Wyoming’s largest utility told state regulators this week that its investment in wind farms and transmission infrastructue justifies the company’s proposed rate increase.

Reported by Staff

Salt Lake City-based Rocky Mountain Power is seeking approval from the Wyoming Public Service Commission a proposal that would raise overall electrical rates by 5.1 percent in July and 1.9 percent in February, 2011, to generate another $35.5 million in revenue per year.

“This is a case about capital investment,” company President Rich Walje  told regulators, adding that the company has recently spent nearly $3 billion on its system. “We’ve made several investments in economic wind projects and transmission systems — not only to deliver new generation to a growing customer base but also to help us meet our local load growth.”

With than 134,600 customers in Wyoming in the Green River basin, parts of the Big Horn Basin, the Casper area, Rawlins and Laramie, Rocky Mountain Power is a key utility player in the state. The Public Service Commission hearing is expected to last into next week, followed by a commission decision sometime later.

During his testimony on Monday, Walje said the company is not charging Wyoming customers for wind projects that benefit oher states, such as California, which requires that part of its electricity come from renewable sources.

“Our wind investments are made for economic purposes for all of our customers, and Wyoming customers are not subsidizing in any way renewable portfolio standard requirements in any other state,” Walje said.

Rocky Mountain Power, Wyoming’s largest utility, has asked state regulators to approve what amounts to a $70.9 million rate increase. If approved, residential customers will pay about 14 percent more for electricity.

Critics of the rate increase include the Association of American Retired People (AARP), which has voiced concern. “We are concerned that this proposed rate hike is coming at a time when our members are already struggling to adjust to the abrupt shift in the national economy,” AARP Wyoming Director Tim Summers said. “Many of our members have had to dip deeper into their retirement savings – accounts that have been hurt by the drop in the stock market – to make ends meet.”

Last fall, Rocky Mountain Power applied for a $71 million increase (about 13.7 percent), but earlier this year that amount was reduced to $35.5 million after the power company reached an agreement with some electricity users that intervened in the case.

That agreement also includes the utility’s proposed power cost adjustment taking effect this month, which would reduce rates this year by an overall average of 3.8 percent. For the average residential customer in RMP’s service area, it would mean about a 2.8 percent rate reduction.

The Wyoming Office of Consumer Advocate, an independent branch within the commission, was among those that signed onto the agreement. Office Administrator Bryce Freeman said he believes it was a good resolution.

Wyoming Industrial Energy Consumers is also in agreement with the reduced rate increase. The group includes 22 companies from the trona, oil, gas, pipeline and manufacturing industries. Industrial users consume more than half of the electricity Rocky Mountain Power provides in Wyoming.