The Consumer Congress of Virginia, aided by the former chairman of the Consumer Product Safety Commission, urged the State Corporation Commission yesterday to hold hearings on its announced plan to limit utility rate increases to no more than rises in the cost of living.
Fearful that the state regulatory agency might unilaterally adopt procedures that could actually cost customers more, the consumer group asked the SCC to give interested parties a chance to comment on the new regulations before they take effect in May.
"Not only are people concerned about what's happening with utilities, there's a new degree of frustration with the process of determining the increases," said S. John Byington, the former controversial chairman of the Consumer Product Safety Commission.
"Citizens aren't saying they want a freeze on utility rates, but they do want to make sure the increases are legitimate and justified," said Byington, a Washington lawyer who lives in Annandale.
The Virginia House of Delegates recently passed a resolution directing the SCC to change its practices and procedures for investigating the earnings of public utility firms that apply for rate increases.
The resolution, which set down a list of procedures that the SCC said it planned to implement, also directed the agency not to approve rate increases that exceed the increase in the cost of living for the previous year.
But neither utility firms nor consumer groups have been given details of the new procedures.
"Our concern is that there is no guarantee we'll be given copies of the new procedures in advance or asked to participate in their formulation," Byington said.
In addition, according to Diane Worthington, board chairman of the Consumer Congress, some utility customers fear that the new rules will allow an automatic annual increase in utility rates in excess of past increases -- just so long as the increase does not exceed the rise in the cost of living.
The consumer group said the SCC's new regulations should be made public by April 16 and a public hearing should be held no earlier than 21 days later. An additional 21 to 30 days for further comments should be allowed if the SCC revises the rules significantly from those originally published, the Consumer Congress said.
Byington and Worthington said the SCC's new rules should require utility firms to submit detailed balance sheets and income statements to support rate increase requests. The agency should assign more staff to examine the financial documents, they said.
To prevent the state and utility customers from being "burdened by frequent and costly rate proceedings," the consumer group also urged the SCC to limit revenue requests to a once-a-year basis. But the group cautioned that this should not be perceived as allowing utility rates to be automatically increased every year.