COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES COMMITTEE ON APPROPRIATIONS e: Governor's Proposed Budget - 1987-1988 Public Utility Commission Office of Consumer Advocate
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Stenographic report of hearing held in the Majority Caucus Room, Harrisburg, Pennsylvania, on Wednesday January 28, 1987 2:00 p.m. MAX PIEVSKY, CHAIRMAN William J. Stewart, Vice Chairman Ted Stuban, Secretary Italo S. Cappabianca, Subcommittee Chairman on Health and Welfare Joseph Steighner, Subcommittee Chairman on Capital Budget Edward A. Wiggins, Subcommittee Chairman on Education MEMBERS OF COMMITTEE ON APPROPRIATIONS Mary Ann Arty Hon. Dwight Evans Robert Belfanti Hon. Robert J. Flick Kevin Blaum Hon. Michael Gruitza Raymond T. Book Hon. Leonard Gruppo Karl W. Boyes Hon. Allen Kukovich Thomas R. Caltagirone Hon. Richard A. McClatchy Gaynor Cawley Hon. Harold F. Mowery Brian Clark Hon. John M. Perzel, Jr. Paul Clymer Hon. Thomas C. Petrone Nick Golaf§lla Hon. Merle H, Phillips ftoy W. Corneli Hon. Frank Pisteila Alphonso Deal Hon. Jere Schuler Roger Duffy Hon. Steve Seventy Present; ard E. Willey, Executive Director rt Priest, Budget Analyst Reported by: Rosenstein Dorothy M. Malone, RPR
one registered Professional [
LINDA TALIAFERRO, Chairman, Public Utility Commission FRANK FISCHL, Commissioner BILL SHANE, Commissioner
Also Present
Paul Crowley, Director, Intergovernmental Affairs John Alford, Director of Operations Gus Gillert, Executive Assistant, Operations John Dial, Director, Bureau of Audits Allison Turner, Chief Administrative Law Judge Conrad Six, Director, CEEP Jerry Rich, Secretary, Secretary's Bureau Barry Ernst, Director, Transportation Cheryl Walker Davis, Chief, Office of Special Assistants Ken Nicely, Bureau of Safety and Compliance Charles Hoffman, Office of Trial Staff Daniel Delaney, General Counsel Joseph Farrell, Director, Bureau of Consumer Services
CONSUMER ADVOCATE
DAVID M. BARASCH
Also Present
Dan Clearfield David Rolka Elizabeth Couture, Budget Analyst CHAIRMAN PIEVSKY: The hour of two o'clock having
arrived, the 1987-88 budget hearings will start this after
noon and before the Committee we have the Public Utility
Commission and the Consumer Advocate. Mrs. Taliaferro,
would you want to introduce your staff and the other
Commissioners at the head table?
MRS. TALIAFERRO: Thank you very much, Mr. i Chairman. The Commission, as has been traditional over
several years, has its full senior management staff with me.
On my right, of course, I have Commissioner Frank Fischl
and on my left, I have Commissioner Bill Shane.
My senior staff includes my Director of
Operations, Mr. Alford. Sitting directly behind me, we have
the various bureaus here, 13 in all. Would you care for me
to identify them all at once or individually? I have CEEP,
Mr. Six, Conrad Six. Transportation, Mr. Ernst is somewhere
here. The Office of Special Assistants, Mrs. Cheryl Walker
Davis. The Bureau of Safety and Compliance, Mr. Nicely.
The Office of Trial Staff, Mr. Chuck Hoffman, the General
Counsel, Mr. Delaney. The Bureau of Consumer Services,
Mr. Farrell. The Chief Judge, Allison Turner. The Audits,
Mr. Dial. The Secretary's Bureau, Mr. Rich, and of course,
Intergovernmental Affairs, last but not least, Mr. Paul
Crowley. CHAIRMAN PIEVSKY: Who is minding the store? MRS. TALIAFERRO: All the others.
CHAIRMAN PIEVSKY: The Consumer Advocate, Mr.
Barasch, do you have anybody here you want to introduce as far as staff?
MR. BARASCH: Yes. Good afternoon. I brought the same percentage of my staff with me.
(Laughter.)
I have Dan Clearfield with me. He is one of the senior attorneys on the staff. Liz Couture, who is the
Budget Analyst for the office. Mr. David Rolka, who is largely responsible for preparation of the document, is home . in bed with the flu. So I will handle the questions he probably would have handled better.
