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a ANDERSON & COMPANYi c\(wFICE TEA SPICES TWO Jl3PPERSON SWAM!: MJSTIN, TEXAS 7Mi 512 453-1533 Send me your list. Name Street City Zip says by doubling the budget of the OPC “you’d more than double the cost savings to ratepayers. Under present conditions, “it just requires working 60 to 70 hour weeks for very long stretches of time. After a while that’s very difficult to sustain.” There have been other frustrations. Boyle. says he found butting heads with the staff of the PUC to be unpleasant at times. “Sometimes there was a tribal response by the commission to our sometimes very tough and hardnosed cross-examination or criticism that we might make of staff testimony. . . . When one attempts to attack the credibility of a witness, then everyone within that organization becomes resentful, as though it’s a tribe.” Though Gov.-elect Clements has suggested the staff of the PUC can be trusted to represent residential consumer interests adequately, Boyle says such a view is outdated. “The interests now between various classes of customers are too diverse [for] the staff of the commission [to] represent any one particular interest of taxpayers. There’s too much at stake for each class, whether it be industrial or commercial ratepayers or residential ratepayers, to have any one party try to represent all those interests and by law the staff of the commission is also charged with representing the utility.” Boyle was active in the push to create the Public Utility Commission in 1975 but, looking back, says, “I don’t think the regulatory process has worked as well as we had hoped for. I was naive about many things when I did that, and even naive before I took my current job. “The biggest issues that needed to be dealt with were the cost and necessity of the nuclear power plants, and to a large extent the regulatory process totally ignored it. . . . The function of regulation is to be a substitute for competition to get rid of monopolistic waste and inefficiency. And to a great extent, the regulatory process has failed to do that.” “The rate increases caused by these nuclear power plants are astronomical,” Boyle says. In the case of the nearly completed South Texas Nuclear Project, he says, Houston ratepayers will probably pay 15 to 20 percent more to pay for the plant. He expects Central. Power & Light’s bills to go up 40 percent because of the South Texas project. Although there is still a chance to stop construction of unit two at STP, there is little chance of turning back from nuclear power in Texas at this point. The immediate battleground now is, according to Boyle, “whether the mistakes that are related to these particular power plants are going to be borne by the ratepayers or whether they’re going, to be borne by the shareholders.” Utility regulators in the past have tended to “place too much emphasis on the opinions of investment analysts located in New York City, who may spend an hour or two hours looking at a particular company and listening to the company officials tell them what they want to tell them,” Boyle says. Not only has such an approach been burdensome to average ratepayers, it is in Boyle’s view “anti-business.” To raise rates significantly does nothing to create jobs or promote economic development on a local level. “It’s just a question of whether the ear is cocked toward Wall Street or whether the ear is cocked toward Main Street.” D.D. “The cities filled the void,” Boyle says, “but it was difficult for the cities because of the scope and breadth of regulatory process [today]. Some companies maintain permanent regulatory staffs that are in constant day-to-day contact with the staff. Their function is a quasi-lobbying function.” The PUC staff was never properly funded for a close scrutiny and many members were fresh out of college with no real experience. The staff was not geared toward the more adversarial tone that rate making was taking on, Boyle says. Often in the past, when a utility came in with a rate increase request and someone else opposed it, the staff would simply halve the amount in fairness to both sides. Some utilities caught on, doubled their original request and ended up getting .what they wanted anyway. The staff also acts like judges sometimes by putting a government stamp of approval on rate increases without adequately scrutinizing requests, Boyle says. This is becoming much more critical now that the amount of money utilities are spending and asking for in return, is soaring. “The most glaring failure in the regulatory process was the failure to properly review the need and cost for nuclear plants,” says Boyle. “There’s an incentive to mismanagement if the regulatory process isn’t working. The more the plant costs the higher the company’s profit.” 1:=1 East Dallas Printing Company Full Service Union Printing 211 S. Peak Dallas, Tx 75226 Our outstanding lunches have been an Austin must for eleven years. Our international grocery features food and wine from around the world. Come see us at our new home. 1610 San Antonio Austin, Tex. 78701 472-1900 Hours: 7am ,7pm Mon. to Fri. and 8am 6pm on Sat 1886 1986 COME STAY & CELEBRATE OUR 100th YEAR P.O. Box 8 Port Aransas, TX 78373 THE TEXAS OBSERVER 15