Office of Public Counsel: new kid on the utility block

When Commonwealth Edison Co., the state's largest utility, along with Republican Gov. James R. Thompson and Democratic Atty. Gen. Neil F. Hartigan unveiled a controversial electric rate plan December 19, consumer groups screamed foul. They found an ally in a new and little-known state agency, the Office of Public Counsel, a creature of the 1985 utility reform act. At issue in the rate plan is how much of the $7.1 billion cost of three nearly completed Com Ed nuclear power plants will be paid by the utility's customers. After secret negotiations with Thompson and Hartigan staffers, Com Ed offered a proposal that would boost rates 9.6 percent, then freeze them for five years, if the Citizens Utility Board (CUB) and other consumer groups would agree to drop challenges to rates and construction of the three plants. Com Ed would transfer the plants — Braidhood Units I and II and Byron Unit II — to a subsidiary responsible to the Federal Energy Regulatory Commission instead of the Illinois Commerce Commission (I1CC). Proponents say the plan would stabilize rates, particularly for businesses. Opponents counter that customers will end up paying for nuclear plants that are not needed. Gov. Thompson wants the IlCC to decide by July, although the IlCC had planned final consideration for September.

The announcement of the proposal sparked a series of negotiation sessions between Com Ed and consumer groups. After aiding CUB and others in the negotiations with Com Ed, the Office of Public Counsel joined them in rejecting the proposal. Public Counsel Stephen J. Moore filed a motion with the IlCC against the proposal on February 9, shortly after Com Ed withdrew from the negotiations. Moore questioned the comission's power to transfer control of the three unfinished nuclear plants to a subsidiary outside its control. The Com Ed case pits the Illinois Public Counsel Moore against the governor and the attorney general, the state's two highest elected officials. In the ensuing brouhaha, however, media attention focused not on Moore but on Howard Learner, feisty president of CUB, a "cousin" organization to the Office of Public Counsel. That may be because few outside state government or the public utilities field have heard of the office. Most Illinois citizens would probably have a hard time discerning from its title what Moore's Office of Public Counsel does. Could it be an office of ombudsmen? A pack of public defenders? A clique of counselors?

Despite its vague name, the Office of Public Counsel has a clear mission, according to Moore. An independent agency, it represents all customers of gas, water, and electric and telephone utilities. The office argues the consumers' case before the IlCC, the Federal Energy Regulatory Commission and federal and state courts. As it did in the Com Ed negotiations, it also provides financial analyses and other expertise to private consumer groups. Moore explained that he and his staff gather and analyze information on public utility rate hike requests, regulation changes and so forth. Then, they present their findings, in hearings or in legal motions, to courts and regulatory agencies.

The office was created as part of the 1985 reform of the Public Utilities Act. Sen. Dawn Clark Netsch (D-4, Chicago), principal sponsor of the bill, said the office was established because there was "a strong feeling that there needed to be a strong voice to challenge the rate requests made by public utilities, especially before the I1CC." Gov. Thompson's staff includes the Office of Consumer Services, which is not directly connected to any agency. It also participates in I1CC and court hearings on behalf of consumer groups, but Netsch said the bill's supporters wanted an independent, "free-standing" agency. "One problem with utility regulation is the utilities have access to enormous resources" in economic, technical, and other areas, compared to consumer groups, Netsch explained. Proponents wanted the new Office of Public Counsel to provide balance through a "more aggressive, upfront approach for the [utility] users."

The Joint Committee on Public Utilities Reform, which drew up the bill, heard testimony from Florida's public counsel and modeled the Illinois office after his, according to former joint committee staffer Jeff Paulson. The joint committee proposed a "well-funded" public counsel's office in Illinois to "try to depoliticize the consumer advocacy role, [and] centralize it within the state," Paulson said. The governor's Office of Consumer Services and the attorney general's public utilities division tended to be affected by political currents, Paulson explained. And CUB, the advocacy group established by the General Assembly in 1983, does not represent all ratepayers, he added. Instead, CUB serves 170,000 individual and small business ratepayers who finance the organization through membership fees. When the General Assembly hammered out details of the utility reform bill two years ago, many legislators wanted the public counsel to serve as a consumer advocate who could inform the legislature on utility issues, according to Greg Bush, the joint committee's staff director. They wanted the legislature to appoint the public counsel, who would be responsible to it in a way similar to the auditor general. But Bush, now a Springfield attorney, recalled that other legislators felt this arrangement would be unconstitutional. Eventually lawmakers gave the governor the power to appoint the public counsel, but with the protection of a five-year term.

Some consumer advocates questioned the need for the office when it was created two years ago.

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Steve Banker, of the Herrin-based Southern Counties Action Movement, said his group tends to work closely with the governor's Office of Consumer Services. When the legislature set up the Office of Public Counsel, "my feeling was, if it ain't broke, why fix it? I felt the [Office of Consumer Services] was just fine." Because of its structure, he added, it is more accountable to "grass roots" organizations like his.

