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PacifiCorp sues Wyoming regulators who rejected major electric rate hike

Wyoming’s largest energy supplier claims state regulators illegally usurped the federal authority over electrical rates.

PacifiCorp's Jim Bridger Power Plant outside Rock Springs rises beyond a 2.2 mile coal conveyor belt. (Andrew Graham/WyoFile)

By Angus M. Thuermer Jr

Wyoming’s largest energy supplier sued state regulators Thursday claiming they wrongly reduced a rate hike by disregarding federal requirements.

Filed in U.S. District Court by PacifiCorp, the parent company of  Rocky Mountain Power, the suit asks the court to overturn the commission’s January decision to approve only part of an electricity rate hike sought by the Oregon company, which is the largest utility operating in Wyoming. The complaint names Wyoming Public Service Commissioners Mary Throne, Christopher Petrie and Michael Robinson as defendants. 

The Wyoming order is improperly costing PacifiCorp a $23 million  loss, the company alleges.

Basis of the suit

PacifiCorp saw its rate hike request challenged by a group known as Wyoming Industrial Energy Consumers, which claimed the rate hike would force Wyoming customers to subsidize out-of-state users, according to the litigation.

The desire of consumers in other PacifiCorp states to choose or even require their utilities to secure some wind and solar power has chaffed coal-producing Wyoming, which has seen coal revenues dwindle.

PacifiCorp alleges Wyoming regulators practiced “local protectionism” when they issued their rate-case order. The commission agreed with the industrial coalition that the energy company didn’t have to incorporate costs associated with holding reserves of power necessary to guarantee power supplies.

The Federal Energy Regulatory Commission sets those costs for power reserves, the lawsuit says, and the state agency can’t adjust or recalculate them.

Wyoming’s PSC created “an entirely new methodology for calculating the value of reserves and that methodology is directly contrary to federal law and FERC precedent,” the suit states. The Wyoming rate order unfairly shifts costs to non-Wyoming power users, the lawsuit claims.

“The Commission thus violated the Commerce Clause by engaging in clear economic protectionism,” the lawsuit reads, “and by seeking to burden out of state parties by creating and exporting a [PacifiCorp] revenue shortfall.”

How PacifiCorp sees it

Here are some of the descriptions PacifiCorp used in its filing to explain the dense and complex regulatory forest it operates in.

Instead of having a capacity and supplies for reserve power generation, the commission agreed with the industrial group that such resources could be sold to the benefit of Wyoming ratepayers. PacifiCorp said those would be “fictional power generation and sales that [PacifiCorp] could not possibly make while complying with federal regulations, which were promulgated pursuant to FERC’s exclusive jurisdiction.”

“The WIEC adjustment relies entirely on a foundation of dislike and disregard for federal [power] reserve requirements,” the suit states. The industrial group used a “methodology [that] is directly contrary to federal law and FERC precedent.”

In addition to declaring that the Wyoming commission exceeded its authority and ordering it to reverse its decision, the court should allow PacifiCorp to collect attorneys’ fees, costs and expenses and potentially “further relief.”

Another rate hike proposed

Last month, Rocky Mountain Power filed for a 12.3% rate hike for its Wyoming customers to cover, among other things, higher-than-expected fuel costs in 2023, WyoFile reported at the time. That would bump the typical residential customers bill by about $12 a month. 
The size of last year’s proposed increases, meanwhile, sparked anger from customers and legislative action from state lawmakers.

This article was originally published by WyoFile and is republished here with permission. WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.