This opinion is subject to revision before final

publication in the Pacific Reporter

2019 UT 26

IN THE

SUPREME COURT OF THE STATE OF UTAH

UTAH OFFICE OF CONSUMER SERVICES and UTAH ASSOCIATION OF 

ENERGY USERS,

Petitioners,

v.

PUBLIC SERVICE COMMISSION OF UTAH, UTAH DIVISION OF PUBLIC 

UTILITIES, and PACIFICORP D/B/A ROCKY MOUNTAIN POWER,

Respondents.

No. 20170364

Filed June 27, 2019

On Petition for Review of Agency Decisions

Attorneys:

Robert J. Moore, Asst. Att’y Gen., Steven W. Snarr, Special Asst. 

Att’y Gen., Salt Lake City, for petitioner Utah Office of Consumer 

Services

Gary A. Dodge, Phillip J. Russell, Salt Lake City, for petitioner Utah 

Association of Energy Users

Melanie A. Reif, Salt Lake City, for respondent Public Service 

Commission of Utah

Sean D. Reyes, Att’y Gen., Brent A. Burnett, Asst. Solic. Gen., Patricia 

E. Schmid, Asst. Att’y Gen., Justin C. Jetter, Asst. Att’y Gen., Salt 

Lake City for respondent Utah Division of Public Utilities

R. Jeff Richards, Yvonne R. Hogle, D. Matthew Moscon, Bret W. 

Reich, Salt Lake City, for respondent PacifiCorp d/b/a Rocky 

Mountain Power

Jenniffer Nelson Clark, Cameron L. Sabin, Salt Lake City, for amicus 

curiae Questar Gas Company d/b/a Dominion Energy Utah

ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court, in 

which CHIEF JUSTICE DURRANT, JUSTICE HIMONAS, JUSTICE PEARCE, 

and JUSTICE PETERSEN joined.
UTAH OFFICE OF CONSUMER SERVICES v. PUBLIC SERVICE COMMISSION 

OF UTAH

Opinion of the Court

2

ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:

¶1 The Utah Office of Consumer Services and the Utah 

Association of Energy Users (“Consumer Groups”) challenge orders 

from the Public Service Commission in two related cases. We 

consolidated these cases because they raise the same threshold legal 

question—whether the Commission has the authority to impose 

“interim” rates as an element of the energy balancing account 

procedures described in Utah Code section 54-7-13.5. We hold that 

the Commission lacks this authority. 

¶2 The interim rates at issue were imposed without a 

requirement that the public utility prove by “substantial evidence” 

that the costs incorporated in the rates were “prudently incurred” or 

“just and reasonable.” We hold that this runs afoul of the controlling 

standard set forth in Utah Code section 54-7-13.5(2)(e)(ii). And we set 

aside the Commission’s orders on this basis. 

I

¶3 The Public Service Commission is authorized by statute to 

“supervise and regulate every public utility in this state.” UTAH 

CODE § 54-4-1. One of the utilities regulated by the Commission is 

PacifiCorp, d/b/a Rocky Mountain Power, an electric power 

provider. PacifiCorp’s rates are set by the Commission under terms 

and conditions set forth in the Utah code. A threshold step in the rate 

setting process is a “general rate” case. 

¶4 In a general rate case the Commission estimates what it will 

cost PacifiCorp to provide electricity to customers. That estimate 

becomes the utility’s “base rate.” See id. § 54-7-12(1)(a)(i). Included in 

the base rate is a projected estimate of PacifiCorp’s net power costs. 

In any given year, however, actual net power costs will vary from 

the costs predicted in a general rate case. With that in mind, the 

legislature created a mechanism to account for these differences—the 

“energy balancing account,” or EBA. See id. § 54-7-13.5. 

¶5 An EBA is an account used to track PacifiCorp’s incurred net 

power costs. The account must be authorized by the Commission. It 

“become[s] effective” upon a finding that it is “(i) in the public 

interest; (ii) for prudently-incurred costs; and (iii) implemented at 

the conclusion of a general rate case.” Id. § 54-7-13.5(2)(b). Once an 

EBA is approved, PacifiCorp is authorized to track the costs

identified in that account. Such EBA costs include fuel, purchased 

power, and wheeling expenses—“less wholesale revenues.” Id.

§ 54-7-13.5(1)(b).
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Opinion of the Court

3

¶6 PacifiCorp must annually file “a reconciliation of the energy 

balancing account with the [C]ommission” seeking either a recovery 

from or a refund to customers—based on the difference between the 

estimated net power costs reflected in the base rate and PacifiCorp’s 

actual net power costs incurred that year. Id. § 54-7-13.5(2)(c). 

