in the high $800 and low $900 range. Government officials have often cited studies ranking Utah as one of the states with the lowest electricity bills.

But that favorable ranking may change if rate increase of this size is implemented.

The largest drivers for the rate change are the “significant increases in regional power and fuel prices,” the application reads.

Michele Beck, director of the Utah Office of Consumer Services, has seen an overview of the proposal and has experts looking at it. A full analysis of those calculations can only come after weeks or months of closer scrutiny, she said. But, as of now, she acknowledges that the drivers that are pushing the cost up are “legitimate.”

“The environment of the electric industry is changing very, very quickly. And so power costs are legitimately up. Investment in new resources raises rates,” Beck said.

However, while she was expecting a large number in the proposal, she was still surprised to see how large it was.

Some of the factors Beck’s office will also be evaluating include the cost for wildfire insurance and whether shareholders should take on some of that insurance risk — as well as how the states that Rocky Mountain Power serves can share those costs, Beck said.

“Ratepayers can be assured that there are multiple parties scrutinizing it, and we do get access to the data. It’s just such a large number that even if we find mistakes, even if we say, ‘not all of that should be included,’ I feel like the end result will still be a large number,” she added.

Many factors are contributing to the increase in fuel prices, said Logan Mitchell, climate scientist and energy analyst at Utah Clean Energy. One is the Russia-Ukraine war, which has increased the prices of natural gas and coal. But there have also been issues with coal supply and demand that have been driving up the price of the resource.

“The (Cox) administration, the Office of Consumer Services, Division of Public Utilities, have an extraordinarily important role in this process,” Mitchell said. “But at the end of the day, much of these costs are coming from the cost of fuels, and so until we can invest in our grid and transition away from those, the most significant cost drivers, we’re going to be stuck in a cycle of increasing costs.”

However, Rocky Mountain Power also notes those increased costs are “mitigated by the company’s investment in wind facilities and in the Gateway South transmission line, which allows for the deployment of additional capacity from Wyoming wind and coal resources.”

The extra coal and natural gas expenses are also further alleviated by the utility’s participation in the Western Energy Imbalance Market, which allows companies like PacifiCorp — Rocky Mountain Power’s parent company — to buy and sell energy in real time, finding the cheapest alternatives. PacifiCorp saved more than $73 million during 2024’s first quarter with this system, according to a Western Energy Imbalance Market report.

For Sen. Nate Blouin, D-Millcreek, who has worked in the renewable energy sector, it is “reasonable to ask for those increases,” he said. “But to do it all at once is the frustrating piece.”

In his view, the rate adjustment should have been done in a more sustainable way. He also doesn’t see how Cox could counteract Rocky Mountain Power’s ask, but hopes the commission  is also ready to “really give this a lot of scrutiny.”

Additionally, though these calculations have included escalated costs for wildfire mitigation, the company may need additional insurance not yet included in the proposal. PacifiCorp hasn’t fully considered how SB224, which establishes a catastrophic wildfire fund, will work either, so the cost can continue to go up, Mitchell highlighted.

“Our historic carbon emissions, including from our power company, are driving climate change, which is making wildfire conditions worse, which is driving up our electricity costs. So this is a direct cost of climate change that is now coming home to roost and affecting Utahns’ electricity costs and rates,” Mitchell said.

Utah News Dispatch is a nonprofit, nonpartisan news source covering government, policy and the issues most impacting the lives of Utahns.