The Phase III Hearing on DAO Docket Issues regarding Rocky Mountain Power's (RMP) rate case took place in Utah on March 23, 2025, focusing on the implications of climate change on utility costs and wildfire risks. The discussions highlighted the urgent need for the Commission to address the rising costs associated with climate-induced risks, particularly the skyrocketing excess liability insurance (ELI) premiums that are now directly impacting ratepayer bills.

Dr. Mitchell, a key speaker at the hearing, presented three proposals aimed at managing these climate-related costs while incentivizing RMP to reduce emissions. The first proposal suggested a static fifty-fifty cost-sharing model between ratepayers and the company for climate-induced costs. This approach would motivate RMP to manage its ELI premiums, which are influenced by climate change.

The second proposal introduced a flexible sharing band that would start at fifty-fifty but could shift to a seventy-thirty ratio in favor of ratepayers if RMP actively pursues cost-effective emission reductions. This option aligns with the electricity sector's goal of limiting climate warming to below 2 degrees Celsius, requiring an 80% reduction in emissions by 2030.

The third, more unconventional proposal suggested that the Commission deny cost recovery for climate-related costs from electricity rates, instead allowing recovery from state or federal sources. This would mean that taxpayers, rather than ratepayers, would bear the financial burden of climate-induced impacts, similar to the national flood insurance program.

Dr. Mitchell emphasized the importance of a comprehensive climate resilience adaptation and risk planning effort, which would analyze both current and future wildfire risks. He argued that relying solely on historical data for risk assessments could lead to costly mistakes, as climate change is rapidly altering wildfire patterns.

The hearing underscored the urgency of addressing climate change's impact on utility costs, with Dr. Mitchell noting that the electricity sector is responsible for a significant portion of Utah's greenhouse gas emissions. He called for innovative solutions to reduce emissions while maintaining reliable electricity service, highlighting Utah's potential for clean energy development.

As the Commission considers these proposals, the discussions reflect a critical moment for Utah's energy future, balancing the need for affordable electricity with the pressing challenges posed by climate change. The outcomes of this hearing could shape the state's approach to managing climate risks and ensuring the long-term sustainability of its energy systems.