The Utah Public Service Commission heard multi-day testimony this week in the Rocky Mountain Power general rate case (Docket No. 24-035-04) on whether the utility may recover sharply higher excess liability insurance (ELI) premiums and how those costs should be allocated across states.

Why it matters: Rocky Mountain Power told the commission the company faces unprecedented increases in the cost and availability of liability insurance tied to growing wildfire risk, and asked the commission to (1) allow deferred accounting for incremental ELI premiums paid since August 2023 and (2) permit recovery of higher test-year premiums through base rates and a proposed insurance cost adjustment (ICA). The outcome would affect the utility’s 2025 revenue requirement and how much Utah customers pay for insurance costs that the company says protect customers from large third‑party liability losses.

Summary of requests and dollar figures
- Rocky Mountain Power told commissioners it seeks deferred accounting for approximately $104,400,000 (Utah‑allocated) in incremental ELI premiums paid since its August 15, 2023 policy period, a figure the company updated in Phase 3 testimony.
- For the 2025 test year the company asked to include $185,700,000 (total company) in annual ELI premiums in the revenue requirement; Rocky Mountain Power witness Shelly McCoy described Utah’s portion of the late‑2023 policy period incremental amount as about $49,500,000 and the Utah portion of the later 08/15/2024 policy as about $54,900,000 (the two Utah allocations together underpin the $104.4M deferral the company identified).
- The company proposed creating an insurance cost adjustment (ICA) — a rider to separate insurance costs from base rates and to provide a procedural vehicle for later consideration of a new multi‑state insurance mechanism (including possible self‑insurance components).

What company witnesses said
- Joelle Stewart (Rocky Mountain Power) summarized the company’s position that the ELI increases were prudent business decisions and necessary to protect customers from large claims. She said the company has been proactive in seeking cost‑effective commercial policies and exploring self‑insurance alternatives with stakeholders.
- Maria Coleman (Vice President, Insurance & Claims, Berkshire Hathaway Energy) testified about the insurance market, saying Pacificorp’s insurers did not identify the James jury verdict as the cause of the company’s premium increases and that the James damages verdict will never be part of the insurer‑paid loss history. Coleman testified insurers look broadly at industry‑level wildfire and litigation risk, that insured losses (actual payments) and marketwide trends drive pricing, and that utilities that operate across multiple Western states — as Pacificorp does — face particular exposure. “The company’s insurers have never pointed to the negligence verdict in James as the cause of the company's excess liability insurance premium increases since 2023,” Coleman said in her summary statement.
- The company’s other witnesses (including Frank Graves, a consultant with The Brattle Group, and revenue witness Shelly McCoy) presented analysis and calculations supporting the requested deferral and the company’s proposed allocation method (system overhead): Graves emphasized that industry‑wide increases and the structure of insurance markets make simple percentage comparisons across utilities misleading and argued against disallowing costs solely on the basis of those comparisons. McCoy explained how the company computed the Utah‑allocated deferral amount and the test‑year premium figures and noted timing complexities because the utility purchases multi‑jurisdictional insurance with policy periods that do not align with the calendar test year.

What intervenors and regulators asked
- Division of Public Utilities and several intervenors pressed the company on causation and prudence. DPU counsel asked whether loss history, litigation (including jury verdicts), or insurer discretion explained the premium changes and whether the company had presented evidence that the James litigation was not a cause. Utility and insurer witnesses pushed back, saying insurers price coverage based on many factors (paid losses, perceived legal environment, market capacity) and that paid losses, not unresolved verdicts, drive loss history used in underwriting.
- Utah Large Customer Group and others proposed alternative allocation methods that would shift more of the ELI cost away from Utah customers. Those parties argued that wildfire risk is concentrated on distribution/transmission assets and that allocation should reflect those system components; Rocky Mountain Power proposed continuing to allocate ELI on the system overhead (SO) factor used in the 2020 multistate protocol.

Closed/confidential materials and process notes
- The hearing moved to closed session at several points to consider confidential insurer materials and a recently issued report about the Santiam Canyon / Beachy Creek fire. The commission followed statutory procedure for closure; parties noted the record contains confidential underwriting materials and broker/insurer communications that they said were provided to parties for review. The commission said it would follow procedures for closed testimony when necessary.

Areas of disagreement and next steps
- Allocation: Company witnesses and some intervenors agreed the allocation question is important and complex. Rocky Mountain Power defended use of the SO factor (the company says the SO factor is the historically accepted method under the 2020 protocol and remains the best available method absent a principled multistate agreement). Intervenors urged state‑specific or component‑based allocations tied to wildfire exposure; the company said several workshop meetings are ongoing across the six Pacificorp states to seek a durable, principled alternative but that no consensus exists now.
- Causation/prudence: Several intervenors urged that the commission examine whether the company’s actions tied to historic wildfires should reduce recoverable insurance costs. The company’s witnesses said there was no evidence tying insurers' pricing decisions to the James verdict and that paid insurer losses and broader market conditions are the principal drivers of recent premium increases. Witnesses noted that prudence determinations — a regulatory judgment about whether actions taken were reasonable ex ante — are different from legal findings of liability.

What the commission heard about timing
- Rocky Mountain Power and its witnesses said the company expects to file a forward‑looking allocation proposal in future proceedings and is asking the commission to allow the ICA and the deferral in this docket to avoid immediate under‑recovery while policy work continues.
- At the outset of the hearing chair and counsel noted the Commission intends to issue a final order in the general rate case on or before April 25.

Where this leaves rates and process
- No formal rate order was issued at the hearing. The record now includes company testimony and rebuttals, DPU and intervener cross‑examination, closed‑session evidence, and a set of ongoing workshops the parties said they are using to develop allocation options. The commission will consider the evidence in writing and rule in its final order; parties flagged areas where they may request adjustments or further record development.

Ending: procedural and forward look
- The hearing continues in subsequent sessions on wildfire management plan issues; company and regulatory witnesses signaled both technical and policy work will continue in workshops. The commission took confidential material under seal where necessary and indicated it would follow up in the final order and in any further procedural scheduling.