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Energy and Utilities

Business and residential consumers in Utah enjoy some of the least expensive, most stable energy supplies in the nation, including energy from renewable sources.

As one of the most connected and tech-savvy states in the union, Utah employs first-rate telecommunications capabilities that rank it at or near the top for connectedness, technology and penetration. Well-managed, generally abundant water sources ensure the continued growth and prosperity of the state’s citizens and businesses. Energy is also major driver of Utah’s economy. According to the Utah Energy Office, more than 23,000 Utahns earn more than $1.5 billion annually from the energy sector (www.energy.utah.gov).

Highlights

  • Governor Gary Herbert’s administration has developed a major strategic energy plan to address energy independence and economic development needs.
  • Utah’s electric power and natural gas rates are among the nation’s lowest.
  • Utah has the highest broadband participation rates of any U.S. state.
  • Residents of Utah benefit from excellent telecommunications systems, including an extensive broadband network.
  • Utah is endowed with abundant natural gas resources.

Utah’s Strategic Energy Initiative

Energy is a major priority for the administration of Utah Governor Gary Herbert. He continues to support the Utah Science Technology and Research (USTAR) program, a research and technology initiative built around the state’s world-class research institutions and focused on the development of Utah energy technology (www.innovationutah.com). Governor Herbert and his administration have also created the Utah Energy Initiative, an ambitious 10-year strategic plan designed to responsibly develop the state’s abundant natural energy resources and tap its entrepreneurial talent to establish Utah at the forefront of solving the world’s energy challenges.

Additional information about Governor Herbert’s Utah Energy Initiative is available at www.utah.gov/governor/docs/10year-stragegic-energy.pdf.

Utah’s Public Service Commission

In Utah, the Public Service Commission (PSC) regulates the rates and conditions of service for electric power and natural gas provided by investorowned utilities. Local governments regulate the state’s municipal power and water companies. The commission allows telecommunications prices to be determined by market forces in densely populated areas, but regulates the rates for intrastate telecommunications services provided by the local phone companies in rural areas. The PSC also regulates water companies in cases in which the customers are not also owners of the company, or the company is not a governmental entity. Most of Utah’s water users are served by approved municipal water systems governed by water boards in their respective municipalities. The commission is comprised of a chairman and two commissioners appointed by Utah’s governor and confirmed by the Utah Senate, each for six-year terms.

Petroleum and Natural Gas

Aided by increasingly sophisticated technology and newly discovered natural resources in Central Utah and the Uintah Basin, Utah is in the midst of a surge in petroleum and natural gas production. According to the U.S. Department of Energy, Utah contains four of the nation’s 100 largest oil fields and two of its 100 largest natural gas fields.

Natural gas prices in Utah are among the lowest in the nation, aided by Utah’s abundant supply of natural gas. Historically, natural gas produced in Utah has been used for internal consumption, but in 2011, two interstate gas pipelines have been completed, linking Utah natural gas production facilities with other states.

As reported by the U.S. Department of Energy’s Energy Information Administration, pricing to Utah residential customers was $7.79 per thousand cubic feet in December 2011 for residential use, fifth lowest in the nation and well below the national average price of $9.69. Utah’s commercial price was $6.55, tied for second lowest in the nation, compared with the average national price of $8.28.

The principal supplier of natural gas in Utah is Questar Gas Company, which currently serves more than 850,000 customers in Utah and is the only operating natural gas utility regulated by the Utah PSC. Close to half of the natural gas currently used by Questar’s residential Utah customers is provided at cost-of-service pricing (Questar’s price of producing and transporting the gas) instead of market prices, because Utah’s residential rate payers have a legal right to purchase this gas at cost of service rates due to their ownership interest in some existing gas fields managed by Questar. The cost to develop and deliver this gas historically has been lower and more stable than the cost of gas purchased from either thirdparty suppliers or Questar’s parent company, Questar Inc. Utah’s growing population will require additional supplies of gas outside of the cost-of-service agreements, pushing prices slightly higher in the future. However, it is anticipated that Utah citizens will continue to enjoy lower average rates than consumers in most other U.S. states.

Electricity and Renewable Energy

Industrial electric rates in Utah’s major cities are consistently among the lowest of U.S. cities nationwide. A plentiful supply of low-cost energy has aided the state in avoiding the high prices and large spikes that have plagued many West Coast cities in recent years. According to the Utah Public Service Commission, between 85 and 90 percent of all electrical generation produced in Utah comes from clean burning coal, much of which is exported to other states.

Rocky Mountain Power (a division of PacifiCorp) is the largest electric utility in the state. Additionally, 41 municipalities in Utah provide electric power to their residents (publicutilities.utah.gov/map.html). Currently, 11 other retail providers of electricity are certified and regulated by the state’s Public Service Commission: nine rural cooperatives, one electric service district and one investor-owned utility. Rocky Mountain Power anticipates that sales growth in urban regions of Utah will rise by about 3.5 percent annually for 2012, and will grow for the foreseeable future.

According to the U.S. Department of Energy’s Energy Information Administration, in January 2012 Utah’s combined price for electricity, 6.48 cents per kilowatt hour, was second lowest in the U.S., compared with a national rate of 9.55. The state’s price for industrial electricity was 9.25 for residential electricity costs, 11th lowest in the U.S., compared with 11.43 nationally. For commercial, the rate was 7.35, sixth lowest among the states, compared with an average national rate of 9.88. At 5.11, the state’s industrial rate was the seventh lowest, compared with a national rate of 6.50. For more information, visit the U.S. Energy Information Administration at www.eia.com.

The state has undertaken a number of proactive projects to increase the energy generated by renewable sources. For information about Utah’s renewable energy programs, including federal and state incentives, visit the Utah Energy Office at www.energy.utah.gov/renewable_energy. Additional information about a variety of renewable energy programs in Utah can be found at the website of the non-profit organization Utah Clean Energy, www.utahcleanenergy.org.

