Committee adopts SB 132 substitute to let new large power customers pursue alternative suppliers; transmission-cost split left to PSC review

Senator Sand, presenting SB 132 (third substitute) to the House Natural Resources, Agriculture and Environment Standing Committee on March 4, said the bill creates a competitive option for very large new electrical loads — data centers, industrial consumers or large manufacturers — to contract with alternate generators instead of being served only under the incumbent regulated utility’s framework. Senator Sand called the bill “a break from our traditional regulated monopoly” intended to attract large customers to Utah.

The substitute sets a threshold in the bill (the sponsor said 50 megawatts) for what the bill considers a large load and contemplates that prospective customers may first approach Rocky Mountain Power or seek alternative generators. If the proposed generation requires transmission across the grid, that element would go to the Utah Public Service Commission (PSC) to determine how much transmission cost should be socialized across the general rate base and how much should be assigned directly to the new load or generator. Senator Sand said the PSC could hire outside counsel or use in-house resources to determine an appropriate cost allocation.

Industry and consumer advocates gave mixed testimony in public comment. Craig Eller, senior vice president of resource strategy and development for Rocky Mountain Power, said the company generally sees the bill as workable but raised concerns about (1) language in lines 169–176 of the third substitute that Rocky Mountain Power believes could allow customers to choose a fixed tariff rather than participate in contracts under the program, and (2) Section 901, which Rocky Mountain Power said delays negotiation by pushing transmission-cost allocation to a PSC process that must be completed by January 1 in the bill’s timeline and could jeopardize timely agreement with large customers. Eller warned that some transmission costs may be appropriate to socialize because the wider grid will benefit; others should be assigned to the new load.

Stuart Clayson of NAOP (commercial real estate) and other business commenters supported the bill as a pathway to secure power for expanding industrial and commercial projects; Clayson said communities had lost projects for lack of delivered power. Michelle Beck, director of the Utah Office of Consumer Services (consumer advocate), asked caution on “beneficiary pays” approaches and raised concerns about shifting transmission costs to existing retail customers; she said the utility can represent customers but also shareholder interests and urged careful allocation.

The committee first adopted the third substitute and then voted to pass SB 132 with a favorable recommendation. Sponsors and other members said they would continue working to clarify language — in particular the Section 901 transmission provisions and the lines referenced by Rocky Mountain Power — to make sure existing ratepayers are protected while the state creates a pathway for new large loads.

Why it matters: committee members described the bill as a tool to attract large electricity consumers — including data centers and manufacturing — and to allow new generation to compete to serve those loads while preserving mechanisms for the PSC to adjudicate how transmission costs are allocated. Supporters argued the change is needed to respond to high-growth prospects that outpace traditional utility-planning assumptions; critics and the utility urged clearer protections for existing retail customers.

Votes at a glance: The committee adopted the third substitute (adoption motion moved and approved) and then voted to recommend SB 132 (third substitute) favorably; the transcript records unanimous committee approval on voice vote. Public commenters raised substantive issues with Section 901 and lines 169–176 that sponsors said they would keep negotiating.