Gov. Lee Dreyfus signs into law legislation creating the state Citizens Utility Board in 1979. To the left of Dreyfus is Jim Wahner, who championed the group as Assembly majority leader.
Forty years ago this year, Wisconsin got the nation’s first direct consumer advocacy group to argue on behalf of utility customers. For the first time, taxpayers had someone in their corner to push for lower gas and electric rates. The Citizens Utility Board had its “ups and downs” over the years, as the legislator who helped midwife the group puts it, and its influence has waned. But the Madison-based organization is on a campaign to rebuild its membership and reinvent its operating model.
“We want to be a stronger voice,” Tom Content, executive director for the organization, tells Isthmus. “My vision will be becoming more proactive, not just reactive.”
Tom Content, who was named CUB executive director two years ago: “We want to be a stronger voice.”
Just in the last decade and a half, CUB claims savings for ratepayers totaling nearly $3.4 billion from its challenges to utility rate increases before the Wisconsin Public Service Commission. Its 2018 track record includes negotiating a settlement that cut Madison Gas & Electric rates, Content says. Yet, he and other CUB leaders say, they’ve done so even as they’ve been hobbled by funding cuts and dwindling membership.
CUB was a logical extension of a much earlier Wisconsin Progressive innovation — state regulation of the burgeoning utility industry, dating back to 1911, points out Joel Dresang, a CUB board member. That was the year the state PSC was founded to regulate monopoly providers of electrical power and other public services that lacked conventional markets with competing providers.
The PSC, and agencies modeled on it in subsequent states, gained the power to set utility rates, hold public hearings for consumer input, and hire independent staff to assess the claims of utilities asking for rate hikes. Utilities were granted a monopoly and assured a guaranteed rate of return in exchange for rate regulation.
By the 1970s it became clear that while utilities themselves and their biggest industrial customers had plenty of opportunity to shape the outcome, homeowners, small businesses, and family farmers, among others, were all but shut out.
Consumer advocate Ralph Nader first proposed the idea of CUB to Assembly Majority Leader Jim Wahner, a Milwaukee Democrat, shortly after the 1976 elections. He suggested creating a state-mandated, but citizen-driven, organization to represent the interests of ordinary ratepayers when utilities petitioned the PSC for rate hikes.
“The residential customer is completely outflanked by the attorneys, economists and other experts hired by utilities to represent them and their stockholders in PSC proceedings,” Wahner declared when he introduced a bill launching CUB in 1979.
That was Wahner’s second attempt to pass a bill. He introduced the first bill in 1977 and “the utilities went absolutely berserk,” Wahner recalled on April 7 at a CUB 40th birthday party that drew about 120 people to Milwaukee’s Lakefront Brewery. “Even though we had a progressive majority [in the Assembly] it was a really tough fight,” he added. The measure passed the lower house, but died in the state Senate.
The 1979 version passed both houses of the Legislature and Republican Gov. Lee Dreyfus signed it into law — an outcome that Wahner admits was anything but certain.
The law allowed CUB to enclose informational flyers in utility bills inviting consumers to join the new watchdog group. That helped the organization’s initial membership soar to at least 100,000 by the mid-1980s, according to a 1991 history of CUBs nationwide published by the Center for Public Interest Law. Similar groups were established in Illinois and California.
A 1986 Supreme Court ruling in a case filed against the California CUB blocked the practice of enclosing promotional material for the groups in utility bills as a violation of the utilities’ First Amendment rights. In Wisconsin, “it threw the organization for a loop,” Wahner tells Isthmus. Today, Wisconsin’s CUB has about 2,000 members.
Member dues aren’t the only resource CUB relies on. The PSC has an Intervenor Compensation Fund that outside groups, CUB as well as others, can draw on to pay for expert analysts when challenging utilities. And in 2009, the state Legislature under Democratic control passed a law authorizing the PSC to grant up to $300,000 a year to “a ratepayer advocacy nonprofit” — money that went to CUB.
In 2015, the Republican Legislature cut the intervenor fund to $371,200 from $1.042 million and zeroed the separate $300,000 PSC grant. The cuts forced CUB to downsize from four employees to two and a half positions. The 2017 budget restored the $300,000 grant and partially restored the intervenor funds, to $742,000.
Also in 2017, CUB hired Content — who had covered the utility industry for the Milwaukee Journal Sentinel — as its new executive director. Since taking the job, the former journalist has embarked on a reboot for the consumer watchdog group, shoring up membership and devising a new business model.
Under Content, CUB is courting more small business members. It’s also hired a staff analyst — a former PSC employee — rather than having to contract with outside experts to support the positions it takes before the commission. Thanks to the in-house expertise, “we got involved last year in twice as many cases as we have in the past,” Content says.
Now the organization is on a campaign to recruit 50 more members by the end of June. The group asks members to pay what they can, either with one time or monthly donations.
And Content sees no shortage of issues to take on. Besides the MG&E rate cut last year, the group won a settlement with Alliant Energy that kept both rates and the fixed monthly customer charge at Alliant’s Wisconsin Power and Light utility from increasing.
CUB is also looking at Milwaukee-based We Energies, which it claims has rates that are the seventh-highest among 50 Midwestern utilities. So the group is challenging We Energies’ recent rate petition seeking $650 million, plus a guaranteed 10 percent profit, to offset the cost of a coal-fired electric plant in Kenosha County that the utility shut down in 2018 because of decreased demand. “Money for nothing,” Content calls the demand.
Wahner, at CUB’s 40th birthday party, sounded an upbeat note about the organization’s new turn, and about Content’s early record at the helm.
“I’m really excited about it,” Wahner tells Isthmus. “You’ve got to get out and stir people up and beat the bushes and get the word out — and that’s what he’s doing.”
[This article has been edited to reflect that Jim Wahner was the Assembly majority leader in 1979, not the Assembly speaker. The story originally stated that CUB was funded by a fee charged to utilities, which is incorrect.]
