PRECorp rate case set for public hearing

Powder River Energy’s (PRECORP) bid to adjust its rates this year has been scheduled for a public hearing this month. The cooperative proposed the increase to the Wyoming Public Service Commission (PSC) at the tail end of 2019 in an effort to offset declining sales in the energy industries caused by industry consolidations and idling facilities.

If approved by the PSC, the revised tariffs would increase the overall system revenue by $7,030,045 per year. The new rates would go into effect on September 1.

For the average residential customer, the proposal is expected to involve an average monthly increase in charges from $127.05 to $138.28. This is an expected rate increase averaging 8.87%, while the general service basic charge would increase by $5 and the general service rates by around 8.86%.

PRECorp’s overall request incorporates four elements. As well as the system revenue increase, the cooperative has requested to restate the base cost of power in its Cost of Power Adjustment to reflect the current level of power cost; revise existing base rates accordingly; and revise rates to recognize changes in the cost of providing service while moving rates for all classes closer to the cost of service.

PRECorp’s justification for the move is the need to ensure its stability – both operational and in terms of its finances – in a declining sales environment. The major factors in this shortfall are coal bed methane, oil, gas and coal customers; in all these categories, PRECorp reports declining sales.

Speaking at the beginning of the application process, CEO Mike Easley explained that PRECorp has been in a significant period of declining sales for at least five years but, until now, has been able to offset the problem. This has been achieved through cutting costs and using technology to improve efficiency.

“We’ve reduced our workforce by 20 percent since 2015, and it’s been mostly due to attrition – we’re just not hiring positions back when people have either left or retired,” he added.

“We’ve got to the point now that…if we were to do any more cutting in our budget we think we would be reducing reliability and our quality of service would go down.”

The PSC will not necessarily approve the rate changes as proposed by PRECorp. If increases are indeed approved, they could be lower or greater on an individual customer basis than those being proposed by the cooperative.

The public hearing will take place on July 27 at 9 a.m. in Cheyenne. It can be accessed online by visiting psc.wy.us and following the instructions to connect.