Another way ratepayers are getting screwed




Photo by Arizona Public Service | Facebook

If you haven’t heard of the Residential Utility Consumer Office, otherwise known as RUCO, you’re not alone. Though this government organization has been around for more than thirty years, few Arizonans know about its existence.

RUCO is a consumer advocacy agency, funded by ratepayers, for the benefit of ratepayers. Its job is to advocate on our behalf whenever public utilities seek rate hikes at the Arizona Corporation Commission.

But it seems lately, or at least in the case of Arizona Public Service (APS) rate reviews, this agency has been asleep at the wheel.

As we now know — courtesy of citizen activists, not RUCO — the 2017 APS rate hike cost consumers far more than the advertised 4.5 percent. In some cases, households were doling out double or even triple this amount.

The discrepancies happened because APS failed to do as promised, which was to lower certain portions of monthly bills called “adjustors” at the same time it increased base rates. Instead, APS stalled on the adjustors, waiting up to 18 months and raking in tens of millions of dollars in additional profits.

Consumers balked, signing on to a petition by activist Stacy Champion to challenge whether the hike was fair and reasonable.

RUCO, which again, is supposed to represent ratepayers, couldn’t be involved in the Champion complaint because they had already signed off on the original agreement.

I find it odd RUCO would choose to sign off on an agreement legally binding them from taking a position on any future rate challenge. Are they that confident no new information could be presented to call into question whether rate increases were, in fact, just and reasonable? 

Perhaps RUCO isn’t as savvy as it should be. At least that’s the impression I was left with after watching an interview by Channel 12’s Joe Dana with RUCO’s director, Jordy Fuentes. 

Dana asked Fuentes to explain why APS charges considerably more per kilowatt hour than all of the other electric companies in Arizona, noting that as the largest company, it should have better economies of scale.

Fuentes responded that “there’s a lot of factors that play into rates,” but when pressed, couldn’t identify what those factors are or why they’d be higher for APS customers.

 

Dana also questioned Fuentes about APS’s “lack of consistency with adjustor mechanisms.” Fuentes seemed anxious to take the heat off of APS, saying the problem was an “industry-wide situation,” and he believes the question as to whether there were “fundamental flaws” in the rate case is still to be determined.

 

Let’s see, the adjustors were not lowered as promised, and APS brought in an additional $28.4 million in revenues above and beyond what was approved by the commission.

What’s still to be determined, Mr. Fuentes?

If RUCO wants to maintain any level of credibility with ratepayers, the agency should probably start looking for a new director. But don’t hold your breath because RUCO directors are appointed by the governor, and considering Gov. Doug Ducey’s cozy relationship with APS and its top executives, it’s unlikely a replacement is coming anytime soon.

That’s too bad because the utility giant has filed yet another rate hike request with the Corporation Commission. It seems tens of millions in excess profit wasn’t enough. They want more, $184 million more.

Since we’re footing RUCO’s bill, we deserve to have an advocate in our corner, not another agency head that acts as a rubber stamp for APS. 

Fuentes is no champion. 

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Julie Erfle hails from North Dakota, but has called Arizona home for more than twenty years. She began her career in Phoenix as a creative services producer at KPHO-TV5 and 3TV. Blending her background in communications with her passion for community activism, Julie launched the political blog Politics Uncuffed in 2011, and began working as a communications director and consultant on candidate and initiative campaigns. She is the former executive director of Progress Now Arizona, a progressive communications and advocacy non-profit, and a fellow with the Flinn-Brown Arizona Center for Civic Leadership and Leading for Change.