Utah utility ratepayers call upon Gov. Jon Huntsman, House Speaker Greg Curtis, Senate President John Valentine and their colleagues to hold utility regulatory agencies harmless in budget reconsiderations.
On Tuesday, the governor called a special session of the Legislature beginning at 9 a.m. today because revenue projections for the July 2008-June 2009 budget year have been reduced by $272.4 million. But there is no revenue shortfall for utility regulation. State government has already collected the year's Public Utilities Regulation Fee from the utilities. Rocky Mountain Power, Questar Gas Co., Qwest, etc., are already collecting the money back from ratepayers in their monthly bills.
If legislators cut the budgets of regulatory agencies, the money will be diverted to tax-funded programs, and ratepayers' bills won't go down by a penny.
Meanwhile, the utilities will celebrate an additional restraint on regulators, knowing their regulatory spending can continue unabated.
Out of the total the typical consumer pays the utilities each year, about $2.06 goes to the regulatory agencies from RMP and $2.42 from Questar. But an even larger slice of our bills about 1.6 times larger goes to fund the utilities' efforts to raise rates.
Your share of regulatory expenses is statutorily capped at 0.3 percent of utility charges (excluding taxes, fees and out-of-state phone calls), but the utility can spend as much as it wants, and the Legislature can't cut its budget. The bills of a typical Questar customer rose 85 percent from January 2000 to July 2008, and its customer base rose more than 20 percent. RMP's Utah revenues increased about 80 percent over the same period. Yet regulatory budgets were increased only 28 percent.
It's not that ratepayers want to pay more for regulation, but this may be one case where you get what you pay for.
From June 2003 to July 2007, regulatory budgets were increased by a miserly $4,500 0.07 percent while the typical Questar bill rose 45 percent and RMP's revenues went up 44 percent. During that period, RMP applied for three rate increases. In aggregate, regulators gave RMP 53.3 percent of what it asked for after private negotiations and abbreviated, rubber-stamp hearings.
Regulators had closely scrutinized RMP's two preceding applications, between September 1999 and September 2001, and held extensive public hearings. RMP won an average of just 28 percent of what it asked for in those proceedings.
Since July 2007, regulatory budgets have been increased almost $0.75 million. In December 2007, RMP asked for a $161.2 million (11.3 percent) rate hike. The application has been thoroughly examined by regulators and consumer representatives and, after many days of open hearings, RMP won a $36.2 million (2.6 percent) raise.
The increase 22.5 percent of RMP's request went into effect in August, but RMP had already asked for another boost, currently $114.5 million to start in March 2009. Questar asked for $27 million in December 2007, received similar scrutiny, and won $12 million starting last month. It has said it will probably be back for more this fall.
Ratepayers need adequately funded regulatory agencies to look closely at these cases and ensure we are charged no more than just and reasonable rates.We cannot be confident that is happening when private negotiations replace vigorous litigation, and brief pro-forma hearings, often convened at unreasonably short notice, supplant properly scheduled and advertised public hearings.
Roger Ball, former director of the Committee of Consumer Services, is moderator of the Utah Ratepayers Association.