Your Power Bill Is Going Up, So Here Is How to Speak at the Rate Case

Every American has screamed at an electric bill. Almost none of us have screamed at the people who wrote it. That is a shame, because those people hold a meeting, in public, with a court reporter, and they are legally required to listen. You are invited. Nobody ever tells you.

Here is the arrangement. Your electric company is, in most places, a regulated monopoly. You cannot shop for a second set of wires to your house, so the state steps in and says: you may have the franchise, and in exchange we will review what you charge. That review is called a rate case, and it is the one place in the whole electricity business where a retired schoolteacher and a utility's lead counsel are, on paper, in the same room. Let me show you how to walk into it.

This is a how-to, so the steps are plain and exact. But I will say up front why a conservative should care. Government that is far away is government that is unaccountable, and a rate case is government set in a small hearing room in a state capital that most of its customers could not find on a map. The fix for distant government is not to complain louder. It is to show up. A body that decides what your family pays for a necessity of life should hear from the family.

What a rate case actually decides

Start with the definitions, because the jargon is where citizens get lost.

• Public utility commission (PUC). The state agency that regulates investor-owned electric, gas and water utilities. Some states call it a public service commission or a corporation commission. Its members are appointed or, in a few states, elected.
• Rate case. A formal proceeding in which a utility asks the commission to approve new rates, and the commission decides how much of the request is justified.
• Docket. The case file. Every rate case gets a docket number, and every filing in it, from the utility's application to your two-paragraph letter, lands in that file and is public.
• Revenue requirement. The total money the utility is allowed to collect from customers in a year.
• Rate base. The value of the plant and equipment the utility has put into service to serve you: power lines, substations, meters, generating plants.
• Rate of return. The percentage the commission allows the utility to earn on the rate base, which includes the profit it may earn for its shareholders on the equity portion.

The core formula is short. The revenue requirement is the utility's operating expenses, plus depreciation, plus taxes, plus the rate base multiplied by the allowed rate of return. Everything in a rate case is a fight over one of those pieces.

Here is a hypothetical, with invented round numbers, so you can see the machinery. Say a utility's rate base is $2,000,000,000 and the commission allows a return of 7 percent. That is $140,000,000 a year on the investment alone, since 2,000,000,000 times 0.07 is 140,000,000. Now say the utility asks to add $200,000,000 of new equipment to the rate base. At the same 7 percent, that adds $14,000,000 a year to what customers pay for the return, before depreciation and taxes. Every dollar in the rate base is a dollar customers pay a return on, every year, for as long as it stays there. That is why the question "was this investment necessary and prudent?" is the most important question in the room.

Courts have long recognized the bargain underneath all this. In Munn v. Illinois (1877), the Supreme Court held that businesses "affected with a public interest" could be regulated as to their rates. A century and a half later the premise is the same: if the state grants a monopoly, the state must make sure the monopoly does not charge whatever it likes.

The strongest case for staying home

Let me steelman the reader who says this is pointless. One: the utility has full-time lawyers, economists and engineers, and you have a Tuesday evening. Two: the commission's decision turns on technical testimony about depreciation lives and cost allocation, not on whether your bill hurt. Three: public comments are a small slice of the record, and commissioners are bound to decide on the evidence in the docket.

Each point has some force, and I will not pretend otherwise. But they prove less than they seem to. A commission that decides on the record can only consider what is in the record, so an empty record favors whoever filled it. Public comment is read by commission staff and often by commissioners themselves, and it tells them what the people actually experience: whether service is reliable, whether the bill is unaffordable, whether the utility's customer service is a punchline. And the technical fight is not closed to you. Staff and consumer advocates do that work on behalf of customers, and they are better at it when they know which questions the public cares about. The customer who shows up is the one who makes the professionals earn their keep.

Step one: find your commission and the docket number

Start with your electric bill. Find the name of the company. It may be an investor-owned utility, a municipal utility run by your city, or an electric cooperative. This matters. Investor-owned utilities are almost always regulated by the state PUC on rates. Municipal utilities and many cooperatives are governed by a city council or an elected board, and in many states the PUC does not set their retail rates at all. If you are served by a city or a co-op, your venue is a board meeting, and the steps below still work, only with a different building.

For an investor-owned utility, search the name of your state and the words "public utility commission" or "public service commission." The commission's website will have a section called something like "dockets," "e-filing," "cases" or "pending proceedings." Search it by your utility's name and the words "general rate case," "rate increase" or "revenue requirement."

