Accomplishments in 2008

Since 1986 UAE has been an active participant in all regulatory and legislative activity that affects electricity and the natural gas in Utah.

Legislation
The Utah Association of Energy Users played an active role throughout 2008 in both the legislative and regulatory arenas, making significant contributions on several fronts. UAE participated at the ground level in helping shape Senate Bill 202, which created the framework for a reduction in carbon dioxide emissions in Utah. The Energy Resource and Carbon Emission Reduction Initiative requires utilities to cut their carbon dioxide emissions 20% by 2025 using methods that include renewable energy generation, demand-side management and facilities equipped for carbon capture and sequestration. UAE was instrumental in securing a “cost effective” caveat to the increase of renewable energy projects under the competitive bidding process from 100 MW to 300 MW to protect utility customers.

2007 Rocky Mountain Power Rate Case
Rocky Mountain Power filed a rate case in December 2007, seeking a $161 million rate increase. UAE made an immediate impact by being the sole party to oppose the future test year, recommending a 2008 calendar year be used. The Public Service Commission adopted UAE’s recommendation, reducing the rate increase request by $40 million. UAE also participated in negotiations with the utility and other parties to reduce the requested 10.75% ROE to 10.25%. UAE secured a 3% increase for Schedule 9, despite high increases proposed by other parties. Several UAE revenue adjustments were accepted by RMP and adopted by the PSC.

PacifiCorp Integrated Resource Plan/RFP Process
UAE did an expansive amount of work in PacifiCorp’s resource planning and resource acquisitions. UAE was instrumental in the PSC’s July 2008 decision to require PacifiCorp to fully consider coal-fired generation bids as part of its solicitation for up to 2,000 MW of capacity and energy for 2012 through 2017. PacifiCorp had restricted its RFP in such a way that new or existing coal resources would only be considered by the company if the proposals were consistent with policies that comply with other state regulatory requirements in its jurisdiction, specifically California and Washington, which discourage coal resources. UAE fought the language, urging the PSC to not bow to other states by abandoning its pursuit of low-cost, adequate electric service in the State of Utah. The PSC adopted UAE’s language in two orders, requiring the utility to allow coal projects to fully compete in the selection process.

2007 Questar Gas Rate Case
UAE played an integral role in the Questar Gas rate case, also filed in December 2007. As in the RMP case, UAE led the effort in securing a hearing on the future test year sought by QGC. The PSC adopted UAE’s recommended test year, reducing the $27 million rate increase request by $5 million, nearly 20% of the total increase requested. The PSC also reduced QGC’s ROE request from 11.25% to 10% based on UAE’s work in the conservation enabling tariff in 2007, which illustrated the decoupling mechanism reduced the utility’s risk.

GreenHouse Gas
UAE remained involved in greenhouse gas issues in 2008. In 2008, UAE represented industrial interests in both regional and statewide greenhouse gas related initiatives. At the regional level, UAE has been tracking the developments of the Western Climate Initiative (WCI) and keeping UAE members informed. The WCI is a multi-state effort to cap greenhouse gas emissions through a multi-sector market based mechanism which in this case has evolved to a cap-and-trade system. UAE has participated in all of the WCI meetings and has submitted comments dealing with the scope of the overall program.

Multi-State Process
UAE continues to be the only MSP participant representing Utah industry in the MSP process, which deals with multi-state allocation issues. The primary focus of MSP activities in 2008 was examining the impact of a Wyoming-specific coal resource. MSP parties also continued to address determining the value of actual energy benefits and potential carbon offsets and how each state defines them in the PacifiCorp system.

Demand-Side Management
UAE continued to participate in RMP’s DSM activities in 2008, and the pursuit of cost-effective DSM programs. UAE was also a participant in the Energy Efficiency and Load Management working group for commercial and industrial customers with the Governor’s office, Salt Lake County, RMP and QGC, Utah Clean Energy and others.

For information about current regulatory activity that impacts your company, contact Kelly Francone @ 355-4365 or kFrancone@energystrat.com