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Activists say utilities outgunned consumers

Consumer activists said they lost the war of the utilities bills not because they were wrong, but because their opponents came to the fray armed with more money and bigger ammunition.

The battles unfolded on two fronts as the Legislature moved to pass bills fostered by two of Utah's big utilities: US WEST and Questar.The biggest was HB320, sponsored by Rep. David Ure, R-Kamas. Passed on the final day of the session, HB320 eliminates the Committee of Consumer Services, created to look out for consumer interests in utilities' rate-making cases. In its place will rise a hybrid of the committee and the Division of Public Utilities (which will also be dissolved), to be called the Office of the Advocate.

The bill also changes the way the Utah Public Service Commission handles its rate-making cases. The new language, which is to take effect in July 2001, encourages informal settlements between the PSC and utility company and stiffens the requirement for the PSC to consider certain factors when deciding a case.

Proponents of the bill, Questar foremost among them, said the current system is too adversarial. Questar Chief Executive Officer Don Cash blamed Utah's regulatory process for the natural gas company's declining market capitalization and investor flight. Had the bill not passed, Cash hinted the company may have to consider "making some changes," and he did not rule out leaving the state or selling off its Questar Gas subsidiary.

But consumer advocates claimed the bill was designed to remove small residential customers from the regulatory process, tipping the scales in favor of big business.

"It's atrocious," said activist Claire Geddes. "What you had was a utility company writing a bill and running it through the Legislature. They were the ones on TV and on the radio debating consumers. It wasn't the sponsor of the bill. It was the utility company."

US WEST marshaled behind its own bill, HB338 from Rep. Susan Koehn, R-Woods Cross. Though the final language is but a shadow of the draft versions floating around Capitol Hill at the beginning of the session, Koehn asserted the bill will still encourage competition within Utah's slowly deregulating telecommunications industry. HB338 sets a price floor on "wholesale" prices US WEST charges its customers and adds language allowing the company some pricing flexibility.

Even in its slimmed-down final appearance, critics of HB338 said the bill gave US WEST more power to dig into its customers' pockets.

In both skirmishes, proponents on each side came with evidence supporting their case. But consumers found the legislative forum gave utilities the advantage.

"The utilities found it much easier to present misinformation to the Legislature than they have had in presenting evidence to the Public Service Commission," said Jeff Fox, utility analyst for the Crossroads Urban Center. "This really illustrates how big money can control the Legislature."

Questar spokesman Chad Jones said the company committed resources and people to champion its cause because regulated utilities are governed by statute, rather than the competitive marketplace.

"The Legislature, with the laws they create, is our substitute for competition. They are Pepsi to our Coke. Sure, it's an intense 45 days, but this is the one time each year we can come up here to try to protect our business. It's our one shot."