Expert Testifies on PacificCorp's Insurance Costs and Wildfire Liability Comparisons

During a recent government meeting in Utah, discussions centered on the ongoing Phase III Hearing regarding the Rate Case for Rocky Mountain Power (RMP) highlighted significant concerns about utility insurance costs and their implications for consumers.

Key testimony revealed that the cost comparisons made by expert witness Mr. Einfeld, particularly regarding insurance premium increases among Western utilities, were scrutinized for their methodology. While both parties utilized the same data, it was noted that Einfeld's approach converted costs into percentage increases, which may not accurately reflect the nuances of coverage differences among utilities. This raised questions about the validity of his conclusions, particularly regarding Avista's insurance coverage, which was criticized for including more items than PacificCorp's, potentially skewing cost comparisons.

The meeting also examined the insurance costs of various utilities, revealing stark contrasts. For instance, Pacific Gas and Electric paid 79 cents per dollar of coverage, while PacificCorp's figure stood at 32 cents. This disparity prompted discussions about the implications of historical liability findings, particularly in relation to wildfire incidents. Testimony suggested that utilities with a history of being found at fault for wildfires, like PG&E, faced higher premiums compared to those without such findings, such as San Diego Gas and Electric.

The complexities of these comparisons were emphasized, with experts cautioning against drawing premature conclusions about the reasons behind PacificCorp's higher costs. Factors such as the size of service territories and the nature of risk exposure were highlighted as critical elements influencing insurance premiums.

As the hearing progresses, stakeholders are keenly aware of the potential impact these discussions may have on future utility rates and the broader implications for consumers in Utah. The outcome of this hearing could shape the financial landscape for utility customers, making it a pivotal moment for both the industry and the public.