AARP Report Calls for Better Ratepayer Representation and Structural Changes Within VT Department of Public Service

A recently-released report sponsored by AARP Vermont shows that the Vermont Department of Public Service (DPS), which purportedly represents ratepayer interests, has an inherent conflict of interest and needs immediate reform. The report, closely examines the actions taken by DPS over the past eight years before Vermont’s utility regulators. It finds that, time-after-time, the DPS entered into settlement agreements that were very generous to utilities, not to Vermont’s residential utility customers. The report also found that the Department entered into numerous settlement agreements with Vermont utilities that shifted a considerable amount of financial and regulatory risk away from these regulated electric and natural gas companies and onto ratepayers. The report was prepared by a consulting firm that has participated in over 500 regulatory proceedings in over 20 states for ratepayer advocates around the country.
“Public trust in the regulatory process has deteriorated and ratepayers continue to carry an unfair burden of cost and risk while utilities expand and reap considerable profits,” said Greg Marchildon, AARP Vermont state director. “Our legislature needs to take action to create a consumer advocate function that truly represents the interests of ratepayers,”

AARP’s report is also very critical of a self-assessment report just released by the Department as required by the legislature in the 2015 session. The DPS self-assessment report, unsurprisingly, found that there was nothing wrong with its past regulatory actions, and that public outcry and criticisms regarding its prior actions before the state’s utility regulators were nothing more than a public perception problem. The Department’s report also took issue with the public’s belief that their mission should be focused on residential and small commercial ratepayers, and instead, concluded that their mission rests with balancing the interests of Vermont as a whole. “This conflict highlights the need for the legislature to take action to clarify the mission of the ratepayer advocate and consider options to separate this important consumer protection function from that of the DPS’s mission of energy policy and planning,” said Marchildon.

The AARP Vermont commissioned report challenged the findings of the DPS self-assessment, and its revisionist interpretation of its mission as being akin to “anything that is good for utilities, is good for Vermont.” The AARP report highlighted in several places where the DPS was simply confused about who it was actually representing; in other places, the DPS report was simply contradictory, and yet in others, the legislatively-mandated report clearly highlights an agency that is beyond repair. The Department’s self-assessment shows that it simply “does not get it” and is quite satisfied with maintaining the status quo.

The AARP report recommends sweeping changes in the mission and organization of ratepayer advocacy in Vermont. “No other state in the U.S. has a ratepayer advocacy office that has a mission, nor is organized, in a fashion comparable to Vermont,” said Marchildon. “Our report recommends starting fresh by eliminating the DPS’ entire ratepayer advocacy function, and creating a new independent Ratepayer Advocate and Office of Ratepayer Advocacy dedicated to forcefully advocating for Vermont residential and small commercial utility customers -- including low-income and disadvantaged utility customers most impacted by high utility prices,” he stated.

A key recommendation is the establishment of a volunteer-based oversight committee, or board of directors, comprised of individuals representing differing residential and small commercial ratepayer interests, to create greater accountability on the new ratepayer advocate’s actions. This new oversight committee, or board, would consist of individuals appointed by elected leaders throughout government, not just the Governor.

“By all accounts, we have a broken system that time and again favors large utility companies at the expense of ratepayers,” said Marchildon. “Significant reforms are necessary in order to begin the process of restoring the public’s trust in the state’s ratepayer advocacy activities and ensuring that their voices are heard loud and clear before Vermont’s utility regulators.”

Full report: AARP-Response to DPS Report_2-24-2016