America's electric and natural gas utility bill rose $13.4 billion last year, or more than twice the total rise in such costs between 1948 and the 1973 oil embargo, according to a congressional study.
The annual Senate Governmental Affairs Committee survey of consumer utility bills also found that nearly 80 percent of the billions in added fuel costs resulted from the so-called "fuel adjustment clauses" that many states permit, allowing utilities to pass through higher energy costs to consumers automatically.
"It is possible" that utility companies would have been unable to recoup the full $11 billion in 1977 that they did under fuel adjustment clauses if gas and electric utilities had been forced to undergo formal rate proceedings before state public utility commissions, the survey concludes.
One-third of the increased utility costs passed on last year resulted from gas company rate boosts, and the remaining two-thirds was due to higher electricity charges. The total increase in utility rates over the last four years amounts to $48 billion.
The Senate Governmental Affairs Committee report found that utility companies received about 50 percent of what they had requested in rate increases during formal hearings last year before state utility commissions.
For some years now, utility executives and organizations such as the Edison Electric Institute, an industry trade association, have argued that fuel adjustment clauses are necessary for the companies to meet rising coal, oil and natural gas prices.
Calling the fuel adjustment clauses "a boon to utilities and the bane of customers," the Senate committee report says that they account for an increasing share of company revenues. Last year the automatic pass-throughs provided more than 80 percent of the total increase compared with 68 percent in 1974.
"Many utility commissions have permitted the use of fuel adjustment clauses as an alternative to the more difficult and time-consuming task of considering rate increase requests in formal hearings, where intervenors and commission staff can challenge, question and counter utility proposals," the report said.
Fuel adjustment clauses have been a continuing target for consumer activists and public advocacy groups in a number of states.
One such group, the Washington-based Environmental Action Foundation, argues that the automatic pass-through to consumers for higher fuel costs "subsidizes inefficient management by utilities . . . and reduces utility incentives to control fuel costs and bargain with fuel suppliers."
The Senate report, prepared jointly with the Library of Congress, says that there are now 10 state utility commissions which either partially or totally prohibit the use of fuel adjustment clauses.
The power to set electric and natural gas utility rates is retained by the states and, thus far, has not been subject to federal actions.
President Carter's utility rate revision proposals sent to the Congress contained no specific initiatives to continue or prohibit fuel adjustment clauses at the state level.
The Energy Department's Economic Regulatory Administration, however, has the power to intervene in rate hearings at the state level.