When you find the case, write down three things: the docket number, the name of the presiding officer (often an administrative law judge or hearing examiner), and the schedule. A rate case runs on a procedural calendar with dates for testimony, hearings and the decision. Many states set a statutory clock for the decision, so the process has a beginning and an end. If you miss the window for comment, you have missed the window.

Also look at the notice. Utilities must notify customers of a rate request, often by a bill insert or a newspaper notice. Most of us throw it out with the coupon mailer. Go and find the one you threw out.

Step two: read what the utility actually asked for

Open the docket and find the application and the prepared direct testimony. You do not have to read all of it. Read the following, in this order.

1. The summary of the request. It will say how much additional revenue the utility wants and what it says that means for a typical residential customer. Compare the utility's framing with the arithmetic.
2. The list of major capital projects. This is the rate base growing. Ask of each one: what was it for, what did it cost, and was a cheaper alternative on the table?
3. The requested return on equity. This is the profit the utility asks to be allowed. Commissions often award less than requested. The testimony will explain the method.
4. The rate design. This is how the total is divided among customer classes and between the fixed monthly charge and the per-kilowatt-hour charge. A rise in the fixed charge hits low-usage households, including many seniors and apartment dwellers, harder than a rise in the energy charge would.
5. Riders and trackers. These are separate line items that let a utility recover specific costs, such as fuel or storm damage, between rate cases. They are legal, and they deserve a look, because they let some costs reach your bill without a full case.

Then read the staff testimony and the testimony of any intervenor. Commission staff are the commission's own experts, and their recommendations often differ sharply from the utility's. When staff say a requested return is too high, or that a project was not shown to be prudent, you have an ally with a docket number. Quote it in your comments.

A word on a term you will see: used and useful. For many years the standard in ratemaking has been that a utility may earn a return on plant that is actually serving customers, and not on plant that was cancelled or never needed. How a state applies it for plants under construction varies. If you see a charge for a project that is not yet running, ask whether your state allows early recovery and under what rules.

Step three: sign up to be heard

There are usually three doors, and you can use more than one.

• Public comment in writing. Most commissions accept comments by an online form, by email or by mail, referenced to the docket number. Comments become part of the public file. This is the lowest-effort route and the one with the widest reach.
• A public hearing. Many commissions hold public hearings in the utility's service territory, in the evening, so customers can testify. Sign up in advance if the notice requires it, and arrive early. A typical slot is a few minutes, so write out what you will say and time it. Testimony at a public hearing is generally taken as a public statement and made part of the record. Ask the presiding officer how it is treated.
• Formal intervention. A person or group can ask to become a party to the case. A party can file testimony, question witnesses and appeal. It takes procedure, deadlines and often a lawyer, so it suits a neighborhood association, a business group or a coalition more than an individual. If you are part of a group of ratepayers, ask whether it should intervene.

Check your commission's site for a section on "public participation" or "how to comment." It is usually there, and it is usually written in English.

Step four: call the consumer advocate

Many states have an office whose whole job is to represent residential and small-business customers in rate cases. Names vary: consumer advocate, public counsel, ratepayer advocate, office of people's counsel. If your state has one, it is the single most useful phone call you can make. The advocate has lawyers and experts, files testimony, cross-examines the utility and often negotiates settlements.

Ask three questions. What is your position in this case? What are the main issues for households? What would help most from public comment? An advocate who tells you the fight is over the return on equity, or over a particular plant, has just told you what your comment should be about.

If your state has no such office, the commission staff's consumer services division can answer procedural questions, and the state attorney general's office sometimes plays the role. Your state legislature's website will tell you which.

Step five: write comments that get read

Here is where the lighter touch of a how-to gives way to a bit of craft. Commissioners and their staff read hundreds of comments. These are the ones that do some work.

1. Lead with the docket number and the one-sentence position. "I am a residential customer in the utility's territory, and I oppose the requested increase in the fixed monthly charge." Do not make the reader hunt for your point.
2. Be specific about the line you are contesting. "The rate base" and "the return on equity" are ideas a commission can act on. "Everything costs too much" is a feeling.
3. Use the record. Cite staff testimony or the utility's own filings by name. A comment that says "staff's witness recommends a lower return, and I ask the commission to adopt it" is stronger than an unsupported complaint.
4. Describe the effect on a household, truthfully. Your own bill is evidence of what you experience. State it without exaggeration. Do not guess at numbers you have not seen.
5. Ask for something the commission can grant. Reduce the request, reject a particular project, keep the fixed charge where it is, require a reliability report as a condition. The commission cannot repeal the weather, and it cannot change the federal tax code.
6. Keep it short and civil. One page is plenty. A commissioner will not be moved by an insult and may be moved by a clear request.

