Q&A with David Kolata, executive director, Citizens Utility Board, Illinois
EDITOR’S NOTE: The Illinois General Assembly created the Citizens Utility Board in 1983, giving the nonprofit, nonpartisan organization a mission to represent the interests of residential utility customers across the state. CUB intervenes in ratemaking proceedings before the Illinois Commerce Commission, in the courts and before other public bodies and by providing consumers with information and assistance regarding utility companies.
IBJ: How long have you been with the agency?
Kolata: I have been with CUB since 2001 and executive director since 2005.
IBJ: How has the organization changed since it was formed?
Kolata: Our mission is to fight for consumers and to get the lowest possible prices for consumers from utilities that we can. The mission is the same, but I think the issues have changed a little bit. When we started, for example, the first cell phone had just been introduced and it was big as a brick. Now, of course, smartphones are ubiquitous and people use them for all kinds of stuff that never could have been envisioned.
Energy policy likewise has changed: We are now a restructured state. Generation is no longer owned by the utilities.
I wasn’t there at the beginning, but it’s fair to say that CUB was created in part because of the huge cost overruns on nuclear plants and it put a lot of pressure on the system. It became apparent there was a need for an organization like ours. It was passed into legislation by the General Assembly and signed into law by Gov. Thompson.
I think the issues are just as important as ever. And we’re proud of our track record over 30 years of existence and that we’ve saved consumers over $20 billion dollars. Hopefully we can continue to do that.
IBJ: That’s quite a track record. You’ve made a few enemies along the way?
Kolata: A lot of these things are structural. We don’t personalize things. But utilities sometimes want their monopolies and to earn more money, so we’re often fighting with them. But we’ve found through the years that you just have to put your head down and fight to get the results you want. Sometimes you have to sit down and try to work things out collaboratively. I think we’ve pursued both strategies through the years.
Our strength is the number of members we have and the support we have across Illinois — we’ve got about 100,000 members — and I think we’ve been able to develop a fair amount of credibility in that we are strong advocates with an important role to play, and we want to get the best outcome for consumers possible.
IBJ: Do you find utilities more ‘collaborative’ now they than they were years ago?
Kolata: It’s up and down. Right now we are in a period where you can foresee some potential deals or understandings with utilities. I think some of that is economic changes and structural changes, new technologies that make things possible. Now, we’re in an environment where we can work some things out, but a lot depends on what they’re trying to do. I think we’ve proven through the years that if utilities simply try to run over people that we will fight back. That having been said, we are always willing to try to see if we can reach some common ground.
IBJ: What kind of staffing do you have?
Kolata: We have about 27 people. We do a lot of outreach. We held over 530 events last year across the state. These are events in churches and community centers and schools, where people bring their bills, and we go over them line by line. We work with a lot of legislative offices from both parties, mayors across the state, just trying to provide some help. The average consumer can save quite a bit of money a year just by making the little choices here and there, that don’t necessarily cost any money.
We do a lot of outreach, but we’re probably best known for our advocacy before the Illinois Commerce Commission. Obviously anything we can do to help people save money is what we’re going to do.
IBJ: If you had a pie chart and could divide it in terms of where you put the most focus — electrical utilities, water utilities, etc., — how would you break it down?
Kolata: This is something that goes up and down. Right now there is a lot of focus on energy issues broadly. Most of what we do is energy and telecomm. We are getting involved more in some water issues, but only with industrials and utilities. Most water in the state is still provided by municipalities so we don’t work on those issues. Probably 70 percent of what we do would be energy related and the rest would be telecomm and water, but that goes up and down depending on the year. Next year we expect there will be a telecommunications rewrite in Illinois, for example, and we expect to be working on that.
IBJ: You’ve established another office outside of Chicago?
Kolata: Yes, we now have an office in Hillsboro, in central Illinois. We are a statewide organization, and one of the things we pride ourselves on is doing events all across the state. That’s something we’d like to do more of. Obviously when you’re a nonprofit, it can be tight on fund-raising. The people in our Chicago office, especially our outreach staff, are often on the road.
IBJ: Has there been a single big highlight of efforts to help consumers?
Kolata: Almost every year we’re getting victories. But you could look back. The big ticket item in 2007 was a billion-dollar refund to ComEd and Ameren customers. The 1997 law that restructured the state, we got a 20 percent guaranteed rate cut for most consumers in the state. That rate was frozen for nine years and that saved consumers billions of dollars. We’ve had lots of policy successes, passing pro-consumer regulations and laws before the Commerce Commission and the General Assembly. I think we’ve got a long track record of successes.
IBJ: How much does the agency rely on contributions?
Kolata: We are funded essentially by contributions and by mission grants. It goes up and down depending on the year. The majority of our funds are from members, but increasingly we’ve gotten support from foundations who like the work we do, especially the direct-service work.
IBJ: What kind of budget do you work with each year?
Kolata: It’s roughly a $2 million to $2.4 million budget. The bulk of our costs are personnel, travel. We have to hire expert witnesses for a lot of the cases before the Illinois Commerce Commission. But we run a very tight ship. Let me put it this way: Our annual budget is dwarfed by the amount that utilities will spend on lawyers on one case. From that perspective, we’re outgunned.
IBJ: How much time is actually spent arguing these cases?
Kolata: The cases themselves are very labor- and time-intensive. There’s various rounds of testimony, hearings, discovery. There is a huge amount of information to go through. There are at least two, three rounds of testimony. Then you argue it before an administrative law judge before it finally gets to the commission. Our lawyers and policy people are working pretty much nonstop on the cases we’re in.
IBJ: You’ve been executive director more than 10 years now. What was your background coming in?
Kolata: I had a PhD in political science. I liked it but didn’t want to be an academic. I had friends in the Chicago area so I moved up here with my wife. I sort of stumbled into the nonprofit world. I met Marty Cohen, who was the previous executive director of CUB. He became my mentor while I was here. I was doing some government affairs work for the organization. Marty was appointed to be head of the ICC, I became executive director and have been here ever since. It’s a very challenging job but a fun job, and the issues are never boring.
IBJ: A lot of your efforts have to be reactive. How much effort do you devote to strategy and being proactive?
Kolata: We spend a lot of our time on strategy and thinking about where to go next. For example, ComEd and Ameren are moving forward with smart grid infrastructure, to bring digital technology to the electrical system. That’s something that, if the value of that is maximized, it could really be good for consumers. However, you have to do certain things to make sure the value is maximized.
We’ve been working on a plan to take up with the ICC, which we have been working on for some time, that would set the framework. It would protect consumer privacy, make sure the system is optimized, but ultimately give the power to consumers, so that, just like on a smartphone where you can have an app that can save you money in certain areas, we want to see that same sort of technological development on the electric side. We’ve been doing a lot of work in that area trying to make sure that new technologies, new opportunities are provided to Illinois consumers as quickly as they possibly can.