PacifiCorp bears the burden of proving that its costs are “prudently 

incurred.” Id. § 54-7-13.5(2)(d). This annual filing is subject to review 

by the Division of Public Utilities. The Division conducts an audit 

and submits a report to the Commission. And the report is used by 

the Commission to determine whether a refund or recovery is 

appropriate. This process is repeated annually until a new base rate 

is set in a new general rate case. 

¶7 PacifiCorp’s rates have been established in accordance with 

the above procedures. In 2009, PacifiCorp filed an application for 

approval of a proposed EBA in accordance with the newly-passed 

EBA statute—Utah Code section 54-7-13.5. The Commission opened 

a docket to review the filing. Two years later, the Commission 

approved the EBA and ordered the implementation of a four-year 

EBA pilot program. The Commission asked the Division to file 

periodic reports evaluating the program. The Commission also 

sanctioned the use of an “interim rate” procedure as part of the EBA 

process. Under that process, PacifiCorp would file its annual EBA 

report comparing estimated power costs with its actual power costs. 

PacifiCorp would propose an interim rate based on the difference 

between estimated and actual costs. The Division would then review 

PacifiCorp’s report and determine whether it departed from prior 

years’ filings. If not, the Division would recommend that the 

Commission approve PacifiCorp’s proposed interim rate. The 

Commission would review the Division’s recommendation and hold 

a hearing. If an interim rate was approved by the Commission, the 

interim rate would go into effect while the Division completed its 

full audit of PacifiCorp’s EBA report to determine if PacifiCorp’s 

claimed costs were prudently incurred. 

¶8 On August 30, 2012, the Commission issued an order 

eliminating the EBA interim rate process. The Commission indicated 

that it had failed to consider what costs associated with PacifiCorp’s

financial swap transactions1 qualified for recovery under the EBA 

_____________________________________________________________

1 Swap transactions are “financial transaction[s] between two 

parties . . . in which payments or rates are exchanged over a specified 

(continued . . .)
UTAH OFFICE OF CONSUMER SERVICES v. PUBLIC SERVICE COMMISSION 

OF UTAH

Opinion of the Court

4

when it initially approved the interim rate process. In the 

Commission’s view, a determination of what costs could be 

recovered for these swap transactions would require a significant 

amount of time and likely would result in highly contentious 

litigation in both the interim and final EBA hearings. So the 

Commission decided that an interim rate process was no longer 

appropriate for the EBA mechanism. 

¶9 The Division filed its first report evaluating the EBA 

program in May 2014. The Division noted that it had been required 

to devote significant time to review PacifiCorp’s filings due to the 

complexity of the EBA process. And it recommended some 

structural changes. The Commission, however, determined that it 

was too early to make any changes to the EBA program. 

¶10 The Division filed its final report two years later. It 

recommended that “[t]he time period for [its] audits . . . be extended 

to one year and interim rates . . . be established until the Division can 

complete its audit.” On February 16, 2017, the Commission issued an 

order adopting the Division’s recommendation that interim rates be 

reinstated in the EBA mechanism. In so concluding, the Commission 

reasoned that circumstances had changed since its August 30, 2012 

order rejecting interim rates. Specifically, the Commission asserted 

that the contentious issues and litigation surrounding PacifiCorp’s 

swap transactions had been resolved. And for that reason the 

Commission concluded that an interim rate process was now 

appropriate. 

¶11 The Commission asserted that the interim rate subsection of 

the general rate case statute, id. § 54-7-12(4)(a), authorized it to 

establish interim rates in an EBA proceeding. And it incorporated 

the procedural and timing requirements outlined in that subsection. 

First, the Commission defined PacifiCorp’s burden of proof to be 

commensurate with the burden of proof standard established in 

subsection 54-7-12(4)(a)(iii). See id. § 54-7-12(4)(a)(iii) (stating that a 

utility “shall establish an adequate prima facie showing that the 

 

period and according to specified conditions.” Swap, BLACK’S LAW 

DICTIONARY (11th ed. 2019). PacifiCorp uses swap transactions to 

hedge market-price risk, particularly for the market price of natural 

gas. A natural gas swap is a contract that gives PacifiCorp the right 

to buy or sell a specified amount of natural gas at a specific price 

within a specific timeframe in exchange for an upfront premium. 
Cite as: 2019 UT 26

Opinion of the Court

5

interim rate increase or decrease is justified”). The Commission 

asked the Division to review PacifiCorp’s EBA filing and determine 

whether the filing “appears to not depart from prior years’ filings.”

