Been reviewing Rocky Mountain Power bills for a retail chain with locations across Utah and the fuel adjustment calculations seem off. Their published fuel cost report shows natural gas at $3.21/MMBtu average for Q2 2024 but I'm calculating a fuel factor that should be about $0.015/kWh lower than what they're charging. Anyone else auditing RMP accounts seeing similar discrepancies? The math just doesn't work out based on their fuel mix percentages.
Rocky Mountain Power fuel costs - something doesn't add up
Connie, RMP's fuel adjustment methodology is pretty complex because they factor in coal, gas, hydro, and purchased power costs. Are you including the coal plant maintenance adjustments in your calculation? APS here in Arizona has similar complexity and I've found their fuel reports sometimes lag actual costs by a month. Also check if they're using Henry Hub pricing versus local basin pricing for gas costs.
Sarah raises a good point about coal adjustments. Puget Sound Energy up here includes hydro generation variability in their fuel calculations which can throw off the math if you're only looking at fossil fuel costs. RMP has significant hydro generation that affects their overall fuel mix. You might need to request their detailed fuel cost breakdown by generation type to do an accurate calculation.
I audit some accounts in RMP territory and they definitely have one of the more complex fuel adjustment methodologies. Their coal plants have environmental compliance costs that get rolled into fuel adjustments, plus they buy significant power from other utilities. The Wyoming coal costs alone have multiple adjustment factors. Have you tried requesting their FERC Form 1 data to see the actual fuel cost breakdown?
Good suggestions everyone. I did request the detailed fuel cost data but RMP is claiming it's proprietary information and won't release it. That seems suspicious to me - most utilities provide fuel cost backup when properly requested. David, I haven't looked at their FERC Form 1 yet but that's a great idea. Lester, you mentioned Wyoming coal costs - are those tracked separately from Utah operations?
Connie, yes RMP breaks out costs by plant location. Their Wyoming coal plants (Jim Bridger, Naughton) have different cost structures than Utah plants. The FERC Form 1 will show fuel costs by plant which should help you verify their blended rate calculations. If they're refusing to provide fuel cost data, you might need to file with the Utah PSC. That's public information they're required to share.
Lester's absolutely right about filing with the PSC if they're withholding fuel cost data. PPL tried that same "proprietary information" nonsense with me in Pennsylvania until I cited the right regulation. Utah Code requires utilities to provide supporting documentation for rate calculations upon customer request. Don't let them stonewall you - this is exactly why regulatory oversight exists.
Has anyone considered that RMP might be including transmission losses in their fuel factor calculation? Duke Energy here in Ohio factors in a 7.2% system loss adjustment that effectively increases the fuel cost per delivered kWh. If RMP is doing something similar, that could explain why Connie's calculations are coming up low. The $0.015/kWh difference could easily be explained by loss adjustments.
Cecilia, that's exactly what it was! I finally got the detailed calculation from RMP after filing a PSC complaint. They're applying an 8.1% system loss factor that wasn't mentioned in their simplified fuel adjustment explanation. When I factor in the transmission losses, my calculation matches their billing almost exactly. The $0.015/kWh difference works out to be right in line with an 8% loss adjustment. Thanks for the suggestion!
Great detective work Connie! System losses are one of those hidden factors that can throw off fuel cost calculations. 8.1% is pretty high compared to what I see with PSE (around 6.2%) but Utah's mountainous terrain probably contributes to higher transmission losses. This is a good reminder for all of us to ask about loss factors when auditing fuel adjustments. They're easy to overlook but can significantly impact the math.
This thread is a perfect example of why fuel adjustment audits are so challenging. Between coal compliance costs, hydro variability, purchased power, and transmission losses, there are so many variables that utilities can hide behind. Connie, did RMP explain why they don't mention the loss factor in their standard fuel adjustment documentation? Seems like something customers should know about upfront.
Susan, RMP claimed the loss factor is "embedded" in their tariff language but honestly it's buried in a footnote on page 47 of their general service schedule. Hardly transparent disclosure. I think utilities deliberately obscure these factors to make fuel adjustments harder to audit. The good news is once you know to look for system losses, it becomes much easier to verify their calculations on future audits.
Excellent work tracking down that loss factor issue Connie! This reminds me why I always request the complete fuel adjustment calculation methodology upfront, not just the summary rates. Entergy here in Louisiana has similar complexity with their fuel mix but they're generally more transparent about the various adjustment factors. Your persistence with the PSC complaint really paid off.
Outstanding work Connie! This thread perfectly illustrates why fuel adjustment audits require such detailed analysis. The 8.1% system loss factor you discovered is a significant cost component that customers have a right to understand. Too many utilities bury these critical calculation details in footnotes or refuse to disclose them altogether. Your PSC complaint approach should be a model for other auditors facing similar stonewalling tactics. Great collaboration from everyone on helping solve this puzzle!