Notably, several major wind turbine facilities are now in operation in Utah. The two largest include:

  • 18.9-megawatt Wind Park II facility in Utah County.
  • 307.5-megawatt Milford Wind Corridor project in Millard and Beaver counties, which has the capacity to power approximately 65,000 homes annually with clean, renewable energy. The national award-winning facility exports energy to Southern California. Two additional planned phases will generate an estimated 600 megawatts of power annually.

Core Goals of the Utah Strategic Energy Initiative

  1. Meet the projected energy growth demands over the next decade by making balanced use of fossil fuels and alternatives and renewable resources in a market-driven, cost effective, and environmentally responsible way.
  2. Ensure Utah’s continued economic development through access to our own clean and low-cost energy resources.
  3. Develop the best new cutting-edge technologies, particularly those that enable us to utilize precious natural resources with an elevated environmental consciousness, and deploy them in Utah, the nation, and the world.
  4. Create new and support existing energy related manufacturing opportunities and jobs in Utah.
  5. Modernize the regulatory environment to support sustainable power generation, energy transmission solutions and energy conservation.
  6. Promote energy efficiency, conservation and peak consumption reductions.
  7. Facilitate the expansion of responsible development of Utah’s energy resources, including traditional, alternative and renewable sources.
  8. Pursue opportunities for Utah to export fuels, electricity and technologies to regional and global markets.
  9. Enhance and further integrate partnerships between industry, universities, state government and local communities—especially those in energy-rich rural communities-to address future energy challenges and opportunities.
  10. Collaborate with other western regional states to present a strong and unified voice to federal regulatory agencies on energy and public land issues.

Public Water Supply

One crucial Utah natural resource is the high-quality groundwater available throughout most of the state. Virtually all of Utah’s municipal waterworks systems have access to springs and wells. Although Utah is located in an arid region, the mountain watershed areas, which feed the state’s natural and man-made storage systems, receive up to 60 inches of precipitation annually. The yield from the Utah watershed, combined with yield from rivers flowing throughout the state, supply water to meet the needs of an expanding population and economy. Utah’s water is supplied to users by a number of improvement districts, water districts and local communities— most of which are not controlled by the Public Service Commission. For additional information, visit the Utah Division of Water Resources at http://naturalresources.utah.gov/divisions/water resources.html, and the Utah Public Service Commission at www.psc.utah.gov.

Communications Infrastructure

Utah is home to more than 50 unique communications companies providing cutting-edge services on both business and residential fronts. On the more “urban” Wasatch Front, a variety of providers service most areas, providing robust service and price competition. In the more “rural” areas of the state, independent telecom companies provide services that are upto- par and in some cases better than their more-urban counterparts. One reason Utah is so well connected is because of the unique system of publicprivate partnerships and trade agreements formed through efforts led by the Utah Department of Transportation and the Utah Education Network.

Utah has become the fiber optics hub in the Western United States, because of its numerous Internet backbone connection points. Utah communications companies continue to invest in the state in order to offer the latest voice, data and wireless services. For example, the two largest communications service providers in the state, CenturyLink and Comcast, have invested more than $1 billion building Utah telecommunications infrastructure over the past decade. Other prominent providers, such as AT&T, Verizon, CentraCom Interactive, Strata, and new-comer, Syringa have also made significant investments in building out and upgrading their networks.

Many private providers and state-led broadband efforts have recently been bolstered by federal grants to fund major broadband build-outs to previously underserved cities, schools, and tribal lands in the State. One prominent example is the Utah Telecommunication Open Infrastructure Agency (UTOPIA). UTOPIA is one of the nation’s largest fiber optic networks and consists of 16 Utah communities that have joined to offer high- bandwidth services to their residents and businesses.

Utah rural telecom companies have been proactive in providing advanced technology services to the rural areas they serve. According to a 2011 survey conducted by Utah State University, no urban/rural gap exists in demand for broadband services in the state. This finding is particularly significant considering the common notion that rural demand for broadband services is normally much lower than urban demand for such services. For more information about Utah’s telecommunications industry and providers, visit the PSC’s website at www.psc.utah.gov or the Utah Broadband Project at www.utah.gov/broadband.

Utah Broadband Project

The Utah Broadband Project, a joint effort between the Governor’s Office of Economic Development, the Public Service Commission, and the Department of Technology Services’ Automated Geographic Reference Center, has created an interactive map of available broadband services, and is developing a plan to increase broadband adoption and deployment throughout Utah, working with the Utah Broadband Advisory Council. According to a recent study, complied using 2010 Census data, 80 percent of the state’s residents use broadband, ranking Utah number one in the nation. Utah was also ranked number four in the nation for broadband speeds, earning the top ranking of all western states. For additional information, visit http://utah.gov/broadband.

Relay Services

Utah is at the forefront of efforts to ensure that all citizens have access to high-quality telecommunications services. Legislation passed in 2007 makes relay services and equipment available to those with hearing loss and other disabilities. This includes distribution of assistive telecommunication devices such as amplified telephones, captioned telephones and text telephones to people who meet the program’s financial guidelines. As a result of new technology developments, the choices continue to expand for people unable to use a standard telephone. The communications market now includes Video Relay Services (VRS), Internet Protocol Relay (IP Relay), captioned telephones in addition to the improvements to equipment such as amplified telephones and text telephones. Equipment manufacturers including global VRS leader, Utah-based Sorenson Communications, have improved picture quality, amplification and sound quality for hard-of-hearing users, and added such features as captions for the deaf. For additional information about relay services for the deaf and hard of hearing, visit the Utah Public Service Commission at www.psc.utah.gov.