The conservative case against a rate increase is not that profit is evil. Profit is how capital gets raised, and a utility that cannot earn a fair return cannot build the lines that keep your lights on. The case is that a monopoly should earn what a competitive firm would earn, no more, and that every dollar in the rate base should have been prudently spent. Put that in the language of the docket and you are making the argument the commission is paid to weigh.

Step six: know what else is on the table

A rate case is not only a fight over a number. A few issues routinely ride along, and they deserve a line in your comment if they matter to you.

• Generation choices. If the utility proposes a new plant or the early retirement of an existing one, the case may decide whether you pay for a plant that still works. Reliability and cost belong in the same sentence. See how Seven Things People Said About the Texas Blackout of 2021, Tested tests the claims people make about grid failure, and Count Deaths per Unit of Power and Nuclear Beats Nearly Everything Else for the safety numbers on one option.
• Cost allocation. Who pays for the grid's fixed costs, and in what proportion? Residential, commercial and industrial customers do not use the system the same way, and the allocation is a fight in itself.
• Fuel and purchased power. In many states these costs pass through to your bill with little markup, which makes the price of the underlying commodity matter. See Four Pieces of Every Gallon and Why the President Controls the Fewest for how a price breaks down into pieces and who controls each.
• New programs. Subsidized programs paid by all customers can raise the bill for those who do not participate. That is a fair question for a commission, and Twelve Questions About Rooftop Solar and Who Really Pays for Net Metering walks through one example.
• Speed. A project that takes a decade to permit costs money the whole time. We Raised the Empire State Building in About a Year, So Why Not a Power Line is a reminder of what we once did.

Step seven: follow the final order and the appeal

The case does not end when you hit send. After testimony and hearings, the commission, or a presiding officer whose recommendation the commission reviews, issues a final order. It will state what rates are approved, what the return is, and why. Read it. The order is the one document that tells you what happened to the arguments in the record, including the staff's and the advocate's.

Then check the options after the order.

• Rehearing or reconsideration. Most states allow a party to ask the commission to reconsider within a short deadline, often measured in days or weeks. Only parties can generally do this. If you are not a party, your advocate may be.
• Judicial review. A party that is unhappy with the order can usually appeal to a state court. Courts typically defer to a commission's findings of fact if they rest on substantial evidence, so appeals are decided on the record, not on fresh arguments. That is one more reason the record matters.
• Compliance filings. After the order, the utility files new tariffs that put the decision into effect. These are public, and they show when the new rates start.
• The next case. Utilities file again. The facts you learned about your docket, the names of the staff and the advocate, and the way the commission treated issues like the fixed charge are all useful the next time.

If you want to go further, the commission itself answers to the legislature, and in some states to voters. The statute that sets commissioners' terms, their duties and the ratemaking standard is on your legislature's website. Reading it is the Founding in miniature: power delegated by a law, limited by a law, reviewable by a court.

Why this is a conservative habit

Let me say plainly what this is about. Most of us have been taught that government is a thing that happens to us. A utility rate case is a counterexample sitting in plain view. It is administrative government, which conservatives are right to be wary of, and it is also a procedure with notice, a record, a hearing and a right to be heard, which are the things the administrative state tends to forget unless somebody insists on them. Due process is not just for defendants. It is for ratepayers too.

A commission that hears from no one hears from the utility. The utility is not a villain, and its lawyers are doing their job. But no institution on earth tends to under-serve itself in its own favor. The customer's job is to be the counterweight. That takes about an hour, a docket number and a decent cup of coffee.

For the larger lesson on why electricity costs what it does, see Hundreds of Millions Still Cook Over Wood, and That Is a Moral Question, and for what cheap, reliable power did for a region, Willis Carrier's Machine Remade the South, and Made the Case for Cheap Energy.

The case in brief

1. Your electric rates are set in a public rate case before a state commission, with a docket number, a record and a schedule, and ordinary customers are allowed to be heard.
2. The revenue requirement is expenses, depreciation and taxes plus the rate base times the allowed return, so the fight is over what went into the rate base and how big the return should be.
3. Read the utility's summary, its list of projects, the requested return and rate design, and then the staff testimony, which often disagrees with the utility.
4. Comment in writing, testify at a hearing, call the consumer advocate, or join an intervening group, and ask for something specific the commission can grant.
5. Read the final order, learn the deadlines for rehearing and appeal, and watch for the next filing.

What you can do: Search your state commission's website for your utility's name and "general rate case," write down the docket number and the comment deadline, and put them on your calendar.