We think we'll be able to demonstrate convincingly that other states aren't subsidizing fast-growth states, specifically Utah. These plants are system-wide resources that provide a benefit to the entire PacifiCorp system in terms of reliability and voltage support.
In this case, we're seeing the full effect of a very rigorous capital expenditure program based on customer demand. Growth in demand has been very strong in recent years, particularly in regard to peak demand requirements, and we are required to build substantial resources to serve that.
It pretty much doubles our capacity to deliver energy into the neighborhoods there.
Return on equity is not a guaranteed rate of return. In fact, the company since 1998 hasn't earned anywhere near its authorized rate of return.
We've been building quite a program of substations up and down the Wasatch Front. The last couple of years we have built 17 substations across the Wasatch Front.
We couldn't find a willing seller around the existing substation.
We kind of have to go where the growth is.
The growth that the state is experiencing requires us to pursue increased investment. Given our obligation to serve, there isn't another option. Electric rates are still an excellent value and will remain so even if the company gets the full effect of the increase. Rates on average will still be lower than they were 20 years ago.
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