The prices of utilities — including electricity, gas and water — are becoming major pressure points for Pennsylvanians. Gov. Josh Shapiro has made fighting spiking energy costs a signature issue, and Pittsburghers recently waded into the fray by adding a ballot referendum which, if approved, would bar Pittsburgh Water from privatizing.

Now the Commonwealth’s main consumer advocacy office lost its leader. The Republican Attorney General-elect Dave Sunday had asked the head of the Office of the Consumer Advocate (OCA) to reapply for his job or resign, something never done before when the Attorney General changes.

In his resignation letter, Patrick Cicero pointed to what he called the “public campaign led by various investor-owned utilities to seek my removal.” That campaign and Sunday’s demand “cannot be separated,” he wrote.

“Collectively,” he continued, “they challenge the integrity and independence of the office and erode the public trust in the impartiality of the regulatory process and signal a concerning shift, where public accountability and consumer protection are subordinate to corporate interests.”

He asked Mr. Sunday to “publicly affirm your commitment to ensuring that the consumer’s voice is heard and respected in all utility matters and to appoint an independent Consumer Advocate with no ties — directly or indirectly — to the regulated utility industry.”

Now, the public must closely monitor the selection process of Mr. Cicero’s successor, and ensure that the state Senate approves someone committed to protecting consumers and not serving private utilities.

HIGHLY TECHNICAL

The Pennsylvania Public Utility Commission (PUC) is tasked with balancing the needs of utilities with the needs of their customers. As monopolies, public utilities like Pittsburgh Water are not affected by market competition, but must collect enough public money to competently run and improve their systems. The fair rate that consumers must pay is an ongoing negotiation.

Any utility with plans to merge with another, close down, raise rates or alter its services must receive PUC approval. Alongside managing 9,000 separate entities, PUC also handles some gas well fees, oil pipeline safety inspections, railroad track inspections and sets local telecommunications service rates.

When utilities, business owners or consumers inevitably disagree during all of these transactions, PUC officials known as administrative law judges oversee the debates. After months of highly technical proceedings detailing the views of all sides, judges give their recommendations about how to best move forward.

The problem for consumers is that utilities have all the incentive and resources to hire attorneys, regulators and experts to make their case before the PUC. Consumers, who are not as organized as the utilities, have less financial reason and limited resources to fight back.

A STRONG ADVOCATE

This is where the Office of the Consumer Advocate, and its attorneys and experts, comes in, representing average utility users not just in disputes with PUC, but in state and federal courtrooms, too. All litigation regarding utilities benefits consumers by offering them OCA representatives and support.

By law, all OCA staffers must be solely dedicated to consumers through their work experience or training. No retired regulators or utility lobbyists are allowed. The lead Consumer Advocate may not run for public office or take a job with a utility for two years after finishing a term.

In the office’s latest report, the OCA said that Pennsylvania consumers saved nearly $153 million a year because of their work in negotiating rates.

Mr. Cicero, by all accounts, was a strong consumer advocate. He fought hard against raising utility rates, and opposed the privatization of water utilities. In general, he was against investor-owned utilities (the practice of private companies acting as public utilities), and for good reason.

Recent evidence, including a 2022 study published in Water Policy which reviewed the 500 largest U.S. water systems, found that annual water bills were an average of $144 higher in private systems than public — even after controlling for factors like the regulatory environment and supply and demand.

His allegation that investor-owned public utilities working with the new attorney general forced him out of office should alarm all Pennsylvania utility users.

AN INDEPENDENT OCA

There’s no way to know whether all of Mr. Cicero’s advocacy ideals would actually improve Pennsylvania utilities. Among thousands of possible U.S. case studies, privatized water systems have reliably been proven to raise rates, while public systems have frequently been mismanaged.

What’s more important is heeding the warning from a career public servant that investor-owned utility companies are attempting to infiltrate the only office solely dedicated to utility consumers.

We cannot judge the accuracy of Mr. Cicero’s allegations, but the public must take notice of the possible threat to the OCA’s independence. Mr. Sunday would reassure those concerned by following Mr. Cicero’s plea in his resignation letter to appoint “an independent Consumer Advocate with no ties — directly or indirectly — to the regulated utility industry.”

In a perhaps hopeful sign, Mr. Sunday appointed as interim Consumer Advocate the present Senior Assistant Consumer Advocate, Darryl A. Lawrence, who has worked for the OCA for two decades. He is now in “the open process of engaging with qualified candidates.”

We hope the candidate appointed will be independent as well as qualified. The state Senate must ensure the appointee’s independence before confirming them.

— Pittsburgh Post-Gazette via TNS