Wyoming’s largest energy supplier filed a lawsuit against state regulators Thursday, claiming they wrongly undercut its rate hike by ignoring federal requirements.
The lawsuit filed in U.S. District Court by PacifiCorp, the parent company of Rocky Mountain Power, asks the court to overturn the commission’s decision in January to approve only part of the electricity rate increase sought by the Oregon utility, the largest utility operating in Wyoming. The complaint names Wyoming Public Service Commissioners Mary Throne, Christopher Petrie and Michael Robinson as defendants.
The company alleges that the Wyoming order improperly cost PacifiCorp a loss of $23 million.
Basis of the claim
PacifiCorp saw its rate hike request challenged by a group known as the Wyoming Industrial Energy Consumers, which claimed the rate hike would force Wyoming customers to subsidize out-of-state users, according to the lawsuit.
The desire of consumers in other PacifiCorp states to choose or even require their utilities to secure some wind and solar energy has angered coal-producing Wyoming, which has seen coal revenues dwindle.
“The entire (Wyoming Industrial Energy Consumers) Amendment rests on a foundation of hatred and disregard for federal (energy) reserve requirements.”
PacifiCorp
PacifiCorp alleges that Wyoming regulators practiced “domestic protectionism” when they issued their rate status order. The committee agreed with the industrial alliance that the energy company did not have to incorporate costs associated with holding energy reserves needed to ensure energy supply.
The Federal Energy Regulatory Commission sets those costs for energy reserves, and the government agency cannot adjust or recalculate them, the lawsuit says.
The Wyoming PSC created “an entirely new methodology for calculating the value of reserves, and this methodology is in direct conflict with federal law and FERC precedent,” the lawsuit states. The lawsuit claims that Wyoming’s interest rate order unfairly shifts costs to energy users outside of Wyoming.
“Thus, the Commission violated the Commerce Clause by engaging in clear economic protectionism, and by seeking to burden States Parties by creating and exporting Pacific Corp revenue shortfalls,” the lawsuit said.
How PacifiCorp sees it
Here are some of the descriptions PacifiCorp used in its filing to explain the dense and complex regulatory jungle in which it operates.
Instead of having the capacity and supplies to generate backup power, the commission agreed with the industry group that these resources could be sold to benefit Wyoming taxpayers. PacifiCorp said these would be “imaginative energy generation and sales that (PacifiCorp) cannot undertake while complying with federal regulations, which are deployed pursuant to the exclusive jurisdiction of FERC.”
“The WIEC Amendment is based entirely on the basis of hatred and disregard for the Federal Reserve (power) requirements,” the suit states. The industry group used “a methodology that is (in)direct conflict with federal law and FERC precedent.”
In addition to declaring that the Wyoming commission exceeded its authority and ordering it to reverse its decision, the court should allow PacifiCorp to recover its attorneys’ fees, costs and expenses and possibly “further damages.”
Proposed another interest rate hike
Last month, Rocky Mountain Power filed for a 12.3% rate hike for its Wyoming customers to cover, among other things, higher-than-expected fuel costs in 2023, WyoFile reported at the time. This would raise a typical residential customer’s bill by about $12 a month.
Meanwhile, the size of the increases proposed last year sparked customer anger and legislative action by state lawmakers.
