AI-generated summary, reviewed by Better Utah staff.

Under current law, electric utilities in Utah can pass through 100% of their actual power costs — like fuel and purchased electricity — to customers, even when those costs exceed what was originally projected. This bill changes that by requiring the Public Service Commission to set an "energy cost baseline" (a forecast of expected power costs) during rate cases, and then splitting any difference between that forecast and actual costs: starting in 2026, electric utilities can only recover 80% of costs that exceed the baseline from customers, and must return 80% of any savings to customers when costs come in below the baseline. Costs incurred before January 1, 2026 are still eligible for full 100% recovery under the old rules. Utah electricity customers stand to benefit when power costs run low — getting back 80% of any savings — but are also somewhat shielded from large cost overruns, since utilities must now absorb 20% of any excess.