Purpose

Allows the Residential Utility Consumer Office (RUCO) to represent consumer interests before federal courts, regulatory agencies and commissions that establish rates if the proceedings involve a rate, tariff, charge or term of service and the interests of residential utility consumers, and requires the Director of RUCO to adopt a consumer outreach and education program. Repeals the statutes relating to the Residential Utility Consumer Board (Board).

Background

Residential Utility Consumer Office

Established in 1983, RUCO serves as an advocate for residential consumers of public utilities in rate hearings before the Arizona Corporation Commission (ACC). Of 39 states with similar utility ratepayer advocate offices, 32 allow their consumer advocate offices to represent ratepayers before federal agencies, commissions and courts, such as the Federal Energy Regulatory Commission (FERC) and the Federal Communications Commission (FCC).

RUCO currently does not have the statutory authority to represent residential utility consumers before federal agencies, commissions and courts. However, with the onset of electric deregulation, RUCO has been invited to participate in the development of several deregulation implementation programs under the jurisdiction of the FERC and the ACC. In addition, the FERC has invited input from western state policymakers, including Arizona, to help shape the design of the California wholesale electric market, which will impact the Arizona market. Further, the FCC imposes several charges on Arizona telephone bills, which RUCO would like to be involved with setting. The strike everything amendment to H.B. 2418 expands the statutory authority of RUCO to represent, in consultation with the Governor, consumers interests at hearings before federal regulatory agencies and commissions where rates are established and federal court proceedings involving rates, tariffs, charges or terms of service and the interests of residential utility consumers.

In response to electric deregulation, RUCO has initiated a consumer outreach program. The strike everything amendment to H.B. 2418 expands the Director’s powers and duties to formalize the education and outreach activities that are currently being performed.

Residential Utility Consumer Board

In 1999, the Office of the Auditor General (OAG) conducted a performance audit of both RUCO and the Board. In its findings, the OAG found RUCO is often successful at having its position adopted by the ACC and limiting rate increases for residential consumers. The audit report also included a finding that the Board has not effectively fulfilled the requirements of its statutory mandates.

During the 2000 legislative session, H.B. 2239 was passed by the Legislature and signed by the Governor (Chapter 325) continuing RUCO for ten years, while the bill continuing the Board was held in the House of Representatives, effectively terminating the Board. As they are no longer necessary, the strike everything amendment to H.B. 2418 removes all statutory references to the Board.

The strike everything amendment to H.B. 2418 consists of the provisions of S.B. 1048 and S.B. 1049, as passed by the Senate.

There is no anticipated fiscal impact to the state general fund associated with this measure. According to a fiscal note prepared by the Joint Legislative Budget Committee, any costs arising from RUCO’s expanded authority will be incurred in currently budgeted activities. RUCO has indicated that it does not believe any additional costs will result from the measure and does not have any intention of requesting additional resources for the activities.

Provisions

1. Allows RUCO to represent consumer interests in proceedings before federal regulatory agencies and commissions where rates are established and federal court proceedings involving rates, tariffs, charges or terms of service and the interests of residential consumers furnished by public service corporations under the ACC’s jurisdiction.

2. Allows the Director, in consultation with the Governor, to represent and appeal for residential consumers at such proceedings before federal regulatory agencies, commissions and courts. Prohibits the Director from participating in such proceedings that involve a member-owned nonprofit cooperative corporation.

3. Requires the Director to adopt a consumer outreach and education program and allows the Director to present information relating to the research, study and analysis of residential utility consumer interests as part of that program.

4. Repeals statutes related to the Board.

5. Makes technical and conforming changes.

6. Provides for a general effective date.

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