Assessing the 68Th

TEXA S .13 ERVE R June 24, 1983 A Journal of Free Voices 75C • Assessing the 68th Most Valuable Player SENATOR LLOYD DOGGETT Rookie of the Year In This Issue: Caperton on K e ouse and l ey the PVC„ Says , . t1 L7r1h_ • PAGE TWO • Caperton Defends New PUC Mawr '■11 1 11! A recent article in this journal ("Utility Lobby Going Home - V ..."--..... ..:-.1-.-:--, -...._ .....7:•••• Happy," Jack Hopper, (TO 5/20/83) suggested that the state's . I I ,,, 04,1 s":'------•-- ::..-_---:::1-.---1 electric utilities are chuckling all the way home after the Sunset v.:111!IIIIIIIIII 0111111i.° "----—„ . -------.7--___,=.- review of the Public Utilities Commission (PUC), and the new Public Utilities Regulatory Act (PURA). Not likely. Before the opening of the Sunset Commission hearing, barely eight months ago, utilities could be heard boldly asserting that their aim for Sunset was to block all reform. But that was before the pro- THE blems of supplying power emerged as a surprise force in the ToBSERVER 1982 campaign, before public opinion gathered strength, and 0 The Texas Observer Publishing Co., 1983 before a new legislature set itself the test of genuine improve- Ronnie Dugger, Publisher ment in utility legislation. The utilities can certainly go home happy about a few things Vol. 75, No. 12 7-42Y,)'''.Y.F June 24, 1983 — they did not have to accept elected commissioners, they won Incorporating the State Observer and the East Texas Democrat, some moderation in the restrictions placed on Construction which in turn incorporated the Austin Forum-Advocate. Work in Progress (CWIP) money and Fuel Adjustment Clause procedures. And they certainly must be pleased with the civili- EDITOR Joe Holley ASSOCIATE EDITOR Geoffrey Rips ty of the legislative process: the "Ad Hoc Task Force" assem- EDITOR AT LARGE Ronnie Dugger bled by Senator Ray Farabee to work out compromise versions F . z*gPORTER: Kay Gunderson of the most embattled issues was open to anyone. WAWIWPTON CORRESPONDENTS: Amy Cunningham, Al Watkins But in the long run, it will surely be apparent that the Sunset CORRESPONDENT: Bob Sherrill obrAND DESIGN: Alicia Daniel legislation for the PUC embodies some major reforms that gen- !!tORIAL ADVISORY BOARD: Frances Barton, Austin; Elroy Bode, Kerr- uinely operate in the public interest. Public hearings conducted „ Chandler Davidson, Houston; Bob Eckhardt, Washington, D.C.; Sissy last fall by the Sunset Commission and the Senate Subcommit- *,t,erttlold, Houston; Ruperto Garcia, Austin; John Kenneth Galbraith, Cam- tee on Consumer Affairs laid the groundwork for a thorough Lawrence Goodvvyn, Durham, N.C.; George Hendrick, Urbana, .1114 Molly Ivins, Dallas; Larry L. King, Washington, D.C.; Maury Maverick, review of policy. Senate Bill 232, which I filed on January 25 Jr., San Antonio; Willie Morris, Oxford, Miss.; Kaye Northcott, Austin; James of this year and which was recently signed into law by Gover- Presley, Texarkana, Tx.; Susan Reid, Austin: A. R. (Babe) Schwartz, Galveston; nor White, reflected the best recommendations that emerged Fred Schmidt, Tehachapi, Cal. from those processes. It attempted to rebuild the regulatory CONTRIBUTING WRITERS: Warren Burnett, Nina Butts, Jo Clifton, Craig Clifford, John Henry Faulk, Ed Garcia, Bill Helmer, Jack Hopper, Amy Johnson, legislation as a unified and coherent whole — it was not just Laurence Johdon, Mary Lenz, Matt Lyon, Greg Mines, Rick Piltz, Susan Raleigh, a jumbled wish list or a set of problem-solvers. It represented Paul Sweeney, Lawrence Walsh. the results of months of study and thought about the most CONTRIBUTING PHOTOGRAPHERS: Alan Pogue, Russell Lee, Scott Van Osdol. forward-looking reforms in the nation and how we might best incorporate them into our own state policy. The bill as it final- CONTRIBUTING ARTISTS: Jeff Danziger, Dan Hubig, Kevin Krenek, Ben Sargent, Gail Woods. ly passed was a result of a concerted effort of myself and the Senate Sponsors: Ray Farabee, D-Wichita Falls, Lloyd Dog- A journal of free voices gett, D-Austin, and Hugh Parmer, D-Fort Worth and the House Representatives: Jim Turner, D-Crockett, and Elton Bomer, D- We will serve no group or party but will hew hard to the truth as we find Montalba. The suggestion that Senate Bill 232 was written by a and the right as we see it We are dedicated to the whole truth, to human values above all interests, to the rights of humankind as the foundation of the utilities is laughable to anyone who watched it develop, in- democracy; we will take orders from none but our own conscience, and never sulting to those who worked on it, and irresponsible on the part will we overlook or misrepresent the truth to serve the interests of the power- of those making it. ful or cater to the ignoble in the human spirit. Writers are responsible for their own work, but not for anything they have Senate Bill 232, as originally filed, attempted