The line to distinguish lobbying for legislative
purposes and judicial purposes is about to get a lot
brighter. The Georgia Public Service Commission is taking
up the issue in full view of the citizens -- a discussion
that will pit utilities against consumer and citizen
action groups.
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Ken Silverstein
EnergyBiz Insider
Editor-in-Chief |
Nearly all public matters must be vetted in full view
under statewide "sunshine" laws that require open
meetings. But what ordinary businesses and consumers might
not be aware of is that utilities are working overtime
with the public utility commissioners and their staff to
advocate utility positions. By most accounts, they have
the upper hand when it comes to getting what they want.
That said, power companies have the burden of proof in
most cases that go before commissioners.
The issue in Georgia is whether to ban all private
conversations between commissioners and any party seeking
to influence ongoing matters. Utilities such as Georgia
Power and Atlanta Gas Light oppose any changes, arguing
that each side of a discussion has an equal opportunity to
pursue commissioners and this inherent right to lobby such
decision makers should not be altered. Groups such as
Common Cause and the Consumer Utility Council disagree,
saying that the change in procedure would create more
transparency and avoid imparting of partial facts.
"There is an easy line in terms of subject matter,"
says Billy Jack Gregg, head of the consumer advocate
division for the West Virginia Public Utility Service. "No
matter how many rules, people will have conversations in
private. At no time, however, can anyone talk about a
pending case before a judge or a public utility
commissioner."
Georgia is one of two states that have no rules against
"ex parte" communications between stakeholders and
commissioners before a case actually goes into "pending
mode." Critics contend, however, that most of the legwork
is done well before the case is actually filed and hotly
debated in public.
Public utility commissions, generally, have
quasi-legislative and quasi-judicial roles. Commissions
must inform themselves. Toward that end, they must go on
legislative fact-finding missions. In those cases, they
are not governed by the strict rules of evidence. The
broad rule is then to "permit but disclose," says Gregg.
That is, conversations can take place but the subject and
the attendees must be revealed and in written form. A
legislative role is considered to be any issue in which a
case is not pending.
Most issues pending before regulators involve those to
decide rates. In the case of regulated utilities, they
receive an allowed rate of return on equity that's fair.
The definition of "fair" is where the discussion begins.
Because the markets don't set that return, the utilities
must justify all of their expenses and then posit a
suggested rate of return they feel is needed to keep
investors happy.
Constant Access
Georgia Commissioner Angela Speir is the force behind
changing the rule. In March she put the issue out for
comment, with the full body expected to make a final
ruling in May. Her view is that the commission makes
decisions for the Georgia citizenry that add up to
billions -- matters that are too sensitive and too
important to discuss behind closed doors. By making the
process more translucent, she argues that any bad data
would be quickly noticed, giving the whole five-member
commission a fuller picture.
But, the utility's lobbyists are polished and know how
to work the halls of the state capitol and the regulatory
maze. Some of commissioners won't discuss controversial
issues with lobbyists unless it is in a public forum.
Others do hold private meetings, saying that they must
stay informed. That leads to protests.
"Commissioners are continually exposed to 'potentially
biased' views on issues," says a comment filed by the AARP
representing senior citizens. "Other parties to a case may
not even be aware of these communications. Thus there are
no 'checks and balances,' only opportunities for the most
powerful parties to make their case known outside of a
regulatory proceeding, and perhaps to the detriment of the
other parties in the case. Strong ex parte rules are
sorely needed."
Utilities in Georgia take a different position. They
say that any revisions to the current process would impede
the flow of information and thereby interfere with the
public utility commission's legislative role. Utilities
say that because they typically have the burden to build
technical and political cases for their positions, they
need constant access.
Deciding rate cases is not too different from judging
other legal issues. It's an adversarial process in which
utilities and interested parties line up and make their
arguments in a public forum. Regulators act as judge and
jury. Typically, settlements are reached and utility
commissioners give their stamp of approval. Many tactics
are used to arrive at an outcome, and some, like private
meetings or special trips, are not without controversy.
"Historically, the commission has been considered a
legislative body with some adjudicative functions," writes
Atlanta Gas Light in its public comments. "Commissioners
[like legislators] have been free to collect information
from such sources in public and private settings, and each
entity has had equal opportunity to present its views to
commissioners."
Clearly, utilities have the wherewithal and the special
talent needed to influence public policy making. That's
fair. But given that influence, it is obvious that other
interest groups with fewer resources need to be given
equal access to such policymakers who make weighty
rulings. All but two states do this through an open
meetings process, precluding all private discussions with
decision makers during pending matters. That's how the
public's business should be done.
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