The Wyoming Office of Consumer Advocate, formed in 2003 and known as the OCA, is an independent office that is responsible under state law for representing consumer interests in matters involving public utilities in Wyoming. Most often, the OCA represents consumers in utility cases heard by the Wyoming Public Service Commission. Currently, the OCA is staffed by six professionals with decades of experience advocating for the best interests of utility customers: an Administrator and Deputy Administrator who both function as working rate analysts, two rate analysts and two attorneys. The OCA, like the PSC, is funded through an assessment on utility consumers when they pay their monthly bills. On average, the OCA’s annual budget costs the average utility ratepayer in Wyoming about a nickel a month.
Generally, utility companies must seek and be granted approval from the PSC before they can make any changes in the rates, terms or conditions of service. For example, before a utility can implement a rate increase, it must first file an application requesting PSC approval to do so. Under state law, the OCA has the right to participate in any utility proceeding before the PSC to advocate for the best interests of customers and of the public in general. When the OCA participates or “intervenes” in a proceeding before the PSC, it is their duty to ensure that the rate increase being requested by the utility is justified; that it is no more than necessary to enable the utility to continue providing safe, adequate and reliable service.
In order to ensure that a rate increase is necessary, the OCA conducts a detailed review of the utility’s expenses and investments, including items like workers’ salaries, maintenance expenses, investments the utility has made in things like substations, poles and wires and the level of return or profitability being requested by the utility. After reviewing all of this information, it makes recommendations to the PSC regarding any expenses or investments that it believes should be reduced or not included in customer rates. It does this in a hearing, not unlike a court proceeding, before the PSC, where the PSC takes evidence provided by the utility in support of its request, as well the OCA and others who recommend adjustments to that request. After hearing the evidence, the PSC then determines the rates the utility can charge going forward.
Recently, the OCA and the City of Sheridan intervened in the rate case filed by Montana Dakota Utilities (MDU) related to its electric service in the Sheridan area, its first since 2009. In this case, MDU originally requested an overall revenue increase in the amount of $3,225,447 per annum, or approximately 13.15 percent. After analyzing the application, the OCA recommended an increase of $2,379,112. Subsequently, the parties agreed to a negotiated rate increase of $2,712,245 per year, or approximately 11.05 percent, which was approved by the PSC. Negotiated agreements among parties to a utility rate cases are common and allowed by statute as they are thought to reduce the time and expense of regulatory proceedings. However, the ultimate authority to set rates rests with the PSC, and it can reject an agreement if it is found to be contrary to the public interest. Residential customers will see about a 10.20-percent increase, or about 16 percent less than MDU originally requested.
Bryce Freeman is an administrator for the Wyoming Office of Consumer Affairs in Cheyenne. Center Stage is written by friends of the Senior Center for the Sheridan Community. It is a collection of insights and stories related to living well at every age.