Imagine you are part of a lawsuit where the settlement is worth millions to your community, but only a few hundred dollars to you. And here’s the catch: to participate, you have to represent yourself without a lawyer. To do so, you’d have to learn legal terms, find evidence to support your case, and come up with a strong argument. And you better do all of that really well, because your opponent has a team of high-powered and experienced lawyers. Would you spend the time and effort? Probably not (me neither).
This is the perspective of each individual ratepayer when utilities propose raising rates. That’s why legislators in nearly every state have created a Consumer Advocate, an organization charged with the duty to represent ratepayers who couldn’t feasibly represent themselves in utility rate cases and other proceedings.
IMT recently wrote a miniguide for the National Association of Utility Regulatory Commissioners exploring this topic. In this blog, we will cover some key takeaways that local governments and other advocates can use to better understand their state’s consumer advocate.
Who are Public Utility Commissions?
Public Utility Commissions (PUC) are state agencies that regulate for-profit, investor-owned utilities to ensure that their investments, paid for by ratepayers, are in the public interest. PUCs operate as a quasi-judicial economic regulator—that is, they make decisions to approve or reject utility proposal based on the evidence presented to them. They’re important because they hold the key to transforming utilities to clean energy, meeting our climate goals, and providing a just transition for local communities.
Consumer Advocates Play a Key Role in Fair Utility Regulation
Consumer Advocates (CA) are organizations (in almost all cases) created by state legislatures to represent the interests of ratepayers in cases before the PUC. The size, nature, and level of involvement of each CA vary greatly. Generally, they participate in regulatory proceedings to fight for lower rates, consumer protection, and to improve utility planning, programming, and resource decisions for the benefit of all ratepayer’s—sometimes with a specific focus on low-income customers. Research found that, on average, the presence of CA puts downward pressure on rates, showing that they have a tangible effect on affordability.
“There are more outstretched hands than ever asking for ratepayer money. I see upward pressures on rates to retire plants, build new ones, and invest in new infrastructure. The consumer advocates’ role is to force a hard look at anyone and anything that is asking for ratepayer money—in an effort to keep service safe, reliable, and affordable.”
-Chris Ayers, North Carolina Utilities Commission Public Staff
A New Resource for Protecting the Public Interest
The recently published Guide, Public Utilities Commissions and Consumer Advocates: Protecting the Public Interest, explores how PUCs and CAs can cooperate to protect the consumer. The top two relevant takeaways for local governments and other advocates are below.
1. Consumer Advocates have a wealth of historical knowledge, want to protect the consumer, and should be a resource for advocates.
There is no denying there is a big barrier to entry into engaging on utility regulatory issues. That is why we created the Participating in Power report and our colleagues at the American Cities Climate Challenge wrote the Integrated Resource Plan Support Package. Local governments and other advocates can tap into the resource of their consumer advocates to understand the issues, get background information, and maybe even find out the CA is already pushing for some of the items they are working on.
“I think that PUCs should look at their consumer advocate as if they were a retired Commissioner with 30 years of experience, and now this person is just a citizen who is concerned with their own rates. There’s really no difference between that person and what the consumer advocate is and does”. – Chairman Kent Chandler, Kentucky Public Service Commission
2. Consumer Advocates and PUC’s benefit when local governments and other advocates collaborate on emerging and complex issues.
Since PUC Commissioners need stakeholders to submit evidence and perspectives in a proceeding to base their decisions on, local governments and other advocates can contribute their insights to these issues and help regulators make better decisions. For instance, CA’s focus on ratepayer protection, but a local government might have different insights into equity issues than the CA; sharing this could help advance both causes and introduce valuable new evidence into a proceeding and create a more equitable approach to utility regulation. For example, recognizing the importance of including diverse perspectives in utility regulation, recent legislation in Oregon ensures that environmental justice organizations have access to funding to participate in the PUC process alongside utilities, consumer advocates, and others.
Taking Action
Local governments and other advocates can:
- Reach out and get to know the Consumer Advocate in your state
- If you engage with your PUC, you could collaborate with your CA on shared goals (or simply support the CA’s points)
Check out the full guide to learn more about
- The history, role, and structure of Consumer Advocates
- How the role of Consumer Advocates is changing
- Opportunities for collaboration between PUCs and CAs
- Gain perspectives from excerpts from interviews with PUC commissioners and staff and consumer advocates.
To learn more, reach out to jake.duncan@imt.org.
