Bobby Baker, Georgia Public Service Commission Chairman spoke to Madison Forum members and guests at the breakfast meeting, Saturday, April 28, 2007.
His topic was Openness and Transparency Critical to Good Government. He explained that the Public Service Commission (PSC) is in the process of debating an “ex parte” rule. He said “ex parte” is a Latin term defined as “on one side only, by or for one party, done for in behalf of or on application of one party only”. An “ex parte” rule prohibits meetings in which all interested parties in a contested case are not present.
Mr. Baker said that in Georgia, if you try to have a private meeting with a judge regarding a case you are involved in, he will throw you out of his office and maybe hold you in contempt and put you in jail. But, he said, that doesn’t happen at the PSC. He said, in his many years on the commission he has had, first hand, practical experience in how government works. He has been involved every year with the Georgia Legislature and the budget process and dealing with legislation that comes up that has a direct impact on utilities and utility regulation in the state of Georgia.
He said the discussion of “ex parte” rules has arisen because of the fact that the commission has no limitations on contact with decision makers, meaning commissioners, when it has a contested case. A contested case could be anything from and arbitration or mediation to a dispute over a contract between telephone companies, or it could go all the way to a rate case. In the Georgia Power rate case the commission was dealing with billions of dollars. While many decisions have o impact on us in Cobb County, a case Mr. Baker said he had hearings on all the previous week dealt with Georgia Power’s Integrated Resource Planning. Georgia Power has to present a long-term 20-year plan to the commission every three years laying out what they anticipate their demand for electricity will be and how they are going to meet that demand to serve the customers. As part of that filing, they are proposing the construction of two nuclear plants at Plant Vogel, which are not cheap at about 7 or 8 billion dollars, if two are built. Why that is important to Marietta Power or Cobb EMC customers is because these companies will be buying a share of the generation output and have an ownership interest in those two facilities if they are built. No matter who our utility company is, PSC decisions impact our utility bills.
Mr. Baker said the PSC used to have more of an impact on us as consumers in the state of Georgia in the telecommunications arena, but once deregulation came in 1995, we are almost back to an unregulated market. Commission members serve now mainly as an arbitration and mediation forum for the various telecommunication companies that may have contractual disputes between themselves. It has mainly been with the larger companies like AT&T – the old Bell South – and the smaller competitive companies.
Mr. Baker said when Georgia Power files its next rates case this summer, odds are they are going to ask for a significant increase in their base rates. The commission goes through a tested case process. Once the case is filed, there is a six month time frame mandated by law. He said it is almost like a court case, except commission members are not judges. Georgia Power puts up its case. The commission has a staff charged with making critical analysis of what their request is. Other parties are allowed to intervene in the case. Then Georgia Power has the final opportunity to rebut whatever is said by these interveners in the case process. Briefs are filed. A final decision is made. Throughout this entire process, if a utility company wants to come to the commission offices, even an hour before a decision is made, there is nothing preventing them or anyone else from doing that. But, Mr. Baker said, he has never in all his years on the PSC had an ordinary Georgia consumer come to his office the day of a decision and tell him in very specific terms what they want in a rate case. He said he may hear from consumers out in the community or at meetings or functions who may say they are aware of the rate case and they hope the decision will not have a big impact on their bottom line. That is about as specific a comment he has heard from a consumer. He said utility folks are more specific and to the point. They deal specifically with individual aspects of the case that impact their company’s bottom line and operation. They are saying my company needs a return on equity level of 12% or 12½$ or dire consequences are going to happen to us in the finance market”. He said there have been situations in the past where commissioners have been approached before or after a decision by interested parties and asked for very specific changes or positions be taken in a rate case.
Mr. Baker said his concern, based on the experience he has had at the commission, is that this is not fostering an open and transparent process. He said what they need to do is to somehow provide some reasonable restrictions on communications with the commissioners who are decision makers on order to require or force the parties to make their case in that hearing room on the record in front of everyone else so that what they say can be challenged and analyzed by all interested parties in the case.
Mr. Baker said he is not an expert on every aspect of a rate case or every type of utility proceeding. He has a professional staff that he relies on for expert advice on finance and engineering fields, and he has found over the years that when somebody makes an argument or states a position in a public forum and you have a dozen attorneys or technical experts In the audience who know precisely if that statement is true, or where it might not be completely true, that is the best way for a decision maker to find out and be educated in the process as to what they need to know to try to make as fair a decision as possible. So the goal of the “ex parte” rule is to try to require interested parties to make their case in a hearing room, on the record, before every one else rather than having private meetings with decision makers behind the scenes where none of the other parties are invited to participate. No one else is there to challenge the comments or the statements that are being made. Then no one can say you’re not getting the whole story, you’re only getting part of the story.
Mr. Baker said attempts had been made in the years he has been on the PSC to try to open up and make the commission more open to the public, make it easier for the public to follow the proceedings. If someone wants to follow the process, there is live streaming audio of the commission meetings over the internet. Not too many people do this, but a lot of utility folks follow this in their offices. It used to be that when someone filed a brief or a memo for a case, they had to present 15 hard copies. It went into the filing room, and if someone wanted a copy of that document they had to request a copy of the document, pay a copying fee and a mailing fee, and the document would be sent to you, or physically go down to the office and pick it up and pay a copying fee. Now the commission has all electronic filing. Any one can go to the website, find the document, and download it.
Mr. Baker said the next logical step in the proceedings t make the Public Service Commission more transparent, more open to the general public is to put some reasonable restrictions on private communications with decision makers in contested cases that have a direct impact, not just on utility companies, but on everyone else who pays a utility bill or gets utility services.
Mr. Baker said the commission is in the process of sifting through the comments on the “ex parte” proposal draft that has already been put out and try to craft something everyone could live with and that a majority of the commissioners will actually support. It will probably not be something broad and all encompassing but something rather limited. But he said he would rather have something; he would rather go one step forward than maintain the status quo and have nothing at all. One member feels that “ex parte” should include all interested parties including all rate payers and anyone in the news media. While Mr. Baker says he doesn’t philosophically agree with that interpretation of what should be an interested party, he points out that these are some of the issues the commission will be wrestling with as far as trying to put together or create a rule or guidelines for the commission to use in government to help bring more transparency and openness in the decision making process and just trying to make the whole process a little bit more responsible and accountable to rate payers and to the people who elect us to the Public Service Commission.