Public Protection Department

CONSUMER UTILITIES RATE ADVOCACY DIVISION (CURAD)

The statutory mandate of the Consumer Utilities Rate Advocacy Division, established by Act 39 of 1981, is to aggressively represent the interests of Arkansas’ utility customers through advocacy, education, and litigation.

Historically, the Attorney General has been particularly active in trying to protect residential consumers from utilities’ rate proposals that seek to place the bulk of rate increases upon those consumers. In performing this role, the Office of the Attorney General over the years has saved ratepayers tens of millions of dollars in rate reductions, rebates, and in limiting justified rate increases to the lowest level possible.

The danger of “captive” residential customers bearing more and more of the cost burden becomes even greater with deregulation of some functions, as non-residential customers become free to obtain their utility services from other sources, and the utilities attempt to collect more costs from the dwindling number of remaining (primarily residential and small commercial) customers. Also, as deregulation allows utilities and their affiliates to branch out into other non-regulated activities, the potential for affiliate abuse, that is, using ratepayers’ money to finance unregulated affiliates’ operations and profits, becomes even greater. The Attorney General has thus become even more vigilant in performing a watch-dog role against affiliate abuse by utilities and will continue to do so in the future.

The Division also interacts with the General Assembly concerning major legislation involving the regulation of utilities. The Attorney General’s influence can be seen in the history of legislation regarding electric restructuring. In 1999, many parties advocated legislation to allow all retail electric customers to choose their supplier of electric generation as early as 2002. At that time, the Attorney General supported this legislation, dubbed “electric deregulation,” but succeeded in obtaining certain consumer protections in the statute. In the 2001 legislative session, the Attorney General supported pushing the time period back to 2003, at the earliest. He also succeeded in including additional protections for consumers in the bill postponing the date for deregulation, so that, unless “most consumers” will receive a “net benefit” from deregulation, the process will not go forward.

Since then, studies have shown that Arkansas’ electric rates were more likely to stay lower and more stable under continued regulation than they would under deregulation. Therefore, the Attorney General worked with the Public Service Commission and legislators to repeal “electric deregulation.” In working on the legislation, the Attorney General and the Division worked with all parties to make sure that certain consumer-friendly provisions of the 1999 and 2002 Acts were maintained. Among such provisions were the following:

• Protection of the ratepayer’s right not to be disconnected in extreme weather.
• The confidentiality of utility customers’ bills, usage, and payment records.
• Specific restrictions on dealings between regulated utilities and their unregulated affiliate companies.
• The prevention of double recovery of transition costs by utility companies.
• Expanded Public Service Commission oversight of utility company purchases of electricity.
• Assurance that all rates charged to Arkansas ratepayers will be subject to a just and reasonable standard.
• The Attorney General also requested additional amendments to protect all Arkansas consumers. These included:
• Keeping in place current measures designed to prevent another financial hardship like that relating to Grand Gulf.
• Eliminating provisions from the deregulation bill that related to stranded costs.
• Allowing additional Public Service Commission oversight of comprehensive resource planning.

A major part of the Division’s role relating to utility use in Arkansas is to disseminate information to ratepayers, a role that continues to grow in importance every year. The Division handles scores of inquiries each month from utility consumers. Many of these concern utilities (such as water companies) that are not regulated by the Public Service Commission, or indeed by any regulatory agency. Although not limited to such, the great majority of these callers are ordinary residential ratepayers. They seek information concerning their individual bills, the utilities’ rates, or procedures in general. Sometimes they ask the Division to investigate perceived errors or inequities. On occasion, the Division has intervened in consumer complaints at the Public Service Commission, when these complaints bring up issues of far-reaching importance. During the 2000-01 winter, the Division was particularly active in assisting gas customers in resolving billing problems and making payment arrangements for unprecedented gas bills.

Another role of the Division concerns federal utility regulation. To the extent Arkansas’ interests are affected by actions by the Federal Energy Regulatory Commission, the Federal Communications Commission, or other federal regulatory agencies, the Attorney General and the Division work independently, in cooperation with the Arkansas Public Service Commission, or through national organizations such as the National Association of Attorneys General or the National Association of State Utility Consumer Advocates, in order to protect the interests of the people of Arkansas.