Horizon, Host: Ted Simons

May 27, 2009


Host: Ted Simons

Residential Utility Consumer Office (RUCO)


  • When utilities ask the Arizona Corporation Commission for permission to raise rates, RUCO goes to work to protect the interests of residential electric, natural gas, telephone and water utility ratepayers. Learn more about this state agency and what it does to protect Arizona citizens from excessive utility costs.
Guests:
  • Jodi Jerich - Director, RUCO (Residential Utility Consumer Office)


View Transcript
Ted Simons:
Most of us don't have a close when it comes to the company that provides our electricity or water. And if you're stuck with a utility, you're also stuck with their rates, but as David Majure reports one state agency is looking out for you when utilities try charge you more.

David Majure:
The cost of water keeps rising for Paradise valley resident Janice Stony. In recent years she's watched the water company try to raise rates on more than one occasion.

Janice Stony:
We certainly have, and they're coming more frequently these days.

David Majure:
Now she's fighting another attempt.

Janice Stony:
The initial rate increase request was 39%.

David Majure:
Like all consumers, Janice wants to pay a fair price for her water, and she's pleased to know that the residential utility consumer office or RUCO is watching her back.

Dan Pozefsky:
Our purpose is to represent the ratepayers, in doing that our purpose is not necessarily to get the cheapest rate, although we obviously are looking towards getting a reasonable rate.

David Majure:
State regulated utilities including water, natural gas, and electric companies can't automatically raise their rates. They need approval from the Arizona corporation commission.

Dan Pozefsky:
They seek to increase their rates usually because of infrastructure costs or other type costs that have gone up.

David Majure:
First the utility must file an application for a rate increase, then they have to justify it.

Commission Member 1:
Good afternoon, everyone. Welcome back to the commission.

David Majure:
That takes place in hearings before one of the commission's administrative law judges.

Dan Pozefsky:
The process similar to the way it is in a court proceeding.

Commission Member 2:
There are a variety of reasons why the document should be excluded.

David Majure:
The utility presents its testimony and other documents as do interveners in the case.

Dan Pozefsky:
Good afternoon, Your Honor, Dan Pozefsky on behalf of RUCO.

David Majure:
RUCO is usually one of them.

Kris Mayes:
You need a diversity of opinions here at the commission. You need multiple organizations arguing cases in front of the commission, and if you don't have that, then I think you have, you know, you have a much less balanced system, RUCO balances the equation for consumers.

David Majure:
RUCO was established by statute in 1983 at a time when that balance may have tipped toward utilities.

Kris Mayes:
Yeah, in fact, there was a period in I believe the 1970s and 1980s where there was a view that the commission wasn't doing enough for consumers and so that's when the legislature created RUCO. It was back in the period when large expenditures were being made by utilities, the nuclear plant was very controversial, and I believe it was then that the idea for RUCO really got started.

Commission Member 1:
Does that answer the concerns for all the parties?

David Majure:
After hearing all the evidence, the judge makes a recommendation to the corporation commission which ultimately sets the utility's rates.

Kris Mayes:
This is the open meeting of the Arizona corporation commission.

David Majure:
At an open meeting, commissioners consider the judge's recommendation as well as input from parties such as RUCO.

Kris Mayes:
I value it hugely.

David Majure:
Chairman Kris Mayes says RUCO has a tremendous impact on cases heard by the commission.

Kris Mayes:
All of the recent A.P.S. rate cases, the recent gold canyon sewer case, in which RUCO came in and said you know what? This rate increase request is way too high. They were right. I agreed with them. And we ultimately passed amendments that lowered that rate increase.

Dan Pozefsky:
We've had a number of cases where I think we've been very effective and persuasive in getting the commission to see things our way. Ultimately they resulted in really millions and millions of dollars over the years since I've been here and I have seen it, millions of dollars that have gone to the benefits of ratepayers.

