By Mark Jaffe, EUCI energy writer
Three Utah electricity providers are seeking to block their power wholesaler, PacifiCorp, from adding $1.7 billion to their rates to pay for liabilities from a string of wildfires in Oregon and California.
The three – the Deseret Generation & Transmission Co-operative, Utah Associated Municipal Power Systems (UAMPS), and Utah Municipal Power Agency (UMPA) – have filed a complaint with the Federal Energy Regulatory Commission (FERC) calling for the commission to reject the PacificCorp rate plan.
“The Commission should not allow PacifiCorp to pass to its wholesale transmission customers extraordinary liabilities created by PacifiCorp’s devastating wildfires in Oregon and California,” the complaint said.
PacificCorp – a Berkshire-Hathaway Energy subsidiary serving utilities in California, Oregon, Washington, Utah, Idaho and Wyoming – wants to recover the $1.7 billion from wholesale customers in a single year.
“PacifiCorp’s effort to shift these massive liabilities from shareholders to ratepayers without a finding that PacifiCorp acted prudently is not an appropriate use of a formula rate, particularly when juries have already determined that PacifiCorp acted with gross negligence, recklessness, and willfulness,” the complaint said.
The company has not yet paid out any fire-related liability claims, although jury awards and settlements have already reached more than $650 million, with $48 billion in claims pending.
The proposal to gather the funds in a single rate-year “creates unconscionable rate shock for wholesale transmission customers,” the utilities said in their complaint. “The increase in transmission rates for wholesale transmission customers is both sudden and extraordinary.”
The wildfire fund would account for 19% of the rates, according to the complaint.
A spate of wildfires between 2020 and 2022 were linked to PacifiCorp.
In 2020, four wildfires – the Echo Mountain Complex fire, the Santiam Canyon fire, the South Obenchain fire, and the 242 fire – were linked to PacificCorp. In 2023, a jury found the power company liable.
“For each of the fires the jury found, both as to the named plaintiffs and the class that PacifiCorp was grossly negligent,” the complaint to the FERC said, adding that the jury also found PacificCorp’s actions “reckless.”
The jury awarded more than $100 million in punitive and economic damages to plaintiffs.
On September 7, 2020, the Archie Creek fire began in Douglas County, Oregon and burned an estimated 131,000 acres.
Lawsuits were filed by timber companies, individuals, the federal government and insurance companies relating to the fire. PacificCorp reached settlements agreeing to pay $299 million to 463 claimants and $250 million to the 10 companies with commercial timber interests. Several more lawsuits are pending.
Deseret Power is a regional generation and transmission cooperative serving six rural electric cooperatives. UAMPS and UMPA both provide power to municipal and public utilities.
The three power providers argue that loading all the costs on wholesale transmission customers is unfair when it isn’t shared with residential customers.
“The effect of such treatment is that a ratepayer in Salt Lake City (Rocky Mountain Power service territory) does not pay a single penny toward wildfire liability, while a ratepayer in the neighboring city of Bountiful (a public power city and member of UAMPS) shoulders a significant increase to their power bill due to the increase in UAMPS’ wholesale transmission rate,” the complaint said.
In its 2024 annual report, filed in December, PacifiCorp said it was seeking to recover wildfire costs in ratemaking proceedings in several states and has developed detailed wildfire mitigation plans for each of the six states in which it operates.
The company estimates that 9,700 miles, or 15%, of its distribution lines, are in “fire high consequence areas,” covering approximately 8% of its service territory and 10% of its customer base. About 2,000 miles of transmission lines are also in high consequence areas.
As of Dec. 31, 2024, PacifiCorp said all 2,000 miles of transmission lines have been mitigated by system relay protection schemes, and all 9,700 miles of distribution lines in the high consequence areas are set for some form of mitigation including 3,900 miles that are being placed underground.
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