WHAT IS THE PENNSYLVANIA OFFICE OF SMALL BUSINESS ADVOCATE?
History: Business and residential customers generally have a similar interest in keeping a proposed utility rate increase as small as possible. However, their interests often conflict on the issue of rate structure, i.e., the share of a rate increase to be borne by each particular category of customer.
Historically, the Attorney General’s Office of Consumer Advocate (“OCA”) has represented residential ratepayers in rate structure disputes. Furthermore, large commercial and industrial customers frequently have had their own attorneys and expert witnesses. In contrast, because they did not have – and could not afford – their own representation, small business customers often received a disproportionate share of the rate increase. The legislature sought to level the playing field by creating the Office of Small Business Advocate (“OSBA”).
In 1993, based on the OSBA’s success in utility litigation, additional duties were assigned to the Office, as part of the 1993 reforms to Pennsylvania’s Workers Compensation Act. Specifically, Article XIII of that revised statute, 77 P.S. 1041.1 et seq., authorizes the Small Business Advocate to represent the interest of Pennsylvania employers in proceedings before the Insurance Department, which involve filings made by insurance companies and rating organizations with respect to the premiums charged for workers’ compensation insurance policies. The Office of Small Business Advocate reviews the loss cost filings that are made each year by the Pennsylvania Compensation Rating Bureau and the Coal Mine Compensation Rating Bureau of Pennsylvania. NOTE: The OSBA has no involvement in actual compensation or coverage disputes.
Although administratively situated within the Department of Community and Economic Development (DCED), the Small Business Advocate Act specifically states that the Secretary of DCED is not in any way responsible for the policies, procedures, or other substantive matters developed by the OSBA to carry out its duties under the Act. The OSBA is granted broad discretion concerning whether or not to participate in particular proceedings before the PUC. In exercising that discretion, the OSBA is required to consider the public interest, the resources available, and the substantiality of the effect of the particular proceeding on the interests of small business consumers.
The OSBA’s budget for Fiscal Year 2015-2016 is $1,400,000. The OSBA is not funded under Pennsylvania’s General Fund for its operations. Rather, the OSBA is fully funded by annual assessments levied on Pennsylvania utilities and workers’ compensation insurers, in direct proportion to the office’s actual expenses, relative to activities within each operational group. Again, none of the OSBA’s budget is financed by General Fund tax revenues. Additionally, any monies not deployed by the OSBA during the Fiscal Year are returned to the PUC and placed in trust for the next Fiscal Year operations.