Utah residents faced a significant rise in electricity prices when Rocky Mountain Power (“RMP”) filed a General Rate Case (“GRC”) with the Public Service Commission of Utah seeking a $331.5 million rate increase. The company cited rapidly rising costs, including an $82.0 million increase for their liability insurance. The Utah Division of Public Utilities (“the Division”) engaged FTI Consulting as an independent advisor to assess the appropriate level of excess liability insurance costs that should be passed on to Utah ratepayers.
Armed with FTI Consulting’s independent analysis, the Division persuaded regulators to disallow 86% of RMP’s requested excess liability insurance cost recovery, which in turn saved Utah ratepayers $70.4 million.
FTI Consulting’s data-driven insights, actuarial analysis, utility sector experience and actionable recommendations supported the Division’s mandate to protect public interest, allowing them to identify potential savings and ensure that only reasonable, justifiable insurance costs were included in customer rates.
Provided with written testimony, expert reports and strategic guidance, the Division and their counsel were well positioned to give strong arguments and rebuttals during the hearings on raising rates to customers.
FTI Consulting was selected by the Utah Division of Public Utilities (“the Division”) for our multidisciplinary expertise across utilities, actuarial analysis and insurance risk.
Our experts conducted a comprehensive review of RMP’s GRC filing, focusing on the significant increase in proposed insurance premiums, including excess liability and wildfire-related coverage.
We closely examined the allocation methodology for Utah’s share of excess liability insurance costs, removing bias and identifying unintended cross-subsidies to model a balanced and statistically supported regulatory outcome.
The team benchmarked RMP’s insurance expenses against peer utilities in similar wildfire-prone states to determine the reasonableness of requested costs and ensure alignment with industry norms and standards.
We advised the Division and their counsel on approaches and arguments and provided in-person testimony to support the Division in their hearings.
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