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THE BILL HAD GONE DOWN TO defeat in Colorado every year since the mid-1970s. Lawmakers refused to establish an office to represent consumers in utility rate cases.

But in 1984, it happened. When Colorado Common Cause and other consumer groups were drumming up support, they made some unusual allies. The National Federation of Independent Business (NFIB) signed on by adding a mandate that the office represent small business, too. Partly because of that support, the bill passed. And one of the office's first acts was to appeal successfully for a cap on certain small-business electric rates.

Small business tends to bear the brunt of increases in utility rates. Large companies generally get a break because rate structures favor large users. Meanwhile, state consumer advocates have had some success looking out for the interests of homeowners. Now, small companies want advocates to speak up for them.

Illinois passed a bill last fall to establish an advocate office for small business, while in Pennsylvania, similar legislation is being considered. Groups elsewhere are drafting proposals. "This is a novel issue for NFIB and for small business in general, because we actually are asking for government representation. Usually we want less government, not more," says Jim Buente, Pennsylvania NFIB director.

Pennsylvania consumer advocate David Barasch, who represents rate payers, says rising rates are stimulating activism by executives. "It used to be that business didn't fight with utility companies about how much money they should collect. But there has been a lot of fracturing in that position," Barasch says. "You see large industrial users presenting evidence against rate increases and small business looking for advocates."