I've been seeing a disturbing trend where utilities are adding environmental compliance riders without proper regulatory approval. MLGW here in Memphis tried to slip in a $2.3 million rider for EPA compliance costs that should have been recovered through base rates. The Tennessee Regulatory Authority hadn't approved any such rider. When challenged, they quietly removed it and issued credits. Everyone needs to be checking their tariff sheets monthly for unauthorized additions.
PSA: Watch for unauthorized environmental compliance riders
Randy, Idaho Power pulled the same stunt last year with a Clean Air Act compliance surcharge. They were collecting it for six months before anyone noticed it wasn't in the approved tariff schedule. The Idaho PUC fined them $125,000 and ordered full customer refunds. These utilities are getting bold about unauthorized charges.
This is exactly why I download and archive every tariff sheet update. Evergy here in Kansas tried to add a renewable energy compliance rider that wasn't approved by the KCC. I caught it by comparing the March tariff to February. They were collecting an extra $1.47 per month from residential customers for three months before I filed a complaint.
Wisconsin Public Service did this with a mercury emission compliance charge back in 2021. They justified it by saying the EPA deadline was so tight they didn't have time for normal rate case proceedings. The PSC didn't buy it and ordered immediate suspension of the rider. Utilities can't just make up riders because they're in a hurry.
Dominion Energy tried something similar in South Carolina with coal ash cleanup costs. They started collecting a Coal Ash Environmental Response rider six months before the PSC hearing was even scheduled. We caught them and they had to refund $18 million to customers. The arrogance of these utilities is incredible.
The problem is most customers never read their bills carefully enough to notice these unauthorized additions. The riders are buried in the middle of multi-page commercial bills or listed with vague names like "Environmental Recovery Charge" or "Regulatory Compliance Adjustment." We need to be the watchdogs because clearly the PUCs aren't monitoring this closely enough.
PPL in Pennsylvania got caught with an unauthorized storm hardening rider last year. They collected it for eight months before the PUC noticed. The excuse was that it was a "temporary emergency measure" but there was no emergency declaration and no PUC approval. They ended up refunding $7.2 million with interest.
Here's a tip: set up Google alerts for your utility's name plus terms like "rider," "surcharge," and "adjustment clause." That way you'll get notified when they file new ones or when there's news coverage. I caught CenterPoint trying to add an unauthorized grid modernization charge this way. The Houston Chronicle covered the filing before I even got the updated tariff sheet.
Vivian, that's an excellent suggestion. I'm also recommending my clients sign up for email notifications from their state PUC websites. Most commissions will email you when new dockets are opened or when utilities file rate changes. It's the best way to stay ahead of these shenanigans.
Georgia Power tried to implement an unauthorized solar program rider last year worth $4.1 million annually. They claimed it was approved under their renewable energy tariff, but that tariff had expired two years earlier. The Georgia PSC wasn't amused. These utilities are counting on customer apathy and regulatory oversight gaps.
TVA is notorious for this. They've added three different environmental riders over the past two years without proper Tennessee Valley Authority board approval. Because they're federally regulated, state PUCs can't do much about it. We had to go through the TVA's own complaint process, which is basically useless.
The Missouri PSC started requiring utilities to file a pre-approval notice 60 days before implementing any new rider or surcharge. It's cut down on unauthorized charges significantly. Maybe other states should adopt similar rules. Ameren hasn't tried any funny business since the rule took effect in 2021.
Elmer, that's a great regulatory approach. Tennessee should consider something similar. The current system is basically "implement first, ask questions later" which puts all the burden on ratepayers to catch unauthorized charges. By then the utilities have already collected millions in improper charges.
Duke Energy in Ohio just settled a case over unauthorized distribution modernization charges. They collected $31 million over 18 months without PUCO approval. The settlement required full refunds plus $2.1 million in penalties. But how many smaller unauthorized charges never get caught? We're probably only seeing the tip of the iceberg.