A big topic of debate at today's Idaho energy plan hearing was the lack of a consumer advocate in Idaho's utility rate-setting process, a distinction Idaho shares with just a handful of other states. According to a 2004 study by the National Regulatory Research Institute at Ohio State University, 43 states and the District of Columbia at that time had an independent agency that acts as a consumer advocate, including three that had created nonprofit public corporations to serve as utility consumer advocates. The Idaho AARP reports that today, since the defunding of Georgia's office, Idaho is one of eight states with no independent utility consumer advocate, and the only one in the west.
Charlie Acquard, executive director of the National Association of State Utility Consumer Advocates, said most are funded by assessments on utilities and the agencies vary in size. “They generally work,” he said. “Even a small staff is better than no staff, because it keeps 'em honest.”
Sen. Shawn Keough, R-Sandpoint, proposed legislation in 2001 and 2002 to establish a consumer advocate in Idaho's utility regulation process, but it was opposed both by Idaho's big utilities and the PUC, and didn't pass. However, Keough said she's been hearing increased interest in the idea from other lawmakers in the past two years. “I think it's certainly an idea that needs to be on the table,” Keough said.
Acquard said nationwide, utilities recognize that involving a consumer advocate in the process beats “at the end of the process, if you have some consumer group screaming about a rate increase.” He said, “We may be pains in the butt, but smart utilities realize we bring a sense of reality to the process.”
Some lawmakers on the Legislature's Interim Committee on Energy, Environment & Technology were cool to the idea today, however. Rep. George Eskridge, R-Dover, asked if the provision of up to $40,000 to fund intervenors' costs in rate cases covers that issue. Lynn Young, a volunteer board member with AARP, responded with an example: A case in which an individual consumer decided to intervene, hired a lawyer and incurred thousands of dollars in legal fees – and then wasn't deemed to have provided different enough arguments to warrant getting any of the intervenor funds, which are available to various parties, from irrigators to community action agencies. “So that provision has a very dampening effect on any residential customers who want to come before the PUC,” Young said.
Rep. Eric Anderson, R-Priest Lake, said, “In some cases I think there is an advocacy agency already, and it's called the Legislature and it's called the elected officials in the state.” But Sen. Elliot Werk, D-Boise, said as a legislator, he doesn't feel qualified to intervene in a PUC case on behalf of consumers. The PUC holds quasi-judicial hearings on proposed utility rate increases. Parties that intervene in the process can participate in that hearing, cross-examining witnesses and presenting evidence for their side. But it's a complicated and somewhat obscure process.
Young said some argue that the PUC staff already advocates for consumers, but she said that's not their role. “They balance the needs of utilities and customers and other groups,” she said.
David Irwin, AARP spokesman, said, “Our argument is, look, the utility companies and several other groups are very well represented in utility rate cases. The group that is continually left out of that largely is the largest group of ratepayers in the state, and that is the consumers.”
Anderson asked why AARP doesn't fulfill that role itself; Young said the group does advocate for seniors, but that for rate case intervention, “I think having a group that is dedicated to doing that, trained, have the knowledge and experience, is a far better solution for a large group of customers that have not been adequately represented in the utility arena.”
In addition to advocating for consumers in rate cases, most state consumer utility advocates have the authority to appeal PUC decisions. Washington's falls under its state attorney general's office.
The Ohio State University study concluded, “The independent consumer advocates established by state statutes have a distinct function among consumer representatives. They have the funding and expertise that many private consumer interest groups lack.”