Granted, we live in trying economic times. And granted, state revenues are in free fall and the state will need to take drastic action to balance the budget.
But that’s no excuse for Gov. M. Jodi Rell’s misguided plan to scrap independent watchdogs over the utility and insurance industries — offices that aren’t even funded by the state or answerable to her.
The Office of Consumer Counsel, headed by Mary J. Healey, advocates on behalf of utility ratepayers in cases heard by the state Department of Public Utility Control. Rate-paying consumers and businesses fund her office’s $3 million annual budget, and they have received extraordinary returns. Over the past five years, Healey told legislators recently, her office’s advocacy in rate cases led to $2.5 billion in savings for utility ratepayers. She has the documentation to prove it.
Likewise, the $1 million budget for the office of Healthcare Advocate Kevin Lembo is covered by insurance companies. He addresses consumer complaints against those insurers, and his office has won widespread praise.
The two watchdogs are funded directly by the people they serve, and they have strong track records. Tampering with their duties and their funding in the name of addressing a fiscal crisis is downright dishonest.
Rell proposes to shift the duties of the consumer counsel to the office of Attorney General Richard Blumenthal, but Blumenthal doesn’t want the job.
He says Healey’s office is a vital partner in efforts to counterbalance the considerable legal, economic and political firepower of utilities that work tirelessly to raise rates on behalf of their shareholders. Blumenthal doesn’t have the staff to fill in the gap, and he’s the first to admit it.
In a typical rate case, a utility makes an argument before the DPUC for rates based, among other things, a “fair rate of return” on investment for the utility. Setting a return rate is a DPUC judgment call. The utility tries hard to influence that call by hiring expert witnesses.
The Office of Consumer Counsel conducts its own economic analyses and hires its own witnesses to counter the witnesses hired by the utility. The DPUC tends to split the difference between the two.
It’s all part of a game that’s played over and over. There’s nothing fundamentally wrong or unfair about it. Utilities and the ratepayers have lived with the results for more than 30 years. And nearly every other state operates under roughly the same arrangement.
Now Rell wants to remove a central player, tipping the balance in favor of one side — the utility — at the expense of the other — ratepayers. It’s not fair to expose consumer and business ratepayers to higher utility costs when they are struggling economically, just like the state.
But Rell’s plan wouldn’t even save any state revenue.
A bill introduced in the House that would carry out Rell’s bidding calls for utility companies to continue paying money for consumer advocacy. But instead of directing it to Healey’s office, the bill would create a new “Attorney General and Public Utility Control Fund” controlled exclusively by the General Assembly.
So even if the AG desired to hire an expert witness in a utility rate case, he’d need to ask permission. The purse strings that are now controlled by an independent consumer advocate would be turned over to the Legislature.
The bottom line: In the name addressing a fiscal crisis, Rell proposes to politicize a consumer advocacy function that has been successfully depoliticized.
The consumer advocacy offices were set up to be politically independent.
Hands off, Governor Rell.