to speak to the not themselves written, and in publishing them we do not necessarily imply issues which were of public concern: it restricted guaranteed that we agree with them because this is a journal of free voices. funding by consumers for construction and abolished the automatic passthrough of fuel charges, the two aspects of spiral- Business Manager Frances Barton ing cost of power that account for over 2/3of the user's bill to- Assistant Alicia Daniel day. It provided more time for rate decisions and abolished Advertising, Special Projects Cliff Olofson bonded rates, two issues of special concern to public interest Editorial and Business Office intervenor groups like Consumers Union, Texas Municipal 600 West 7th Street, Austin, Texas 78701 League and Texas Consumer Association, which must try with (512) 477-0746 limited resources of time and money to counter the complex The Texas Observer (ISSN 0040-4519) is published biweekly except for a three-week interval between issues in January and July (25 issues per year) by the Texas Observer Publishing Co., 600 presentations of amply funded utility representatives. And by .' West 7th Street, Austin. Texas 78701, (512) 477-0746. Second class postage paid at Austin, Texas. such provisions as the establishing of original costs, as Single copy (current or back issue} 75C prepaid. One year, $20; two years, $38; three years, opposed to "adjusted value" assessment, and the use of manage- $56. One year rate for full-time students, $13. Airmail, foreign, group, and bulk rates on request. Microfilm editions available from University Microfilms Intl., 300 N. Zeeb Road, Ann Arbor, ment audits, it sought to make utilities more responsive to the Michigan 48106. same real economic and social forces that affect ratepayers. In Copyright 1983 by Texas Observer Publishing Company. All rights reserved. Material may not ; be reproduced without permission. a separate bill, Senate Bill 577, later largely incorporated into POSTMASTER: Send form 3579 to 600 West 7th Street, Austin, Texas 78701. Senate Bill 232, the legislature provided for a Public Counsel. These are all important provisions, and they all survived, 2 JUNE 24, 1983 more or less intact, the strong concerted efforts by utilities to weaken or remove them. The CWIP, fuel adjustment, and bond- Happy Birthday ing provisions are not as strict as originally proposed, but they give the PUC new strong authority to assess utility actions and decisions. And, for the first time, the law now gives the PUC "RAFF" express authority to take into account, during the ratemaking hearings, other aspects of utility management, including con- servation efforts. Senate Bill 232, then, has spoken to those problems and abuses that have caught the public attention over the last several years. But other features of our Sunset legislation are, to my mind, even more important. If we only legislate retrospectively, to prevent the repetition of past problems, then we will remain forever a step behind reality. But in Senate Bill 232 we have also tried to build a mechanism to meet the future. In that sense the new provisions for certification of plant construction and forecasting our power needs on a statewide, long- term basis are perhaps the most significant reforms won this session. ro E Certification programs are important because we need to con- trol and assess the astronomical cost of power plants before enor- as mous debts are incurred, not afterward. The PUC will now have ro the power to evaluate whether a new plant is really needed and whether the utility has chosen the best, most economical E technology. It will have the power to determine whether con- servation can fill the same needs more economically. I believe the PUC will also be better equipped to hold the utilities ac- C.) countable for their decisions, and so avoid the unbelievable cost E E overruns which have characterized recent construction in the a> industry. O Effective certification procedure is impossible without good co >. statewide energy forecasting. The new forecasting provision can _o help the PUC ensure that expensive, unneeded plants are not O 0 built. But it has a further significance for the development of _c regulatory policy, because a statewide plan shifts the assess- Yarborough blows out candles on 80th birthday cake at June ment of changing power needs and usage from the individual 8 celebration at Scholz's. utility to the PUC. The electric utility lobby are surely not happy about these provisions because they see their power of "planning and N JUNE 8, at the urging of Ag Commissioner Jim building" eroded. Implicit in the forecasting provision is the Hightower, a reception was held in the Governor's PUC's authority to order utilities to share power rather than 0 Mansion honoring former U.S. Senator Ralph Yar- build new facilities.

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