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Ralph Nader > In the Public Interest > A Self-Defense Plan for Utility Customers

Residential utility con­sumers are fighting mad about the drastic increase in electric, gas and tele­phone bills.

Electricity rates, for example, rose 55.4 percent on the average during the first half of this year for the country’s 50 largest utili­ties. But consumers have no strategy, other than sporad­ic protests and underfunded lawsuits, to try and redress their very real grievances.

HERE IS a proposal which would forge a strong and lasting consumer effort for meaningful utility re­form.

What residential utility customers need most is organization and a full-time staff of advocates and analysts. Such a state-wide consumers’ organization could be established by state law or public utility commission regulation and funded through a check-off.

The check-off would work this way. Included with e very monthly utility bill sent to the residential cus­tomer would be a check-off card. If the consumer de­sired, he or she could check-off the amount to be contributed to their action group and add it to their utility bill.

The utility would then be obliged, under strict state audit, to pass such contribu­tions monthly over to the Residential Utility Consum­er Action Group (RUCAG).

RUCAG’s constitution and by-laws could be de­veloped by statute, regula­tion or a consumers’ con­vention similar to a constitutional convention. The structure of the group should ensure its control by utility consumers and not by the utilities or their indentured government agencies. Consumers could convene RUCAG meetings, elect officers and establish basic policy.

RUCAG would then go to work with its staff of con­sumer lawyers, account­ants, economists, engi­neers, organizers, writers and other skilled persons to represent the daily and long-term interests of resi­dential utility consumers.

Think what this could mean to citizens concerned about the deterioration of telephone service and the endless surcharges de­manded or proposed such as the forthcoming cus­tomer charge for informa­tion calls.

Imagine the impact of a RUCAG in your state chal­lenging the utilities on rate increases which reflect pad­ding, inefficiencies and profligate promotional spending. Consider the effectiveness of a full-time staff representing a com­munity against nuclear power hazards and costs.

Contemplate the role of a consumer advocacy organization, backed by hundreds of thousands of citizen consumers within a state, in developing the necessary structural changes for governmental policies and utility industry practices so as to produce an efficient and healthful energy policy.

NOW, consumers find that their individual com­plaints against their elec­tric, gas or telephone company frequently go un­heeded. RUCAG would also be the consumers’ ombuds­man here.

The overreaching de­mands utilities are making or are about to make to cover up their mass mis­management, waste men­tality, lack of research, and discriminatory practices against residential consum­ers over the years require this kind of systematic con­sumer effort.

For example, utitities want automatic pass­throughs for their operating costs along with their present fuel adjustment provision. They want to in­clude in the rate base all plants under construction. They want more federal tax relief, even though one fourth of the major electric utilities paid no federal in­come tax last year while others also profitable, paid only a fractional federal tax.

These moves would make a mockery of state regula­tion and of responsibility to the U. S. Treasury.

BOTH Treasury Secre­tary William Simon and Federal Energy Adminis­trator John Sawhill are pushing state regulatory commissions to throw. overboard their regulatory responsibilities and give these monopolies what they are demanding quickly. These men also want more permissive federal tax loopholes for the utilities which amount to indirect subsidies.

Utilities have enormous legal privileges under state laws. They have a monopo­ly of service and are guar­anteed a sizeable return on their investment. In return, state laws, passed decades ago, require that these utili­ties meet the tests of public interest and that state utili­ty commissioners protect the interests of consumers. The proposed residential utility consumers’ check-off system is squarely within the purpose at these laws.

It is long overdue to im­pose an obligation en these utilities to help their rate payers who are the source of their profits. This is all the more imperative inas­much as the expenses for a rate proceeding are an allowable expense to be charged against the rate payer.

Consumers or consumer groups interested in more details about this check-off proposal should write to Martin Rogol at P.O. Box 19312, Washington, D.C. 20036.