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PUC Reform Excerpts of a Speech by former PUC Commissioner Peggy Rosson Texas was the last state to conclude that entities enjoying monopoly status in providing an essential public service to captive consumers required regulation. Most of the problems I see confronting us now grow out of the fact that fourteen years later we are still struggling with that basic concept. In theory we have an act which should be sufficient tot achieve its stated aim; in actuality and practice we have a flawed act and an agency which has never had the legislative oversight and attention it deserves, is chronically underfunded and understaffed, subject to greatly conflicting signals and pressures from both the state leadership and the Legislature and subjected to unrelenting pressure by the utilities. It is given more and more responsibility, less funding, told to base its decisions in contested cases only on the record before it and is then frequently criticized severely when it does, usually as a result of some alleged threat to economic development. On May 27, 1988 I presented testimony, individually, and on behalf of then Mayor Jonathan Rogers of El Paso, to the House Select Committee on Statewide Energy Planning. In that testimony I covered many of the issues which have been brought to your attention in this proceeding, such as qualifications for commissioners, the role of staff, the conflict concerning the definition of public interest, the desperate need for long range planning, city jurisdiction, and directives to the Commission concerning the performance of judicial functions, among others, and I made many recommendations for change. For your information. Regarding city jurisdiction, city participation_ and funding. This issue was debated in 1975 and 1983. In each instance the Legislature recognized and respected the benefits to be gained from local regulation. I concur in the testimony presented to you by Don Butler, the City of El Paso and others supporting the continuation of local jurisdiction and the right of reimbursement. The cities have played a major role in the regulatory process. The public has been well served by their efforts. There are hundreds of contested issues in a major case, either the Commission staff nor OPC can begin to cover them all. I think it follows that if the cities were not effective in their efforts, the utilities would not be so anxious to remove them from the scene. As to reimbursement, it is of course vital and should be maintained. As to surcharges, that was done in the ’70s. The Commission later concluded that all affected cities benefit and in fairness the charges should be borne by all of the beneficiaries. Commissioner Campbell raised the issue again several years ago. I opposed it then. I oppose it now on the same ground of fairness. As to interim reimbursement, it wasn’t necessary when cases took a few weeks, now that they take many, many months, it is mandatory. The cities don’t have the funds in their budget to advance. Their attorneys and witnesses can’t be expected to work for months for no pay. Certainly the utility’s attorneys and witnesses do not. If interim reimbursement is denied in prolonged cases, participation is effectively denied as well. As to rules to limit discovery, again this is something deserving thorough debate before any action is taken. What we are seeking to achieve is fairness. The public starts off at a disadvantage in that the utility has all of the information. It has been my observation over the past twelve years that they do not provide it willingly, despite the tonnage figures cited to you. In all candor, the name of the game is “catch me if you can.” Limiting the number of questions they can be asked would not seem to be the best way to achieve fairness and serve the public interest. The same holds true for streamlined proceedings. It may speed up the process from the utilities point of view and it may appear an appealing move toward efficiency, but is the public interest well served when the public is excluded from the proceeding? I have attached a copy of those recommendations to my testimony. In the interest of time I will not repeat, but do reaffirm those recommendations today. However, the most important recommendation I made to a select House Committee in May forms the basis of the one I make to you today. I said then: . . . But, the message I bring to you today is that the finest service your Committee could render to the people and to the future of Texas is to convince your colleagues in the House and Senate that the matter of energy regulation and energy planning must be among your top priorities in the next session if indeed our economy is to revive and thrive in the future; that it is as critical and deserves the same effort and attention as education; and that nothing can be accomplished without effective, enforced regulatory controls, knowledgeable, committed legislators and regulators, and adequate funding. Unfortunately that didn’t happen and so we are here today and your charge covers not only electric utilities but telecommunication utilities as well. What I have found amazing, in listening to the testimony presented to you, is that the overwhelming underlying consensus presented has been “yes, there are areas of concern, but please, make no piece meal changes to an act and an agency whose decisions under that act have a direct effect on every man, woman, child, and business in this state.” I urge you to heed that consensus. There are no easy answers of quick fixes. The Public Utility Regulatory Act calls for a comprehensive system of regulation, fair to both the ratepayers and the utilities. Please, approach it only on that basis. Make the recommendation to the 1991 Legislature that we asked for in 1988. Give this matter the full and complete attention it deserves. Establish standing oversight committees, revisit the role of the staff, fund the agency, however reconstructed, so that it can function effectively, establish guidelines for the selection of commissioners, urge the Governor to choose well, urge the Senate to confirm carefully, and when the commissioners are acting in their judicial capacity, allow no interference. I hope that’s the course of action you will find appropriate. I’m sure that there were many occasions when my colleagues would have preferred not to hear what I had to say about the actions of the majority. There were times when I would have preferred not to have heard them out. But until now, to my knowledge, no commissioner has ever been denied the right to be heard and dissent on the record. I think that can be attributed to the fact that we all understood the process, we all had a commitment to the institution of government, we all understood that when the three commissioners are acting in a body they are no longer individuals but “The Commission,” an institution, and that that institution had to be protected if public confidence was to be maintained. That understanding and that commitment to the principles of civility and dissent has been what has been missing recently at the PUC. It must be restored. In my opinion, the most pragmatic solution, under the circumstances, is to insure that the next appointee understands the necessity for these principles and is willing to commit, unequivocally, to their practice. 12 NOVEMBER 10, 1989