PacifiCorp would eventually have to prove by substantial evidence 

that its claimed costs were prudently incurred. But a lower standard 

was appropriate in the interim in the Commission’s view. Second, 

the Commission determined that it would act upon a request for 

interim rates within 45 days of PacifiCorp’s EBA filing. See id.

§ 54-7-12(4)(a)(ii). 

¶12 The Commission found further justification for these 

decisions in our case law. It noted that in Questar Gas Co. v. Utah 

Public Service Commission, 2001 UT 93, 34 P.3d 218, we recognized the 

Commission’s “authority to authorize interim rates in the Questar 

Gas 191 balancing account mechanism.” And it reasoned that 

“PacifiCorp’s EBA is in some ways similar to Account 191.” Drawing 

on these similarities, the Commission determined that Questar Gas

supported its decision to allow interim rates and adopt the 

procedures described in subsection 54-7-12(4)(a). 

¶13 The Consumer Groups filed a petition for reconsideration 

and rehearing challenging the legality of the decision to incorporate

an interim rate process in the EBA mechanism. The Consumer

Groups asserted that subsection 54-7-12(4)(a)(ii) could not be applied 

outside of a general rate case, and insisted that the interim rate 

procedures described in subsection (4)(a) run afoul of section 

54-7-13.5 by altering the standard for cost recovery and PacifiCorp’s 

burden of proof. See UTAH CODE § 54-7-13.5(2)(e) (“An energy 

balancing account may not alter: (i) the standard for cost recovery; or 

(ii) the electrical corporation’s burden of proof.”). The Commission 

rejected the Consumer Groups’ petition. And the petition to this 

court in Case No. 20170364 followed. 

¶14 About a year later, PacifiCorp submitted its 2018 EBA filing. 

That filing differed in one significant way from PacifiCorp’s 2017 

filing: It proposed to recover EBA costs in the amount of 

approximately $2.8 million on an interim basis. The Division 

reviewed PacifiCorp’s filing and determined that it appeared not to 

depart from the prior years’ filings. And on that basis the Division 

recommended that PacifiCorp be allowed to recover its claimed EBA 

costs. The Commission agreed. It issued an order on April 27, 2018 

imposing interim rates. The Consumer Groups filed a petition for 

reconsideration. They raised the same arguments that they made 

when challenging the Commission’s February 16, 2017 order 

approving an interim rate procedure. The Commission rejected the 
UTAH OFFICE OF CONSUMER SERVICES v. PUBLIC SERVICE COMMISSION 

OF UTAH

Opinion of the Court

6

Consumer Groups’ petition. And the petition in Case No. 20180536 

followed. Since the Commission’s April 27, 2018 order, customers

have been paying PacifiCorp the disputed rates. 

II

¶15 The Consumer Groups challenge the Commission’s interim 

rate orders on two grounds. They first contend that the Commission 

lacks the authority to interject interim rates in the EBA mechanism. 

Second, they assert that the Commission’s orders mark a departure

from prior practice in violation of the Utah Administrative 

Procedures Act (“UAPA”). We agree with the Consumer Groups’ 

first argument. Specifically, we conclude that the Commission

violated the statutory mandate that an EBA “may not alter . . . the 

electrical corporation’s burden of proof.” UTAH CODE

§ 54-7-13.5(2)(e). And we set aside the Commission’s orders on that 

basis (without reaching the question whether the Commission acted 

inconsistently with prior practice in violation of UAPA). 

¶16 Before expounding on the basis for our decision we first

address statutory standing questions raised by the Division and the 

Commission. Those questions arise under a statutory requirement 

that parties challenging an order of the Commission demonstrate 

that they have been “substantially prejudiced” by the Commission’s

orders. Id. § 63G-4-403(4). The Division and the Commission assert

that the Consumer Groups fail to carry this burden. We disagree for 

reasons set forth below. 

A

¶17 The UAPA governs claims asserted against an agency. UTAH 

CODE § 63G-4-105(1) (“The procedures for agency action, agency 

review, and judicial review contained in this chapter are applicable 

to all agency adjudicative proceedings commenced by or before an 

agency on or after January 1, 1988.”). Before a court may grant relief 

under the UAPA, it must determine that the “person seeking judicial 

review has been substantially prejudiced.” Id. § 63G-4-403(4). “A

party has been substantially prejudiced if ‘the alleged error was not 

harmless.’” Utah Chapter of the Sierra Club v. Utah Air Quality Bd., 

2006 UT 74, ¶ 15, 148 P.3d 960 (quoting WWC Holding Co. v. Pub.

Serv. Comm’n of Utah, 2002 UT 23, ¶ 7, 44 P.3d 714).

