Paul Alvarez evaluates Rocky Mountain Power's wildfire mitigation strategy in Utah hearing

On March 26, 2025, the Utah Public Service Commission convened for a Phase III hearing regarding Rocky Mountain Power's (RMP) rate case, focusing on the implications of wildfire risk mitigation strategies. The discussions highlighted significant concerns about the cost-benefit analysis used to evaluate these strategies, particularly regarding the values assigned to human life in the context of risk mitigation.

During the meeting, a key point of contention emerged around the proper values to incorporate into the cost-benefit analysis. This analysis is crucial as it determines the justification for various mitigation measures aimed at reducing wildfire risks. The possibility of conducting a sensitivity analysis was raised, allowing stakeholders to explore how different values could impact the justification for specific mitigation efforts. This approach could provide a clearer understanding of the trade-offs involved in wildfire risk management.

Paul Alvarez, an expert witness leading the wire group, presented his findings on RMP's wildfire mitigation plan. He emphasized the economic consequences of electric rate increases on Utah's utility customers and the broader state economy. Alvarez pointed out that the current structure incentivizes RMP to overinvest in wildfire risk mitigation, with costs ultimately borne by customers rather than shareholders. This raises questions about the fairness and effectiveness of the current financial model.

Alvarez also addressed a common misconception regarding the causes of wildfires, clarifying that many devastating fires in California were linked to inadequate operational and maintenance spending rather than insufficient capital investment. This insight suggests that improving maintenance practices and inspections could be more effective in preventing wildfires than simply increasing capital expenditures.

The hearing underscored the complexities of balancing cost, risk, and public safety in utility management. As discussions continue, the commission will need to consider the implications of these findings on future rate decisions and wildfire mitigation strategies. The outcomes of this hearing could significantly influence how utilities approach wildfire risks and the financial responsibilities of their customers.