Editorials |
Article published Saturday, November 1, 2003 Watchdog or lapdog?
As Consumers’ Counsel of Ohio, Robert Tongren
usually is referred to as a "watchdog" for the public on electric
rates and other utility matters.
Now, in a case involving
FirstEnergy, parent to Toledo Edison, and the controversial 2001
electric deregulation deal, there are accusations that Mr. Tongren
is less the diligent sentry on behalf of consumers he pretends to be
and more of a lapdog, who consorts cozily with lobbyists for the
utilities.
The resulting flap triggered hearings by the
Senate Public Utilities Committee and an investigation by the state
Inspector General to determine if any laws were broken.
The
inquiry is well justified. It could shed some light on the necessity
for the Office of Consumers’ Counsel, which has 74 employees and
will cost the state $9.3 million this year. Should taxpayers be
subsidizing an expensive watchdog - Mr. Tongren is paid more than
$130,000 a year - who isn’t genuinely looking out for their best
interests?
For his part, Mr. Tongren says he has saved
utility consumers $1.7 billion during his tenure and has no
intention of quitting, as some consumer advocates have
suggested.
At issue is a three-year-old report by a Boston
consulting firm, which is said to have determined that FirstEnergy
was due less than half of the $8.7 billion in so-called "stranded
costs" it was awarded by the Public Utilities Commission of Ohio to
recoup its investments, chiefly in the cash-draining Davis-Besse
nuclear power plant.
Mr. Tongren never made the report
public. He said the document, which cost the state nearly $580,000,
was thrown out in the trash in August, although a copy finally was
located last week.
Meanwhile, a second report, prepared by a
Colorado firm, has been released by the PUCO. That consultant also
recommended that FirstEnergy be allowed to charge its customers
about $4 billion in stranded costs.
But when the deregulation
deal came down from the PUCO, the advice of both consultants was
ignored. FirstEnergy got most of the $12 billion it originally
wanted, in exchange for reducing rates by 5 percent and a rate
freeze through the end of 2005.
Mr. Tongren’s position is
that he went along with the $8.7 billion settlement because he knew
he would be overwhelmed by FirstEnergy’s legal resources. That’s a
toothless excuse. Isn’t a watchdog supposed to at least snap and
snarl?
With electric rates due to be deregulated in 2006, the
likelihood is that consumers will be in for sharply higher bills. If
ever there were a need for a pit bull on behalf of residential
ratepayers, this is the time.
In what looks like a
pre-emptive strike, FirstEnergy has filed a request with the PUCO
that essentially would allow it to continue charging the equivalent
of its stranded costs in exchange for continuing the rate freeze.
The company cleverly calls its proposal a "rate stabilization
charge."
So, instead of lower rates as promised by proponents
of deregulation, the choice for home customers could be charges that
remain high - or maybe go even higher.
Deals like that -
which still must get by the PUCO - raise the question of whether
Ohioans even need a consumer watchdog, especially one on so short a
leash.
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