David Majure:
Ratepayers like Janice, who's hoping her water rates remain reasonable.

Janice Stony:
Hopefully in the end with all of that input in the process, why sanity will prevail.

Ted Simons:
Joining me now is Jodi Jerich, director of RUCO, the residential utility consumer office. Thanks for joining us on Horizon.

Jodi Jerich:
Thank you, thank you for having me.

Ted Simons:
As far as taking cases, when does RUCO intervene and how is that determined?

Jodi Jerich:
Well, Arizona law tasks RUCO with representing Arizona families and individuals before the corporation commission when regulated utilities go before that body, asking to increase rates that are paid by the customers. And the corporation commission has a very full plate in all the dockets that they have to consider and RUCO does not have the means available to intervene in every case. So what we do is we intervene in the very large rate cases and those cases where a utility is asking for either a very large amount of increase or is asking for a change in public policy that would be a new issue to be considered by the commission.

Ted Simons:
So when the utility asks for a relatively large increase and says here's why xyz, and you look at that and say that's large enough for us to take a look at ourselves.

Jodi Jerich:
That's right. RUCO has a staff of financial analysts and we go and audit the books of these utilities and look to see if their numbers are jiving with what is -- with what is reasonable and what the consumer needs to ensure reliable and safe drinking water, reliable electricity and natural gas and telecommunications services.

Ted Simons:
How long would a typical case last that you get involved in?

Jodi Jerich:
You know, it depends on the complexity of the case, but generally about 12 to 18 months.

Ted Simons:
Ok. When you have I don't know if this works, correct me if I'm wrong, but you have different ratepayers on the same case looking for different reactions, different results. First of all, does that happen and if it does, how do you handle it?

Jodi Jerich:
You are absolutely right. You have different people and different interested parties intervening in cases, you have a utility, you have commission staff that participate and you might have interest represented by -- that represent businesses or industrial users and then you'll have RUCO who represents individuals and Arizona families and each one has competing interests and we present our best arguments before the corporation commission and the commission decides which way to vote.

Ted Simons:
Interesting. Now, do you take complaints directly from consumers?

Jodi Jerich:
No. The commission has a very able bodied staff of consumer services department and so when people have complaints about their service, of -- they go directly to the corporation commission to file those complaints.

Ted Simons:
Ok and you kind of take it over from there.

Jodi Jerich:
We are involved primarily in rate cases and in formal dockets, not individual complaints.

Ted Simons:
How is RUCO funded?

Jodi Jerich:
We are, well, first off we have an annual budgets of a little over a million dollars and reared fund's from assessments on large utilities.

Ted Simons:
All right. And as far as -- again, correct me if I'm wrong, but aren't most of these types of agencies associated with attorney general offices and those sorts of things, and this is not necessarily the case in Arizona.

Jodi Jerich:
That is correct. In 1983 the legislature created the Arizona residential utility consumer office, and it is an office that is run by a director and that director is appointed by the governor and serves in her cabinet and is subject to senate confirmation. In other states it is very common to have a people's advocate that is an arm of the attorney general's office that will argue before their public utilities commission, and we argue before the constitutionally created corporation commission.

Ted Simons:
Ok. Last question here, everyone's looking at renewables as the future here. How does RUCO -- talk to us about that. Because the financing of renewables is such a major aspect.

Jodi Jerich:
You know, I believe that public officials and public opinion have clearly signaled that they want Arizona to be in the vanguard for renewable energy development and renewable energy generation, and RUCO fully supports the development of renewable energies to have clean green energy home grown in Arizona. But I say that with the caveat that RUCO wants every dollar that is spent for renewable energies to be used to its maximum effect, get the best bang for the buck from the money that ratepayers pay toward renewables.

Ted Simons:
It's going to be an interesting dynamic, isn't it?

Jodi Jerich:
Yes, it is.

Ted Simons:
Thanks for joining us, we appreciate it.

Jodi Jerich:
Thank you for having me.

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