U.S. Rep. Harriet Hageman earlier this week blasted Rocky Mountain Power for 30% rate hikes the company is proposing as a “sham,” and on Wednesday, RMP fired back, saying the increases are simply to cover the company’s costs.
“The company does not make a profit on these costs, and because they occur in large-scale commodity markets, they are beyond the company’s reasonable control,” RMP’s email response reads.
Why Increase?
Last spring, Rocky Mountain Power, which is owned by PacifiCorp, requested two electricity rate increases. A smaller increase requested in April is to cover unexpected fuel costs arising from high demand during last winter’s cold snaps, and a larger rate increase is a net power cost adjustment due to increases in purchased power and the cost of fuel.
RMP has petitioned the Wyoming Public Service Commission for an average 21.1% base rate increase along with a temporary 7.6% cost adjustment.
RMP’s Response
Hageman criticized the hikes as Democratic attempts to shut down fossil fuels and dependence on what she sees as unreliable alternative energies.
“Having realized quite some time ago that wind and solar will never be cost effective, the new approach is to artificially increase the cost of traditional forms of energy, thereby making ‘renewables’ appear to be economically comparable,” Hageman wrote.
RMP directly shot back, saying “contrary to assertions by some,” the company’s investments into wind power and other renewables have actually reduced the impact of fossil fuel costs and overall prices because wind and solar have no direct fuel costs. It says that without the new wind resources, rates would have increased by 60%, or $85.4 million in Wyoming.
The company says the increases are solely a result of significant spikes in the cost of natural gas and coal for their thermal plants along with rising costs of power on the regional wholesale market. Over the past two years, natural gas prices increased 89% while coal prices went up by 38%, which the company says has drastically increased the cost to run its power plants.
Open market power costs also have spiked by 199%, which has increased the company’s costs buying energy from the market when energy demand exceeds generation capacity.
The Other Side
Oil and gas advocates have blamed green-friendly policies and government subsidies as leading to supply chain cuts and overall cost increases.
Hageman mentioned how RMP is planning to close 2,614 megawatts worth of coal capacity over the next 10 years.
“RMP even recently touted its green energy federal subsidies as beneficial for its consumers, when in fact such subsidies are paid for by those same customers it now seeks to impose a 30% rate hike on,” Hageman wrote. “It is, in other words, a sham to get Wyomingites to pay on both ends.”
In an August Cowboy State Daily story, state Rep. Jon Conrad, R-Mountain View, explained how Wyoming’s trona industry would be significantly impacted by the rate increases in its ability to compete with China in the free market.
Hageman says RMP’s shift to green energy not only can’t keep up with the 24-hour energy demand, but also can’t handle the extreme pang of Wyoming winters.
“RMP's plans to continue this shift to ‘green’ electricity sources should not only portend future price increases, but serve as an omen of what a fossil fuel-less future will look like, in which energy poverty and rolling blackouts are increasingly common,” Hageman said.
The RMP rate increases also have been vehemently opposed by many in the public who’ve attended meetings by the hundreds in Wyoming this summer and fall.
“Rocky Mountain Power takes its obligation to meet the needs of our customers seriously and understands that a price increase is never welcome news,” the company responded. “We are committed to delivering reliable power in an inflationary environment and our rates will continue to be among the lowest in the region.”
The next meeting about the rate increases will be held Oct. 12 in Casper.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
