Residential Utility Consumer Office and Residential Utility Consumer Board

The report addresses both RUCO’s and the Board’s effectiveness in ensuring that residential utility customers’ interests are protected. Regarding RUCO, the report found that RUCO is generally effective in advocating on behalf of residential utility consumers. A review of closed rate cases in which RUCO intervened since January 1995 showed that RUCO is often successful at having its position adopted by the Arizona Corporation Commission and limiting rate increases for residential consumers. Although RUCO has been effective thus far, a dynamic regulatory environment is heightening the need for greater emphasis on strategic planning and formal processes. Therefore, RUCO should develop a comprehensive strategic plan and formalize its processes for determining in which rate and non-rate cases to intervene and for evaluating the effectiveness of its intervention efforts. The audit also found that stronger fiscal monitoring is needed for RUCO to accurately determine its annual assessment. For the past few years, RUCO has incorrectly calculated its annual assessment, which has created a large and unnecessary fund balance. The report recommends that RUCO strengthen its financial practices to ensure that it accurately determines its assessment and that monies are properly assessed, collected, and deposited.

Finally, the report discusses the Board’s inability to effectively fulfill the requirements of its statutory mandates. While statute requires the Board to advise RUCO on rate cases, the Board’s efforts in recent years have had minimal impact. The Board has suggested it can best serve the public by advising it of cases under review by RUCO and advising RUCO of consumer concerns or questions. However, it has taken few steps to effectively fulfill this role. Additionally, inadequate processes and information have contributed to the Board’s limited ability to assist in the preparation of RUCO’s budget and to review court actions filed by RUCO. Therefore, the Board should work with RUCO to develop and implement various processes that will enable it to better fulfill its responsibilities.