How one state gives ratepayers more say in utility policy
Boston — The average utility customer may not understand the complexities of the public utility system, but many understand what it means to pay an electric bill larger than the monthly mortgage payment.
However, when consumers try to air their views before public utility commissions, their efforts often are too scattered to be effective. This has led to the establishment of consumer utility boards (CUB). Pioneered in Wisconsin, CUB's are the subject of legislative drives in California, Florida, Massachusetts, Missouri, and New York.
''I represent the average guy on the street who doesn't understand the rate structure but wants to know why (utility rates go up),'' says John F. Nelson, of Waukesha, Wis., an eighth-grade science teacher and a director of the state CUB.
State public utility commissions, which regulate the utility monopolies, typically hear from well-prepared, high-powered attorneys and rate analysts, who represent utilities and commercial ratepayers during commission proceedings. By comparison, consumers have been represented by a vocal, but often emotional, few at hearings.
''The commissions really have less patience for someone who comes in with unfocused complaints. These are long, bitterly fought cases . . . the last thing they need is people complaining about the price of hamburger going up,'' explains Charles Gray, assistant general counsel with the National Association of Regulatory Utility Commissioners. So CUBs can, with enough funding, hire high-powered specialists answering directly to consumers, and in turn command more respect at public utility hearings.
Because the CUB are authorized by the state legislature, it can call and cross-examine witnesses, and present testimony as an official representative of the ratepayer. This gives it equal footing with utilities and commercial ratepayers.
One Wisconsin electric utility official says the CUB is the first consistently united and ''responsible'' intervention he has seen on behalf of consumers in regulatory proceedings.
Organized in 1980, the Ralph Nader-inspired concept was authorized by the Wisconsin legislature in response to consumer unrest. The group's more than 66, 000 members each pay a minimum dues of $3 annually, explains CUB staff member Michele Radosevich. The state requires utilities to let the group solicit membership and send announcements through inserts in utility bill mailings.
The group claims that in one of the more than 20 cases it intervened in last year, its influence helped save ratepayers $43 million when the Public Service Commissioners held one utility's rate of return for stockholders to 143/4 percent, rather than granting the 16 percent requested.
Wisconsin commissioners and utility officials, however, say it's impossible to quantify the CUB's influence. But they admit that it's a positive force for the consumer.
Still, the CUB concept has critics. Some utility officials and commissioners in Wisconsin, California, and Massachusetts raise these objections:
* CUBs would increase already lengthy commission proceedings, thus increasing costs to ratepayers.
* A utility should not be required to provide a forum -- its own bill mailings -- for an adversary.
* Funds generated for CUBs would be better used by funneling them to agencies already charged with protecting ratepayers, like attorney general offices or existing consumer groups. (Wisconsin, like many other states, does not have an agency charged with representing the consumer in utility cases.)
But supporters say that as independent, ratepayer-supported groups, CUBs aren't subject to political swings that may affect the emphasis state agencies may put on pursuing certain cases. They also say a CUB couldn't exist unless ratepayers -- the sole means of support for such a group -- want one.
Although some utilities initially objected to the Wisconsin CUB, the Wisconsin Electric Power Company (WEPCO) supports the group and even urges consumers to join. A WEPCO spokesman says officials are happy to see CUB efforts , which include effective weatherization and conservation promotion. Officals also say they like to see ratepayers practice ''responsible'' consumerism.