Rocky Mountain Power asks Utah PSC to approve 2023 wildfire mitigation plan and recover $21 million in deferred costs

Rocky Mountain Power asked the Utah Public Service Commission on the record to approve its revised 2023 Wildland Fire Protection Plan, include wildfire-mitigation costs in the 2025 test‑year base rates and allow recovery of $21,000,000 in deferred mitigation costs recorded for 2021–2023.

The company says its plan meets Utah’s Wildland Fire Planning and Cost Recovery Act and that the calculation of costs for 2025 should be reflected in rates that become effective April 26, 2025. “Rocky Mountain Power seeks Commission approval of several items related to its wildfire mitigation plans,” Rocky Mountain Power senior vice president of regulation Joelle Stewart said in sworn testimony admitted to the record.

Why it matters: the requests would shift sizable wildfire‑mitigation spending into customer rates and set the baseline the Commission will use to measure future incremental mitigation costs. Intervenors including the Utah Office of Consumer Services and the Division of Public Utilities argued the company has not provided the kind of quantitative cost–benefit or risk‑spend efficiency (RSE) analysis some parties and the Commission say is needed to demonstrate that costs are appropriately balanced against risk reductions.

What Rocky Mountain told the Commission - The company’s witnesses summarized the major components it wants the Commission to accept: approval of the revised 2023 plan; inclusion in base rates of mitigation costs for the 2025 test year; and approval to recover $21,000,000 in costs deferred for calendar years 2021–2023 over 12 months through Schedule 97 (the wildfire mitigation balancing account, WBA). In her summary, Stewart also recommended a separate docket to develop methods for quantitative evaluation of costs and risk for future plans. - Josh Jones, vice president of asset management — wildfire strategy, told the Commission the utility uses a statewide wildfire‑risk model to identify where to target the most costly “system hardening” measures. “The company has developed a very comprehensive and robust wildfire risk model,” Jones testified. He said the company designates roughly the top 15 percent of modeled risk as the Fire High Consequence Area (FHCA) and prioritizes system hardening there, while using operational changes and vegetation management more widely. - Rocky Mountain’s financial witness, Shelley McCoy (director of revenue requirement), presented the company’s revenue‑requirement numbers tied to the 2025 test year: a requested WBA base of about $49.2 million, a related rate base of about $193.8 million, and 2025 capital spending in the plan of $156.9 million. McCoy said the company seeks to recover the deferred WBA balance of $21,000,000 over 12 months and that company work‑order and transaction‑level records demonstrate those deferred amounts are incremental to costs in base rates.

Points of dispute - Independent evaluator and parties: The independent evaluator (IE) retained by the Commission (report filed 01/09/2025) said Rocky Mountain’s plan addressed statutory elements and modeled risk, but the IE concluded it could not determine whether the plan had properly evaluated mitigation costs and benefits because the company did not perform an RSE or other detailed cost‑benefit analysis for the plan. The IE recommended further work on methods and inputs before applying a strict RSE across a plan of this scale. - DPU and OCS objections: Division of Public Utilities counsel and Office of Consumer Services witnesses pressed that the company has the burden to demonstrate costs are incremental and prudent and that the record lacks the detailed, monetized comparison of costs and risk reductions that would allow the Commission to judge whether the plan “appropriately balances the cost of implementing the plan with the risk of a potential wildland fire” as required by Utah statute (Utah Code chapter 54‑24). DPU asked for clarity on whether particular line items are incremental to base rates; OCS witness questioned whether the company’s labor and contractor costs were sufficiently separated from amounts already funded in base rates. - Company response: Rocky Mountain witnesses said the record contains substantial evidence that the plan meets statutory elements, that the IE and the Utah Division of Forestry, Fire & State Lands found the plan addressed the required elements, and that the company’s detailed project scoping, competitive bidding, and work‑order tracking support that costs are prudent and incremental. Company witnesses said an RSE is evolving in other jurisdictions, that it is appropriate for alternatives analysis but not practical as a single pass metric for an entire plan today, and that a collaborative docket or technical workshops would be the efficient way to reach agreed methods for monetizing risk and benefits going forward.

Key figures and program mechanics - Deferred costs sought for recovery: $21,000,000 (recorded for calendar years 2021–2023; company proposes recovery over 12 months through Schedule 97). - Proposed WBA base (2025 test year): about $49.2 million. - Rate base tied to WMP for test year: about $193.8 million (company explains the difference between 2025 capital in the plan and rate base reflects projects in service timing and 13‑month average rate base treatment). - 2025 plan capital spending (company’s plan): $156.9 million (company notes capital is spending that must be completed and placed in service before inclusion in rate base).

Procedural and next‑step items - At the hearing the Commission said it would accept post‑hearing briefs on Phase 3 legal issues; briefs were directed to be filed no later than 10:00 a.m. on Monday, April 7, and were capped at 25 pages. The Commission also agreed to order expedited transcripts at the Commission’s expense to make the hearing record more accessible to all parties.

What remains unresolved - The Commission must decide (a) whether the revised 2023 WMP complies with Utah statute and Commission rule, including the statutory balancing requirement, and (b) whether the deferred and test‑year costs are prudent and incremental to warrant recovery in rates or through the WBA. Parties differ over the form and level of quantitative evidence needed to support that determination; Rocky Mountain urges approval with a collaborative follow‑up process to develop measurement methods for subsequent plans.

Context and community impact - Testifying Rocky Mountain witnesses described measurable operational changes the utility has made since 2020 (expanded inspection cycles for high‑risk circuits, enhanced meteorology and situational awareness, new patrols and condition corrections, and competitively bid system‑hardening projects). Company witnesses and intervenors agreed that wildfire risk and mitigation costs in the West have grown since 2020 and that those changes create both public‑safety and rate implications.

The Commission will weigh the technical record, the IE’s findings, the company’s project‑level documentation and work orders, and the policy question of what kind of quantitative standard the Commission should require when it issues its decision on the 2023 plan and associated cost recovery.