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News & Press: General Announcement

Office of the Public Advocate Increases Fees

Thursday, August 22, 2019  
Posted by: Alex Wong
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Explanation of Increase in the rates of the Office of the Public Advocate
(Updated 8/27/19)
 
Many may have noticed that the 2019 bill from the Office of the Public Advocate (OPA) has significantly increased from prior years.  In looking at how rates are derived, the OPA annual report to the Governor for State Fiscal Year (SFY) 2018 (2019 SFY is not yet available) and the approved legislative budget, we would offer the following analysis:
 
How the rates are determined:
The OPA fees are governed by statute under Title 35-A, Chapter 1 §116 (8).  It states that the OPA “shall develop a reasonable and practicable method of accounting for resources devoted…to matters related to each category of public utility…”
There are two separate parts that the fees are based on –
  • Assessments on each public utility that is based on the utility’s gross operating revenues (Only revenues generate from accounts within the State of Maine are considered for this purpose).
  • The OPA must account for staff time in such a way as to identify the percentage of time devoted to each category of public utility, and account for their percentage of time devoted to other duties that may be required by law.
The costs incurred by the OPA are made up of administrative expenses, general expenses, consulting fees and all other reasonable costs incurred within the law.
 
Determination of Rates Charged
OPA State Fiscal Year (SFY) 2020 Budgeted Revenue – $2,653,131

Utility Type

Percentage of Time
Allocated (%)
(A)


Allocated
Assessment ($)
(B)

Gross Net 
Revenues ($)
(C)

Assessment
Rate
(D)

 Electric 71.99 1,909,989 432,019,555 .004421
Gas 16.84 151,550 172,002,568 .002598
Telephone 6.44 30,386 198,416,558 .000861
Water 4.73 19,561 153,199,829 .000819
WCC - - 44,142 -
Totals 100% 2,653,131 (E) 955,682,652  
 
Column (A) – represents the percentage of OPA staff time allocated to each category of public utility during the previous year.
Column (B) – assessment for each category of public utility calculated by multiplying the total budgeted revenue (E) and the percentage of allocated time (A).
Gross Net Revenues (C) – Total of all net revenues for Public Utilities as reported in the Maine Public Utilities Commission annual reports from January 1, 2018 - December 31, 2018.
Assessment Rate (D) – This number is calculated by dividing the allocated assessment (B) by the Gross Net Revenues (C).  The Assessment Rate is multiplied by your 2019 revenues to calculate the fee charged to your utility
 
Calculation of a bill:

Example:
Utility ABC, with Net Revenues of $1,000,000.00 
The bill would be calculated as follows:   
Net Revenue of Utility ABC X the Assessment Rate (D) = Bill from OPA
$1,000,000 X .000819 = $819.00
 
Reasons for the Increase:
  • Staff/Consultant work time on water cases at the PUC increased from 1.3% to 4.73% (an increase of 364%)
  • An increase in the budgeted revenue required from the prior year.  The OPA budget is approved annually by the state legislature, and in the last session several amounts to cover increases in the cost of operations were approved. 
    • Budgeted Revenue for SFY 2019 - $1,899,122.00
    • Budgeted Revenue for SFY 2020 - $2,653,131.00 
      • A 40% increase over the SFY 2019 budget
 
Click to download this explanation