¶18 The Division challenges the Consumer Groups’ statutory 

standing to advance the claims set forth in the first petition. The 

Consumer Groups’ primary claim of prejudice is related to the 

imposition of interim rates. But those rates did not go into effect 
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Opinion of the Court

7

until after the Consumer Groups filed their first petition. So the 

Division asserts that the Consumer Groups’ first petition should be 

dismissed for failure to demonstrate substantial prejudice. 

¶19 We disagree. A party may suffer substantial prejudice even 

though the claimed injury is one not yet realized. This principle was 

key to our decision in Utah Chapter of the Sierra Club, 2006 UT 74. 

There we determined that petitioners had standing to pursue their 

claims even though their alleged injury had not yet been suffered. 

The Utah Division of Air Quality had granted a permit to the Sevier 

Power Company authorizing the construction of a coal-fired power 

plant. Id. ¶ 1. Although the power plant had not yet been built, we 

noted that the plant presented a serious danger of future pollution. 

Id. ¶ 22. And we explained that that pollution would jeopardize the 

petitioners’ health, the value of their land, and their enjoyment of the 

surrounding ecosystem. Id. We accordingly concluded that 

petitioners had standing to challenge the Utah Air Quality Board’s 

decision. 

¶20 We reach a similar conclusion here. We hold that the 

Consumer Groups’ first petition clears the threshold hurdle of 

demonstrating substantial prejudice. The Consumer Groups’ alleged 

prejudice was sufficiently imminent when the Commission decided 

to reinstate interim rates. The Commission would not have 

reinstated interim rates if PacifiCorp had no intention of recovering 

costs on an interim basis. PacifiCorp and the Division recommended 

that the Commission adopt an interim rate procedure so PacifiCorp 

could recover its EBA costs while the Division finished its audit. The 

prospect that the Consumer Groups would end up paying an interim 

rate surcharge was more than hypothetical. The facts of these 

consolidated cases demonstrate as much. We thus conclude that we 

can consider the merits of the Consumer Groups’ first petition.

¶21 The Commission also challenges the Consumer Groups’ 

statutory standing to advance the claims set forth in the second 

petition. In the Commission’s view, the Consumer Groups are 

estopped from asserting that they have suffered substantial

prejudice from the Commission’s order requiring customers to pay 

$2.8 million on an interim basis. And because the Consumer Groups 

are foreclosed from claiming that they have been substantially 

prejudiced, the Commission asks us to dismiss the Consumer

Groups’ second petition on statutory standing grounds. We disagree 

with the premise of this argument. We do not think that the 

Consumer Groups are estopped from arguing substantial prejudice. 
UTAH OFFICE OF CONSUMER SERVICES v. PUBLIC SERVICE COMMISSION 

OF UTAH

Opinion of the Court

8

And we believe that they have satisfied their burden of 

demonstrating such prejudice. 

¶22 The alleged error here is that the Commission erroneously 

interjected an interim rate procedure into the EBA mechanism. And 

the claimed prejudice stemming from this error is that customers are 

being forced to pay $2.8 million in increased rates prematurely. The 

alleged error has thus harmed customers. 

¶23 The Commission asks us to recognize that the Consumer

Groups brought this harm upon themselves. It concedes that 

customers are currently paying a surcharge to cover $2.8 million of 

PacifiCorp’s claimed net power costs. But it argues that the 

Consumer Groups stipulated to these costs. And in the 

Commission’s view that stipulation bars the Consumer Groups from 

claiming prejudice. 

¶24 In 2015, the Consumer Groups reached a settlement 

agreement with PacifiCorp over costs related to the closure of the 

Deer Creek Mine. As part of that settlement, the Consumer Groups 

agreed that the Commission “should enter an order authorizing” 

PacifiCorp to recover certain costs associated with its “unrecovered 

investment in the Deer Creek Mine.” Had the Consumer Groups not 

stipulated to these costs, customers would have received a surcredit 

under PacifiCorp’s 2018 EBA filing. So, the Commission contends, 

the Consumer Groups cannot claim substantial prejudice when, 

setting aside costs to which they agreed, the interim EBA recovery 

would have benefited customers. 