The two organizations play different roles in I1CC and other hearings. The legal structure of the governor's Office of Consumer Services bars it from representing itself in hearings, Banker explained. Instead, it represents consumer groups, individuals, municipalities and other aggrieved parties. Director Al Grandys has worked with Southern Counties Action Movement and other consumer groups in various ways, such as developing testimony for hearings, Banker said.

The Office of Public Counsel, however, approaches hearings differently. "They kind of represent themselves, and I'm not really comfortable with that," Banker said. "It pretty much distances the experts from the public."

When the joint committee proposed the public counsel, it also initially recommended the elimination of the governor's and attorney general's utility operations because the three had "parallel functions," according to Bush, the joint committee's staff director. Thompson and Hartigan "gave communication" that they would eliminate their utility divisions halfway through fiscal year 1986, he said. Yet those offices continue to function today. Bush speculated that the governor's Office of Consumer Services and Hartigan's division of public utilities escaped oblivion for several reasons: the general difficulties in taking apart a government agency; the current litigation those offices would have to abandon; "the egos involved" since bureacrats tend to have an "office identification"; and the needs of Thompson and Hartigan for advisers on the Com Ed deal and other utility matters.

But John McCaffrey, director of the attorney general's public utilities division, said the General Assembly would violate the state Constitution if it attempts to rearrange Hartigan's office staff. "The legislature, through its action, cannot limit the attorney general's constitutional power to represent the people of Illinois." In addition, he said, a "legal question" may arise over whether the public counsel, "without the expressed approval of the attorney general," can represent Illinois ratepayers.

Grandys, director of the Office of Consumer Services, said he was unaware of the recommendation to eliminate his office, which never appeared in the Joint Committee's final report. The notion that the public counsel and his office share parallel functions is "as far from the truth as you can get," he said. Grandys added that his office represents Thompson in utility hearings as well as consumer groups like the Southern Counties Action Movement.

The Com Ed case, in which the public counsel took a different position from the governor's and attorney general's utility advocates, is seen by some as justification for its existence. "[That case is] probably a good reason why there should be three" consumer agencies, according to John Cameron, program director for the Illinois Public Action Council, another private consumer group. At least one of the three oppossed the deal, Cameron said, because each is responsible to different people. "It could have been a different story if they were consolidated and chosen in a different way." since the consolidated agency probably would have supported Thompson and Hartigan, he said.

That leaves the public counsel as the new kid on the block. Thompson announced his appointment of Moore to the post in December 1985; Moore assumed his duties as public counsel on January 1, 1986, and was confirmed by the Senate last April. Moore grew up in Arlington Heights, graduated from the University of Illinois law school in 1977 and began his legal career with the Land of Lincoln Legal Assistance Foundation. In 1980 he became managing attorney of the Bloomington office of the Legal Services Organization of Indiana.

Two years later Moore joined the Illinois Attorney General's Office, serving as an attorney in the public utilities division in Chicago until he was named public counsel. For fiscal year 1988 his office has a proposed budget of $632,200 — a drop in the state government's $20-billion-plus bucket. It pays for a 12-person operation, including four other attorneys, two public utility analysts and five secretaries. In the current fiscal year the public counsel is involved in 24 cases before the I1CC, two before federal regulatory agencies and two before state and federal courts. In one of the biggest of these cases, the office filed last October a motion with the I1CC to lower the rates of all the state's gas and electric utilities and six telecommunications carriers. The office wanted to force the utilities to pass on to consumers their savings from the new federal tax code. Moore estimated that if the IlCC agrees, ratepayers would save up to 7 percent on their utility bills, a total of at least $844 million annually. The public counsel asked the commission to rule on its request before July 1, when the new federal tax rates go into effect.

The work of Moore and his agency on cases like these has earned him praise from Sen. Netsch, CUB president Leaner and others involved in public utilities issues. "As far as I can tell, he's doing a good job," Netsch said. Though she doesn't keep close track of the office, she said its casework so far "has very much reflected what I hoped they'd be doing when we created the office."

According to former joint committee staffer Paulson, "some on the consumer side [of the Edison negotiations] have criticized them for being too cautious, but that's the right approach for a new agency." Moore himself "is not tied with the Demoocrats and the Republicans; he doesn't know anybody [politicians] personally, so he can't compromise the office for political reasons," Paulson said. "He's not going to do anything that isn't well justified and well thought out."

Former utility joint committee staff director Bush believes Com Ed pulled out of the negotiations because the company felt it could get more from the I1CC than from the consumer groups. "They [Com Ed] think they can beat Stephen Moore and everyone else when it comes to arguing within the framework of the Public Utilities Act," Bush said. In the Com Ed case, Moore may face the sternest test of the effectiveness of the office that reformers created.

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