Utah regulators probe Rocky Mountain Power’s spike in wildfire liability insurance costs

Rocky Mountain Power asked the Utah Public Service Commission to allow recovery of sharply higher wildfire excess liability insurance (ELI) premiums, saying the market changed after recent large wildfire liabilities. The company said it suspended dividends and managed capital to cover increased exposure; its chief financial officer, Nikki Koblia, summarized the company’s position and confirmed company filings and rebuttal testimony were unchanged since they were submitted.

Why it matters: The company proposed adding roughly $185.7 million of total-company ELI premium into the cost pool that funds rates, with a Utah-allocated share the company calculated at about $82.2 million. Division of Public Utilities (DPU) experts and other witnesses told commissioners that a large portion of the premium increases may be tied to recent litigation and company-specific paid losses rather than only to generalized market-wide risk. If the commission reduces the portion of premiums allocated to Utah customers, it could lower the amount Rocky Mountain Power is allowed to recover from Utah ratepayers.

What commissioners heard: DPU’s underwriting witness Peter Kelly (FTI Consulting) told the commission that modern underwriting is discretionary…