¶25 We disagree with the notion that the Consumer Groups’

stipulation negates their claim of substantial prejudice. While the 

Consumer Groups stipulated to PacifiCorp recovering certain costs, 

they did not stipulate to recovery through interim rates.2 And the 

Commission’s approval of interim rates serves as the basis for the 

Consumer Groups’ claim of prejudice. Because customers are being 

forced to pay interim rates, the Consumer Groups assert that 

_____________________________________________________________

2 See Prinsburg State Bank v. Abundo, 2012 UT 94, ¶ 13, 296 P.3d 

709 (“[A] stipulation entered into by the parties and accepted by the 

court ‘acts as an estoppel upon the parties thereto and is conclusive 

of all matters necessarily included in the stipulation.’” (emphasis added) 

(quoting Yeargin, Inc. v. Auditing Div. of Utah State Tax Comm’n, 2001 

UT 11, ¶ 20, 20 P.3d 287)).
Cite as: 2019 UT 26

Opinion of the Court

9

customers are losing out on potential interest they could otherwise 

earn in the time between paying the interim rates and the true up at 

the conclusion of the EBA process. This injury is alone sufficient to 

satisfy the Consumer Groups’ burden of demonstrating substantial 

prejudice. 

¶26 The fact that the Consumer Groups represent customers

whose individual injuries are relatively small does not undermine 

this conclusion. The Utah Office of Consumer Services (“UOCS”) is a 

government agency specifically tasked with “assess[ing] the impact 

of utility rate changes . . . on: (i) residential consumers; and (ii) small 

commercial consumers.” UTAH CODE § 54-10a-301(1)(a). It is 

authorized to “commence an original proceeding, file a complaint, 

appear as a party, appeal, or otherwise represent residential 

consumers or small commercial consumers in a matter or a 

proceeding involving regulation of an applicable public utility.” Id.

§ 54-10a-301(2)(b)(i). The Utah Association of Energy Users (“UAE”)

is a non-profit organization that similarly represents the interests of 

customers before the Commission. UTAH ASS’N OF ENERGY USERS, 

About, https://www.utahenergyusers.org/about-1 (last visited June 

11, 2019). Its members include large industrial and commercial 

companies. The harm suffered by the individual customers

represented by UOCS and UAE is relatively small considering that 

the $2.8 million in interim rates is spread out across PacifiCorp’s

nearly one million Utah customers. ROCKY MOUNTAIN POWER, Quick 

Facts, https://www.rockymountainpower.net/about/cf/qf.html

(last visited June 11, 2019). But UOCS is statutorily authorized to

represent all residential or small commercial consumers before the 

Commission. UTAH CODE § 54-10a-301(1)(a), (2)(a)–(b). And the 

customers composing UAE are large corporations, each of which 

could satisfy the burden of demonstrating substantial prejudice. See 

Utah Chapter of the Sierra Club, 2006 UT 74, ¶ 21 (“An association 

. . . has standing if its individual members have standing and the 

participation of the individual members is not necessary to the 

resolution of the case.”). All of this is to say that the Consumer

Groups have suffered substantial prejudice from the Commission’s

orders interjecting interim rates into the EBA mechanism. We 

therefore conclude that the Consumer Groups have standing. And 

we accordingly proceed to the merits of their petitions. 

B

¶27 The Consumer Groups contend that the Commission

“erroneously interpreted or applied” Utah law when it interjected an 

interim rate process into the EBA mechanism. See UTAH CODE § 
UTAH OFFICE OF CONSUMER SERVICES v. PUBLIC SERVICE COMMISSION 

OF UTAH

Opinion of the Court

10

63G-4-403(4)(d). We agree and thus set aside the Commission’s 

orders. We expound on this holding below. First we review and 

reject the Commission’s proffered justifications for its orders. Then

we explain how the Commission’s orders altered PacifiCorp’s 

burden of proof in violation of Utah Code section 54-7-13.5(2)(e)(ii). 

1

¶28 When reviewing an agency action, “the appropriate 

standard of review . . . depend[s] on the type of action in question . . . 

and whether it can be characterized as a question of law, a question 

of fact, or a mixed question of law and fact.” Murray v. Utah Labor 

Comm’n, 2013 UT 38, ¶ 22, 308 P.3d 461. Here we are faced with a 

question of law—whether the Commission has the authority to 

impose interim rates as part of the EBA process. And we review such 

questions for correctness, according no deference to the agency’s 

determination. Hughes Gen. Contractors, Inc. v. Utah Labor Comm’n, 

2014 UT 3, ¶ 6, 322 P.3d 712.

¶29 The Commission cited Utah Code section 54-7-12(4)(a)(ii) as 

the basis for its authority to impose interim rates through the EBA 

mechanism. That subsection states as follows:

The commission, on its own initiative or in response to 

an application by a public utility or other party, may, 

after a hearing, allow any rate increase or decrease 

proposed by a public utility, or a reasonable part of the 

rate increase or decrease, to take effect on an interim 

basis within 45 days after the day on which the request 

is filed, subject to the commission’s right to order a 

refund or surcharge.