REPRESENTATIVE DEAL: Mr. Chairman.
CHAIRMAN PIEVSKY: Representative Deal.
REPRESENTATIVE DEAL: Mr. Chairman, when these persons answer questions, could they identify themselves because I may be looking at the makeup of all of the staff, but I can't tell if they don't identify themselves. I don't want to get them mixed up.
CHAIRMAN PIEVSKY: As in the past, we will dispense with any opening statement and start right in with questioning by the Appropriations Committee.
I will start off with one question. I have a copy of a memo from Commissioner Fischl to Commissioner Shane .ndieating that a group called Regulatory Research Associates
ranks Pennsylvania as one of the most consumer oriented
public utility commissions. In fact, only four states are
more consumer oriented according to the report. My consti
tuents don't seem to feel that way at all. Mr. Fischl, what
are they missing?
COMMISSIONER FISCHL: I don't know what you mean
by what they are missing. But it is a fact though that for
the last number of years, the State of Pennsylvania has had
the smallest increases in the number of utilities. I don't
know specifically what you mean by what are they missing.
CHAIRMAN PIEVSKY: Commissioner Shane, do you
want to comment on that?
COMMISSIONER SHANE: This is a Wall Street
investment service run by a fellow named Wally French and
they analyze the rate decisions of all the commissions of
the 50 states and put them in a certain rank order, above
average, average, below average. Now what they mean by above
average is a commission that is very generous in its rate
requests. I believe Florida and a couple others are in the
above average category. So, according to this criteria and
we are down in the, the grading system runs from A to D.
I think we are in the D which means the Wall Street Investment
Analyst Firm of Wally French ranked us very low in terms of
the responses we have given to rate requests. Now, that is one organization's grading system. i And so when we got that little report giving us
a D that we thought we could be proud of, we passed it on.
CHAIRMAN PIEVSKY: Are you saying you are proud of the D or should you do better or don't you agree?
COMMISSIONER SHANE: Well, it is one of those perverse situations given. Perhaps I won't speak for my
colleagues. I think it is the first time in my life that a D is a badge of honor.
CHAIRMAN PIEVSKY: Any comments?
MRS. TALIAFERRO: There are several rating,
financial rating agencies. This is but one. I think what you have to focus in on is the criteria that they use that they stress. I can't remember all the key indicators that they use, but for example, overall rate of return, return on equity, certain accounting standards or changes, whether you have construction work in progress, those are the kind of things from the investment point of view that they rank highly, but from the consumer point of view in quotes on both sides of these words maybe reversed rank. So you always have to read these rating agencies with the indicators that they use as pivotal points in mind. So in that case
I would agree with Commissioner Shane. It is a perverse kind of relationship. It is a D from an investment perspective only. CHAIRMAN PIEVSKY: Is the Consumer Advocate familiar with the report? Does he want to comment on it?
MR. BARASCH: No, I am not familiar with the report. I would like to know what the evaluating techniques were. But I have no comment.
CHAIRMAN PIEVSKY: Representative Kukovich.
BY REPRESENTATIVE KUKOVICH: (To Mrs. Taliaferro)
Q A few questions regarding staffing. Maybe it would be best to proceed by questioning the Chairperson and
t if the other two Commissioners want to comment, they can.
I'm trying to recall what we did last year with the budget and I'm pretty sure that we put in adequate funding to begin to hire the additional staff that was necessary to address the mandates that were included in various pieces of legisla tion which we passed last session.
Now it appears, and I am sure you made that request to hire the new staff. I believe that request was disallowed by the previous administration. So you are carrying a substantial sum in budgetary reserve that will therefore go unspent I assume. I am wondering, first, how well you are addressing the new mandates that we put upon you without the requested staff.
A Without the requested staff. We have made certain internal adjustments. The bottom line is simply this.
We reassigned ten commissioner vacancies for the staff that would be applied to the commissioners' offices to accommodate as best we could the mandate at that time. Right now, I am sure you are aware of.through the Chairman, we had requested again a supplemental request for those 23 positions which we believe would help us fully accomplish the new mandates.
Q So you have resubmitted those requests to the new administration?
A Yes.
Q Have you had a response yet from thein?
A Not yet.
