| Utility Lobbyists Rebuffed By House Commerce Committee: IURC Enforcement
Bill Moves To The Full House
FOR IMMEDIATE
RELEASE In what consumer groups called an “act of courage by the majority of the committee”, the House Commerce and Economic Development Committee passed out House Bill (HB) 1181 with a party-line vote of 8 to 5. Citizens Action Coalition and AARP praised Commerce Chair Craig Fry (D-Mishawaka) and Representative Scott Pelath (D-Michigan City) for their support for the penalty levels in HB 1181. Five of the committee’s six Republican members voted against the bill. HB 1181 was designed by the Indiana Utility Regulatory Commission to authorize meaningful penalties for violations of its rules, regulations and orders by Indiana utilities. Chris Williams, Executive Director of the Citizens Action Coalition, said, “The Citizens Action Coalition fully supports the Commission’s efforts to acquire the necessary enforcement authority to protect ratepayers from negligent quality of service practices and other unlawful acts with respect to utility operations. The current penalty levels in HB 1181 are very reasonable and necessary to rein in illegal utility behavior. CAC also fully supports an amendment to the bill that was adopted by the committee which gives the IURC fining authority of up to 3% of intrastate revenue. Any further weakening of the fining authority currently in the bill would be a disservice to ratepayers in the state.” Paul Severance, Executive Director of United Senior Action, said,”It’s unfortunate that after the Ameritech debacle and the near melt-downs in electric utility service in certain parts of the country because of deregulation, legislators still insist on protecting the interests of utility companies against those of consumers. Members of the committee, who voted against HB 1181, acted against consumer interests. We urge the legislature not to support amendments which reduce the level of fines.” Nancy Griffin, state director for AARP, said, “As far as AARP is concerned, ratepayers have spoken loud and clear on this issue. The fact that public ire is currently focused on Ameritech does not preclude the clear potential of similar incidents in other areas of utility service. For instance, electric utilities nationwide have cut almost 30% of their workforce. This has already negatively impacted the electric utility industry’s ability to restore service after severe storms. These drastic reductions in workforce are a direct result of the move to deregulate the electric industry. The Commission must have the necessary authority now to help avert any future quality of service disasters similar to the recent Ameritech debacle.” The groups pointed out that Indiana utilities are financially very healthy and that some large utility monopolies, such as Ameritech, continue to earn excess profits. Chris Williams said, “The combined 1999 revenues of Indiana’s electric investor-owned utilities were over $5.5 billion. Ameritech Indiana’s 1999 revenue was over $1 billion with a return on common equity approaching 40%. Opportunity Indiana has only made Ameritech’s profits even more excessive than they were prior to partial deregulation. Northern Indiana Public Service Company had not had its retail rates reviewed since 1987 prior to the recent IURC investigation into possible over earning by the company. Moreover, as mergers and acquisitions drive the headquarters of many utilities move out of state, and potentially overseas, there will most certainly be less interest in providing Hoosiers adequate quality of service.” CAC, USA, and AARP also believe that complaints that HB 1181 will hamper competition come from self-serving lobbyists who are merely crying wolf. Paul Severance said, “The only significant barrier to competition for telephone customers is the anti-competitive behavior of incumbent telephone companies. Potential and actual competitors testified before the House Commerce, Economic Development and Technology Committee that fining authority would not hamper competitors from entering the market. Legislators should not be fooled by utility lobbyists crying wolf while attempting to sound pro-consumer. Legislators must separate reality from the sheep’s clothing that is covering monopoly utility interests.” The pro-consumer coalition also suggests that fears of the Indiana Utility Regulatory Commission are misplaced, particularly with respect to small utilities. Chris Williams said, “As for smaller utilities, if service quality is maintained and other legal obligations are met they have nothing to fear from HB 1181. The vast majority of these companies, including municipal utilities and REMC’s, have provided excellent service for years. There seems to be the notion that the Commission will begin head hunting once granted fining authority. However, the Commission’s statutory mission and historical behavior indicates that it prefers to work with utilities.” AARP’s Nancy Griffin concluded, “HB 1181 withstood a withering barrage of pressure before it passed the House Commerce Committee from big utility interests. But as this legislation moves to the full House, it will be important for the public to weigh in on the issue. To that end, we encourage all citizens to communicate with their state legislators on this important bill.” How the House Commerce, Economic Development and Technology Committee Voted on HB 1181
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