UTAH CODE § 54-7-12(4)(a)(ii). The Commission acknowledged that 

this provision is surrounded by subsections referring to a general 

rate case and not the EBA mechanism. But it also emphasized that 

subsection (4)(a)(ii) itself makes no explicit reference to a general rate 

case. And on that basis it concluded that the “plain language” of 

“54-7-12(4)(a)(ii) authorizes [it] to establish interim rates in an EBA 

cost-recovery proceeding.” 

¶30 This is an erroneous reading of the statute. When 

interpreting a statute, our goal is to give effect to the words enacted 

into law by the legislature. See Olsen v. Eagle Mountain City, 2011 UT 

10, ¶ 9, 248 P.3d 465. We do not, however, read statutory text in 

isolation. Monarrez v. Utah Dep’t of Transp., 2016 UT 10, ¶ 11, 368 P.3d 

846. We must read it in context, taking into consideration 
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Opinion of the Court

11

surrounding terms and associated provisions. Olsen, 2011 UT 10, 

¶ 12. And when subsection (4)(a)(ii) is read in context it becomes 

obvious that it is meant to apply only to general rate cases. 

¶31 The provisions surrounding subsection (4)(a)(ii) clearly 

speak to the imposition of interim rates in a general rate case—or, in 

other words, authorizing a new base rate on an interim basis. The 

Commission concedes as much. But it fails to recognize the 

significance of this concession. Once subsection (4)(a)(ii) is read in 

conjunction with subsections (4)(a)(i) and (4)(a)(iii), it becomes clear

that subsection (4)(a)(ii) authorizes the imposition of interim rates 

only in a general rate case and not in an EBA proceeding. 

¶32 All of subsection (4)’s provisions are interrelated and speak 

to imposing interim rates in a general rate case. Subsection (4)(a)(i) 

states that “[a] request for interim rates shall be made within 90 days 

after the day on which a public utility files a complete filing for a 

general rate increase or a general rate decrease.” UTAH CODE

§ 54-7-12(4)(a)(i) (emphasis added). And subsection (4)(a)(ii), in turn, 

says that the rate increase or decrease may “take effect on an interim 

basis within 45 days after the day on which the request is filed.” Id.

§ 54-7-12(4)(a)(ii) (emphasis added). “The request” spoken of here 

ties back to “the request” mentioned in subsection (4)(a)(i).

Subsection (4)(a)(iii) further ties together subsections (4)(a)(i) and 

(4)(a)(ii). It reduces the utility’s burden of proof when an interim 

request is made in a general rate case. It states that “[t]he evidence 

presented in the hearing held pursuant” to the terms of subsection 

(4) “need not encompass all issues that may be considered in a rate 

case hearing held pursuant to [s]ubsection (2)(d)”—the hearing 

required in a general rate case. Id. § 54-7-12(4)(a)(iii). 

¶33 This language shows that each subpart of subsection (4) is

interconnected. Importantly, it also highlights that each subpart

deals with the imposition of interim rates in a general rate case. The 

entirety of section 54-7-12 is dedicated to describing the procedures 

for a general rate case. It would be odd to isolate subsection (4)(a)(ii) 

from all of its surrounding provisions—and to conclude that the 

absence of the words “general rate” in that subsection is an 

indication that the procedures mentioned therein apply outside the 

general rate process (in an EBA proceeding). This we decline to do.

¶34 The absence of an express reference to a general rate case in 

subsection (4)(a)(ii) is accordingly inconsequential. Subsection (4) is 

clearly speaking about imposing interim rates in a general rate case.

And for this reason this provision cannot serve as the source of the 
UTAH OFFICE OF CONSUMER SERVICES v. PUBLIC SERVICE COMMISSION 

OF UTAH

Opinion of the Court

12

Commission’s authority to impose interim rates in the EBA 

mechanism.

¶35 In reaching a contrary conclusion the Commission also cited

case law from this court. It noted that in Questar Gas Co. v. Utah 

Public Service Commission, 2001 UT 93, 34 P.3d 218, we “recognized 

the [Commission’s] authority to authorize interim rates in the 

Questar Gas 191 balancing account mechanism.” And because 

“PacifiCorp’s EBA is in some ways similar” to that balancing 

account, the Commission concluded that the Questar Gas holding 

supports its decision to impose interim rates. 

