CUBs help hold lid on utility bills
Boston — It will cost a whopping $72 for a technician to come out and hook up a single residential phone if the Chesapeake & Potomac Telephone Company wins its latest rate-hike application before the District of Columbia Public Service Commission.
The current charge: $9.
In southern California, telephone service charges could soon double. In Massachusetts, there are predictions that they could jump 300 to 500 percent over the next few years as a result of the federally ordered breakup of American Telephone & Telegraph.
''We are going to see real telephone rate shock,'' nationally known consumer activist Ralph Nader predicts.
Be they telephone rates or those of electric and gas companies, however, the public could stand a greater chance of holding them down if advocates of consumer utility boards (CUBs) have their way.
CUBs are nongovernmental, nonprofit, usually statewide organizations designed to represent residential ratepayers in hearings before public utility commissions. They are democratically run and solicit contributions from the general public.
Their broadly based financial support, the argument goes, enables CUBs to hire technical experts to counter those of the highly organized utilities at rate hearings. In Massachusetts last year utilities spent an estimated $2.3 million arguing for rate increases before the state Department of Public Utilities - the kind of expense that, consumer advocates say, is ultimately passed along to ratepayers along with whatever increases are granted.
By default, organizations like Fair Share and state public-interest research groups (PIRGs) appoint themselves to represent consumers in utility rate cases.
Operating on limited resources, however, these groups often fail to persuade state rate-setting commissions not to grant increases when, say, an electric utility suffers huge losses because of a nuclear power plant shutdown. Citizens acting alone, in turn, are even more ill-equipped to argue against rate hikes.
That, advocates say, is where CUBs come in.
Wisconsin already has a CUB, and bills to establish others are pending in the Pennsylvania, New York, Massachusetts, Maryland, Colorado, and Wyoming legislatures, according to utility industry sources. The California Public Service Commission recently yielded to consumer-interest group pressure and ordered the San Diego Gas & Electric Company to allow mailings for a regional CUB to go out with its monthly bills. And last year Chicago voters approved a nonbinding resolution to establish a citywide CUB.
A proposed CUB in Missouri, however, lost by nearly 300,000 votes in a state-wide referendum last November - largely because, election officials say, it lost the support of organized labor. The CUB board would have barred all utility company employees and their family members from joining.
Since its founding in 1980, the Wisconsin CUB has attracted more than 65,000 members at contributions ranging from $3 to $15 a year. Operating on an annual budget of $400,000, it has intervened in 40 cases and claims to have saved the public $90 million in rate-increase applications.
The cost of an individual membership in the Massachusetts CUB would be $5.20 a year, according to Mindy Lubber, program director of MassPIRG. The organization brought Mr. Nader to Boston last week to help lobby for the CUB bill.
''The beauty of CUBs is that they have built-in sunset provisions,'' Ms. Lubber says. ''If they don't do the job, people just won't support them the next time around.''
Nader says CUBs answer the need for consumer advocates outside government as well as inside - where state attorneys general have long claimed to safeguard the public interest. To suggest that both types of advocates use the same approach, he says, is like ''comparing apples and oranges.''
Nader does not foresee the day when CUBs become as powerful as the utility industry is perceived to be today, however.
''My concern is just the opposite - that consumer groups become more conservative,'' Nader claims, ''because they basically just want good service.''
Says Tom Scott, founder of the New England Energy Conference, ''I see [CUB laws] as providing yet one more informed party at the hearing table, and to the extent it does that, I applaud it.''
Utilities base their objections to CUBs on the argument that they add another layer of bureaucracy to an already complex regulatory process. This, they claim, only delays rate-application proceedings.
That argument is disingenuous, Nader says, because the utility companies themselves stall during such proceedings whenever it suits their interests.