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sioners interpret their “public interest” mandate as a matter of balancing the interests of various parties, including residential, commercial, and industrial ratepayers, local governments, the utilities, and their investors. The problem is that, while the utilities and their business customers are represented by powerful advocates in PUC hearings to determine rate increases and how they will be allocated among the different classes of ratepayers, residential consumer representatives are understaffed and underfunded, to the extent they participate at all. And, following the commissioners’ lead, the PUC’s general counsel and other staff act more as referees among competing interests than as a voice for residential ratepayers. Many states provide for consumer representation in utility rate cases and other proceedings, typically through a state-funded public counsel. A majority of the Sunset Commission supported establishing an independent office of public utility counsel in Texas as a consumer advocate to represent residential ratepayers before the PUC. “There are very few major rate cases when residential ratepayers are fully represented by counsel,” Sunset Commission member Carol Barger points out. “Most utility consumer representatives have fallen by the wayside.” Barger, who has represented ratepayers in telephone and electric cases as a lawyer for the Consumers Union, says: “I don’t know if people are really aware of what a disadvantage people are at who try to participate in these cases.” Appointing a public counsel independent of the PUC might help restore the balance. But there is a risk that such an office would be shunted into a position of marginal influence. An alternative public counsel proposal by the Texas Municipal League cuts closer to the root of the problem that the PUC is a closed system. At present, the PUC plays both a judicial and an adversarial role. These roles are, at least in part, contradictory. On one hand, the commissioners have formal authority over the PUC staff that is charged by law with representing the public interest in rate cases i.e., they hire and fire the general counsel and other division directors. On the other hand, the commissioners adjudicate cases based on formal hearings in which the staff’s presentation is a major element. Some critics see this as analogous to a hypothetical court system in which the district attorney and all of the DA’s witnesses are employees of the judge. They say the tendency is for the staff to present a well-orchestrated rate case that tells the commissioners pretty much what they want to hear. “Then,” says the Texas Municipal League, “through a circular reasoning process, the commission accepts its own positions as having been presented by its staff in the name of the `public interest.’ ” The TML says the solution to the “conflicts of interest inherent in the current PUC structure” is to separate clearly the commission’s basic functions into two different agencies. Under the TML’s legislative proposal, the commissioners and their hearing examiners would continue to perform their judicial function, with an administrative support staff, but the rest of the PUC staff would become part of the office of public counsel, independent of the commission. The public counsel would be appointed \(but not a four-year term. Thus, the commissioners would be stripped of their authority over the fiftythe PUC’s accounting, economic research, engineering, and general counsel divisions. They would hear cases under a truer adversary system, with presentations by the utilities, intervenor groups representing various interests counsel staff charged by law with representing “customer groups which would not otherwise be represented.” TML utility lawyer Don Butler contends that separating the commission’s functions Would free the PUC/public counsel staff to do the high-quality, public interest-oriented job the commissioners keep them from doing now. Other PUC-watchers are more cynical. “You’d have to fire all the current staff and start over,” says one critic. In this view, the commissioners have long since run off all but the most like-minded or compliant staffers, with predictable results divi sion directors who sound like apparatchiks giving out the party line. In any case, the TML’s public counsel proposal is one institutional re-structuring plan that, while seemingly undramatic to a casual observer, could produce some significant results. It wouldn’t require staffing and funding a new bureaucracy, merely the transfer of existing staff and their functions. And experience elsewhere suggests that providing more balanced representation in rate hearings has an effect on commission decisions. In the first three years after North Carolina adopted, in the mid-1970’s, the system proposed by the TML, the average annual electric and telephone rate increases granted by that state’s utilities commission dropped by about half. Electing the PUC The TML wants “to provide a regulatory format in which personalities are of minimum consequence,” says ex= ecutive director Dick Brown. “The commission needs to have defined statutory responsibilities.” Without a change in the legislative guidelines, even newly appointed commissioners “might not think there was a mandate for change,” argues Don Butler, a man who knows the PUC ropes well, having represented Texas cities in major rate cases before the commission. “A lot of precedents get institutionalized out there.” Fair enough. But reforms will inevitably fall short of their potential unless they are carried out by progressive regulators. When all is said and done, the composition of the commission itself is a key factor, perhaps the key factor, in PUC decision-making. Numerous reform-minded observers of the PUC seem to think the best hope for making the commission more sensitive to ratepayer interests is to make the office elective rather than appointive. Members of Texas ACORN, for example, testifying at a Sunset Commission hearing in November, pushed hard on a proposal to elect the commissioners from single-member districts. Houston truck driver Orell Fitzsimmons said: “We don’t need more lawyers to plead our case before the commission. We need our hands around their throats at the ballot box.” Sen. Doggett and Sen. Oscar Mauzy session to elect the PUC. The bills call for electing commissioners from six or nine single-member districts, which supporters think would help keep the cost of THE TEXAS OBSERVER 19