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News Analysis

But the governor gets burned in the fallout.
Fortnightly Magazine - July 1 2000

News Analysis


Questar Gets Its Way in Utah


But the governor gets burned in the fallout.

Utility regulation almost never enters the public consciousness . But when it does, it most certainly means trouble for politicians. Consider Utah's governor, Mike Leavitt. As spring turned to summer, he found himself driven into a corner. And Questar Corp., the apparent winner in the melee, helped put him there.

The debate hardly seemed worth the trouble-an arcane piece of legislation dealing with the powers of the state public service commission (PSC) and the representation of consumer interests-an issue so technical as to offer little in the way of political upside. But add in the appearance of a conflict of interest and watch how the screw turns. Leavitt first recused himself, refusing either to sign or veto the measure, which allowed the bill to become law under Utah practice. Yet even that retreat was not enough. Though the law was set to become effective only after the passage of a year, the uproar simply would not die-especially since, as time passed, it appeared that Questar and its stockholders were reaping all the profits. That left some to say that Leavitt's political future and that of several legislators hung in the balance, forcing the governor to take the offensive, promising to make PUC reform a top priority in the coming year and even to call a special session of the legislature, if that's what it takes.

All this over obscure legislation known simply as House Bill 320.

Lobbying to Reduce Consumer Clout

State legislator David Ure sponsored HB 320, though the bill was drafted by Questar in response to what company management felt was a tough regulatory climate that drove down the company's stock price. Apparently, the utility and others felt the PSC had become bogged down and could not respond fast enough to utility hearing requests to accommodate a more fast-paced competitive environment. A part of the problem, various PSC critics contended, was that the proceedings at the PSC had become too adversarial, especially because of the interference by the Committee of Consumer Services. That consumer watchdog intervened in cases to represent consumer interests. It was created in 1977 and regularly took part in rate cases to ensure that utilities weren't overcharging for services.

The solution in HB 320, offered by Questar and backed by US West and PacifiCorp, was to abolish the Committee of Consumer Services. It was to be replaced by the new Office of the Public Advocate, created from the blending of some functions of the former Committee and the state Division of Public Utilities. HB 320 calls on the new Office of Public Advocate to balance the interests of consumers and utilities before taking a position, rather than advocating for the consumer.

Of course, the real result of the proposed demise of the Committee of Consumer Services, depends on who you ask. Utility lobbyists and pro-utility legislators argue that the result would be streamlined utility regulation from elimination of inefficiencies and waste in the regulatory process. Consumer advocacy groups argue