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Consumer Organizations Concerned About Negative Impacts To Monthly Utility Bills
Tuesday, the Arizona Corporation Commission voted to upend its longtime ratemaking process, which included ample opportunities to challenge utility expenditures and engage the public, in favor of a system that consumer leaders said will enable utilities to annually increase rates, have essentially no incentive to operate efficiently, and offers less opportunities for stakeholders and ratepayers to provide input. The vote was 3-2 with Commissioner Lea Marquez Peterson and Commissioner Anna Tovar siding with the request of consumer advocates to slow down the process in order to avoid unintended consequences and ensure ratepayers are protected.
Diane E. Brown, Executive Director of the Arizona PIRG (Arizona Public Interest Research Group) Education Fund, stated, “The Commission, who has a responsibility for due diligence, rushed a vote that will essentially overhaul the Commission’s longstanding ratemaking system and its methodological approach in favor of a policy statement that looks good on paper but means nothing in reality.”
Brown noted that the policy statement makes claims that aren’t backed-up with evidence nor, she said, does it provide details on what rate-related information will be routinely provided; how oversight and stakeholder engagement will be improved; how reducing regulatory burden won’t just shift the financial risk from utilities and their shareholders to ratepayers; or how administrative efficiency will be enhanced in a manner that enables appropriate oversight.
Kelly McGowan, Executive Director, with Wildfire: Igniting Community Action to End Poverty in Arizona, added, “As an engaged stakeholder and regular intervenor in rate cases, we are especially concerned this policy will inhibit our opportunities to be involved in and advocate for low-income ratepayers.”
The Arizona PIRG Education Fund and Wildfire expressed concerns that ratepayers with electric, gas, and water utilities under the Commission’s jurisdiction could be hit especially hard by annual bill increases from each utility. McGowan said that Arizona ratepayers are already struggling to afford their energy bills noting that “in the last 12 months 29% of Arizonans reduced or forewent expenses for household necessities in order to pay their energy bill”.
The organizations also pointed to the lack of certainty from the Commission to ensure programs that benefit consumers will remain intact or that utilities will not be allowed to overinvest, which can lead to higher costs for ratepayers.
Brown concluded, “Under formula rates in other states, utilities and their shareholders have been the winners, and ratepayers and their bank accounts have been the losers. The Commission should reconsider their decision and strike a balance that can work for utilities and ratepayers.”