¶36 We disagree. In Questar Gas we were asked to opine on the 

propriety of interim rates in the specific context of the Questar Gas 

191 balancing account. See id. ¶ 12. And there may be some 

similarities between that account and PacifiCorp’s EBA. But the

Questar Gas decision says nothing about the statutory scheme 

implicated here. Our opinion in that case does not speak to whether 

section 54-7-13.5 authorizes the imposition of interim rates in an EBA 

proceeding. That’s because the 191 balancing account was in no way 

tied to section 54-7-13.5—that provision didn’t even exist yet. So the 

191 balancing account was not implemented under section 54-7-13.5; 

it was implemented under the Commission’s “ample general power 

to fix rates and establish accounting procedures.” Id. (quoting Utah 

Dep’t of Bus. Regulation v. Pub. Serv. Comm’n of Utah, 720 P.2d 420, 423 

n.4 (Utah 1986)) (citing UTAH CODE § 54-4-1).

¶37 The Commission latches onto this language from Questar 

Gas. It says that this language—in conjunction with the favorable cite 

to Utah Code section 54-4-1—stands as an acknowledgment that the 

Commission has authority to impose interim rates in any rate 

proceeding. We disagree. The Commission certainly has broad 

authority. But that authority is not so broad as to read statutory EBA 

safeguards out of existence. 

¶38 Section 54-4-1 confers on the Commission “power and 

jurisdiction to supervise and regulate every public utility in this state 

. . . and to do all things, whether herein specifically designated or in 

addition thereto, which are necessary or convenient in the exercise of 

such power and jurisdiction.” UTAH CODE § 54-4-1. We cited this 

provision in Questar Gas as support for the proposition that the 

Commission has “ample general power to fix rates and establish 

accounting procedures.” Questar Gas, 2001 UT 93, ¶ 12 (quoting Utah 

Dep’t of Bus. Regulation, 720 P.2d at 423 n.4). Yet that “ample power”

is not without limits. Some of those limits are prescribed in the EBA 
Cite as: 2019 UT 26

Opinion of the Court

13

statute. And specific statutes (like the EBA provisions) control more

general ones (like section 54-4-1). See Lyon v. Burton, 2000 UT 19, 

¶ 17, 5 P.3d 616. So if the EBA statute prohibits the Commission from 

imposing interim rates in the manner by which it did—as the EBA 

statute does—section 54-4-1 cannot save the Commission’s orders. 

¶39 The same goes for the Commission’s reliance on section 

54-4-4.1. That section states that “[t]he [C]ommission may, by rule or 

order, adopt any method of rate regulation that is: (a) consistent with 

this title; (b) in the public interest; and (c) just and reasonable.” UTAH 

CODE § 54-4-4.1(1). This section explicitly recognizes limits on the 

Commission’s authority. And one of those limits is that any method 

of rate regulation the Commission adopts must be consistent with 

Title 54. So if Title 54 prohibits the Commission from imposing 

interim rates in the manner by which it did—as Title 54 does—then 

the Commission’s reliance on section 54-4-4.1 is to no avail. 

¶40 For all these reasons, we reject the Commission’s stated 

justifications for interjecting interim rates into the EBA mechanism. 

Having done so, we proceed to explain how the Commission’s 

orders run afoul of the EBA statute and must thus be set aside. 

2

¶41 The Commission is given broad authority to define the 

procedures and timing by which an EBA is annually reconciled. But 

that authority is not so broad as to allow the Commission to alter the 

burden of proof that PacifiCorp must carry before recovering its EBA 

costs. Yet that is exactly what the Commission did here. And we set 

aside the Commission’s orders on this basis. 

¶42 Section 54-7-13.5 merely provides the framework for 

authorizing an EBA and approving a utility’s annual EBA filing. 

Many of the details are left to the Commission. The statute, for 

instance, does not define the timing for cost recovery. It allows 

PacifiCorp to recover its actual EBA costs through a surcharge. Id. § 

54-7-13.5(2)(c)(i). And it requires PacifiCorp to “file a reconciliation 

of the energy balancing account with the commission at least 

annually” to recover these costs. Id. § 54-7-13.5(2)(c)(ii). 

