It’s the Capitol: State Consumer Advocates Claim Major Ratepayer Savings

By Published On: March 23, 2012

In its annual report to the Legislature, the California Public Utilities Commission’s Division of Ratepayer Advocates claimed that every $1 spent on the organization saved ratepayers $157. While DRA acting director Joe Como defended the total amount of savings his agency has produced, he warned about the continued rise in power bills. There are “too many avenues right now for rate increases,” Como told the Assembly Utilities & Commerce Committee March 19. He noted investments in aging infrastructure, for instance, which will lead to prices increasing “quite a bit in the next few years.” Como said the organization’s biggest effort is in the area of energy rates. He said that in 2012, DRA is attempting to reduce the cost-of-capital--that is, the amount of money ratepayers must pay back for utility infrastructure investments. At the high end, utilities get up to an 11.5 percent rate of return for equity investments to modernize aging infrastructure. While generally a routine annual review, Assemblymembers showed a great deal of knowledge of the commission and the ratepayer division. Playing devil’s advocate, committee chair, Assemblymember Steve Bradford (D-Inglewood), challenged whether the top tier of ratepayers should be subsidizing baseline and other customers. “The upper tiers can’t support” it, replied Como. “Rate reform needs to be done.” He suggested that time-of-use rates can address the financial division. “But how we get there is somewhat perplexing.” There was no action to be taken by the committee. The division report is an annual requirement of state law.

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