Not only are record gas and higher food prices hitting Utahns in the pocketbook, starting in August, Rocky Mountain Power customers will likely pay more to cool their homes, too.

Thursday's rate request by Rocky Mountain Power comes on the heels of a $75.4 million rate hike the utility requested in December and which is now under review by the Commission. In total, the utility, which has 760,000 customers in Utah, is asking for a $160.6 million rate increase.

If the $75.4 million rate hike is approved, a typical Rocky Mountain Power customer using 770 kilowatt-hours a month will pay an extra $3.53, or 5.6 percent more a month starting in August. And if the $85.2 million rate hike is also approved, that will raise the average customer's bill by another $3.53, or 5.7 percent more starting in March 2009.

Is it fair?

While it isn't unusual for utilities to file rate change requests to pay for investments in new plants and the maintenance of existing distribution systems, the state consumer watchdog found Rocky Mountain's back-to-back rate requests to be "unfair and improper."

"People are already struggling with the impact of rising energy costs, and we feel that Rocky Mountain Power's misuse of the system makes it even more difficult to protect consumers," Michele Beck, director of the state Committee of Consumer Services, said Thursday.

In this case, Rocky Mountain is asking the state Commission to do a second review of costs even before it is finished with the first review, she said.

"This approach is contrary to good public policy in which a utility would incorporate the outcome from one case into their next case. To pursue overlapping rate increase requests is an abuse of the system and waste of public resources," Beck said. "Why are they in such a hurry?"

Investment needed

But Rocky Mountain spokesman David Eskelsen disagreed.

"There have been overlapping rate cases in the late '70s and early '80s when there was a period of rapid growth and intensive power plant construction in Utah," he said.

The utility is planning to add 1,700 megawatts of new power generation to its pipeline by 2014 and projects those capital investments will cost $2.8 billion, up 40 percent from costs reflected in current rates.

"We think it's fair and proper that rates reflect the actual costs of providing services, and those costs are rising rapidly. It takes eight months to prosecute a rate case, so more frequent filings may be necessary especially in today's environment where the pace at which customer demand is growing requires us to make the investment," he said.

Rocky Mountain is adding at least 20,000 customers more in Utah each year, and its existing customer base is also using more electricity.

Eskelsen also blamed rising prices of steel and concrete for higher capital investments in power plant construction. It now costs between $6 million and $8 million to build a substation, up from $3 million in 2000. Wind turbines, which are made of steel and concrete, cost about $1 million to build in 2003. Now, one turbine costs about $2 million to $3 million, he said.

"The costs that are driving the increase in power rates are affecting all sectors of the economy as well. It's poor public policy to overly react to fluctuations in short term economic conditions. The investment we make will serve customers for decades to come, but they are also needed by customers today," Eskelsen said.

New parameters

Another reason he cited for the second rate request was new parameters under which the state Commission had ordered the utility earlier this year to resubmit its rate case. The new parameters required the utility to limit its cost projection "test" year to calendar 2008.

In its initial request in December, the utility had asked for a $161 million rate increase but cut that down to $75.4 million as a result of accounting adjustments under the new parameters.

"But we're still going to make those investments in expanding distribution. It is out of respect for the Commission's concern that we've used a test period that doesn't look as far into the future as we could probably justify," Eskelsen said.

Commission spokeswoman Julie Orchard said she was surprised by the speed at which the second rate request was made and stressed the state will investigate the request to make sure it's "fair and just."

"It's the responsibility of Consumer Services to watch out for the small ratepayers and people on fixed income. They are the ones who are going to be hurt the most because they have less capacity to pay," she said. "Every rate increase that customers receive makes us all nervous, and the Commission worries about that as well."