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Utah governor signs bill for PacifiCorp coal plant account, clean energy programs

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Utah governor signs bill for PacifiCorp coal plant account, clean energy programs

UtahGov. Gary Herbert on March 30 signed a bill with many provisions requested, includinga "rainy day" coal plant retirement account and a 100% pass-throughof power supply costs without general rate case review.

S.B.115 was titled the Sustainable Transportation and Energy Plan Act, after thename of a program the BerkshireHathaway Energy subsidiary promoted as a means for funding electricvehicle infrastructure, clean coal research, a renewable energy tariff andmanaging environmental costs to its customers.

Yetthe legislation also dealt extensively with demand side management accounting,plant depreciation and power supply cost recovery.

Herbertsigned the bill, sponsored by Sen. J. Stuart Adams, on the final day thegovernor was allowed to take action on bills passed during the 2016 generallegislative session.

Severalprominent clean energy and consumer groups initially opposed the bill as toocomplex and risky for ratepayers, but many objections were addressed throughrepeated amendmentsand meetings between legislators and stakeholders. Even then, the measure'spassage remained in doubt until the House reversed an earlier vote to defeat the bill on the lastnight of the session.

Still,PacifiCorp, which does business as Rocky Mountain Power in Utah, got most ofwhat it wanted. The new law allows PacifiCorp, which serves most of the state'selectricity customers, to tie through accounting mechanisms the future expenseof any premature coal plant retirements to the utility's energy efficiencyprograms.

The UtahPublic Service Commission must now authorize PacifiCorp to establish aregulatory asset for accelerated depreciation of its coal-fired plant assetsthrough the utility's 4% demand-side management cost adjustment for energyefficiency services and programs.

Furthermorethe law changed PacifiCorp's energy balancing account mechanism so that inaddition to the amount of power costs the utility recovers in general rates,the utility can now collect 100%, instead of just 70%, of any additional powercosts through that mechanism. The energy balancing account is a ratemakingtechnique used to adjust rates outside of a general rate case process. Inrecent years, the remaining 30% has been subject to rate case review. However,the bill will only allow this arrangement on a three-year tryout basis andlawmakers will have to pass legislation afterward to make the arrangementpermanent.

Amongother provisions, the new law establishes solar incentives, establishes afive-year pilot program to provide electric vehicle infrastructure, incentivesfor stopping the use of a power plant during days of high pollution and otherprograms to be funded by consolidating the utility's customer efficiencyservices charge and the Utah Solar Incentive Program surcharge.