¶43 The statute gives the Commission broad discretion to 

establish a mechanism by which costs are recovered. Section 

54-7-13.5 states that the method by which PacifiCorp recovers its 

EBA costs shall “be incorporated into base rates in an appropriate 

commission proceeding.” Id. § 54-7-13.5(2)(f)(ii) (emphasis added). The 

statute never fully defines what constitutes “an appropriate 

commission proceeding.” And in this sense the Commission is given 
UTAH OFFICE OF CONSUMER SERVICES v. PUBLIC SERVICE COMMISSION 

OF UTAH

Opinion of the Court

14

broad discretion to develop the mechanism of recovery. But that 

discretion is not boundless. 

¶44 Limits are placed on the Commission’s authority to 

authorize PacifiCorp to recover its EBA costs. The most relevant of 

these limits for purposes of these consolidated cases are defined in 

subsection (2)(e): “An energy balancing account may not alter: (i) the 

standard for cost recovery; or (ii) the electrical corporation’s burden 

of proof.” Id. § 54-7-13.5(2)(e). In other words, if a chosen EBA 

mechanism alters either the standard for cost recovery or 

PacifiCorp’s burden of proof, the mechanism is improper and the 

Commission has exceeded its statutory authority. 

¶45 The standard for cost recovery is statutorily defined. 

PacifiCorp may recover its costs only to the extent they are 

“prudently incurred.” Id. § 54-7-13.5(2)(d). The Commission 

acknowledges this standard. And we do not believe that it has been 

altered here. In its order reaffirming its decision to interject interim 

rates, the Commission specifically stated that “the EBA statute only 

allows for recovery of ‘[p]rudently incurred actual costs.’” So we 

cannot say that it applied the wrong standard of cost recovery. 

¶46 The Commission did, however, err in the burden of proof 

that it applied. The statute itself does not specify an applicable

burden of proof. But we have repeatedly said that a utility has the 

burden to prove that its costs are prudently incurred—or are “just 

and reasonable”—by “substantial evidence.” See Comm. of Consumer 

Servs. v. Pub. Serv. Comm’n of Utah, 2003 UT 29, ¶ 14, 75 P.3d 481; 

Utah Dep’t of Bus. Regulation v. Pub. Serv. Comm’n, 614 P.2d 1242, 1245 

(Utah 1980). And the Commission concedes that it did not require

PacifiCorp to carry a “substantial evidence” burden of proof when it 

approved the request to impose interim rates. 

¶47 The Commission seeks to justify its approach on the ground 

that the applicable burden of proof will eventually be satisfied after a 

complete audit and a final hearing. Under the EBA framework under 

review, the Commission notes that PacifiCorp will eventually be 

required to show by “substantial evidence” that its costs are 

prudently incurred. This will happen at a “true up” after a complete

audit and public hearing—at which time customers will be allowed 

to recover a surcredit if any costs incorporated in the interim rates 

are shown not to be justified by substantial evidence. See UTAH CODE

§ 54-7-13.5(2)(h)–(j). Fair enough. But that doesn’t solve the problem. 

By law PacifiCorp is allowed to recover its claimed costs through an 

interim rate only after proving by substantial evidence that its costs 
Cite as: 2019 UT 26

Opinion of the Court

15

are prudently incurred. See id. § 54-7-13.5(2)(d), (e)(ii); Comm. of 

Consumer Servs., 2003 UT 29, ¶ 14. And the interim EBA rate process 

authorizes PacifiCorp to impose rates in the absence of such a 

showing. 

¶48 We reverse on this basis. We conclude that the 

Commission’s orders unlawfully altered the burden of proof that 

PacifiCorp must satisfy before recovering its claimed EBA costs. And 

we accordingly set aside the Commission’s orders interjecting an 

interim rate procedure into the EBA process and authorizing 

PacifiCorp to recover $2.8 million on an interim basis.

III

¶49 In reversing the Public Service Commission and setting aside 

its orders we take no position on a line of policy argument presented 

by the Commission in its briefing. The Commission asserts that the 

interposition of an interim rate procedure into the EBA process

would better protect consumers in a few ways—by ensuring that 

rates are just and reasonable and decreasing the likelihood that 

either a future generation of customers would be burdened with 

costs incurred to serve customers in a prior year or that a future 

generation of customers would benefit from rate refunds to which 

prior customers were entitled. That may be. Or perhaps the 

Consumer Groups have the better of the argument on these policy 

issues; they, after all, advance a different view. But we leave these 

questions for the legislature. We decide only that the current 

statutory scheme does not condone the interim rate process as it now 

stands. And we leave it to the legislature, if it so chooses, to reopen 

the governing statutes to expressly authorize an interim rate 

procedure as an element of the EBA process.