Q The ten commissioner staff positions which you shifted, whenever two new commissioners are confirmed, what will you do with the staffing at that point?
A That is why we not only have the ten in the supplemental but we have them in the --
Q Could we try to keep Paul Crowley from laughing?
A I can't see him.
Q You're very fortunate.
A The supplemental request and the executive budget request go hand in hand. Let me make this statement very quickly. If we were to receive our supplemental request, we would not be requesting any complement increase at all. We would only be dealing with approximately a few hundred thousand operational changes. The difference between the supplemental and the executive budget is that
the supplemental, if we were to start now, would be funding for a full year. The executive is only 13, 13 pay periods.
That is how it is referred to.
Q Regarding the present staffing level of the
Division of Consumer Education, almost every year we have a little discussion about that.
A Consumer Services.
Q I didn't notice in the request that you had any information regarding staffing or funding for that division, the Division of Consumer Education.
A The Consumer Services Bureau includes a request for two additional people. They had originally requested six. After the Commission review, we have approved, recommend ed to you two. Within that would be maintained that spot for the Consumer Education person which we had success with.
Although the individual has since left the Commission. That spot we wish to maintain and to provide an additional,- what we would call, a Compliance Specialist Researcher, someone to develop a book of concrete examples for utility use and training as to what exactly compliance with some of our regs and newer regs.
Q You confuse me a little. That last job description, that would be a person that would replace
Xathryn Spring? A No, no. That would be in addition. There were two
Q So one of the two that you are requesting would replace her?
A Would replace her.
Q The second position --
A Is an additional one also.
Q And those are basically the total of your plans for Consumer Services?
A For Consumer Services. You will recall in our supplemental request for 86-87, the previous one, we were allowed five that went directly to Consumer Services in addition to a few others.
Q Does the Commission still plan to continue the
Consumer Line Newsletter?
A Well that would be part of the educational person's function. I would hate to comment at this point.
The bureau chief, I am assuming, would be working with whoever he interviewed and ultimately selected.
Q 1 had some input regarding that and there has been some questions about how often it would be published, who would be included on that mailing list, would legislators be included. Do you have any responses to those questions?
A Not to those kind of details at this time. It was successful for as long as we had it. I believe it would be the feeling to maintain that kind of activity. Q When will you know what the plans are for the
Consumer Line? How often it will be published?
A As soon as we can get someone hired.
Q Let me, I only have a couple other questions.
They are really not budgetary related, but whenever I have you in front of us, I want to take advantage of the opportunity. You are very well familiar with the West Penn
Rate Poller case, especially the Bath County portion. I believe last August, August of '36, there was a vote, a majority vote to reconsider that position. It has been four or five months or so now. I'm wondering if you can give us a time frame when you will take a formal position on Bath County in the West Penn rate case?
A At the risk of sounding too vague, I will tell you that I expect that to be brought to the agenda very shortly, but I can't tell you exactly what week session, given the Commission's other requirements and other meetings.
Q As long as I know it is a priority that you will be bringing up as soon as possible.
A You will also recall at the time we have also been through a reorganization. So there are a few other priority items that have been put on hold so that the
Commission can deal with it appropriately when they come up and not run it through.
Q There is one other question and I definitely don't want the Consumer Advocate to have to answer this.
I don't want them to be on a spot. But there has been some
issue taken with the effect of income taxes on utilities in light of the new federal tax laws. I have seen a number of dollar amounts as high as 500 million that some people are saying should be refunded. 1 have also been informed,
I think three electric utilities, PP&L, PenElec and Met Ed have voluntarily come forth with some refund plans because of tax monies they will save. Can you edify the Committee as to the Commission's position on the tax issue?
A As you well know, 1 submitted a letter requesting. information fron the utilities late September. At that point, the Commission had considered to allow, and 1 would put quotations around the use of the word voluntary for all those utilities mentioned, the Commission had allowed two,
I think it was Met Ed and PenElec, because they were involved in a rate case and that issue was dealt with appropriately in the rate case by all the parties.
With respect to PP&L in responding to the
Commission's request for information, they, of course, came forward with a plan of their own that involved several other issues in addition to just the tax issue.
The other information submitted by the various utilities, not all of whom were able to respond to the questions, some attempted to argue or reargue issues like overall rate of return and various other issues. What was
also coming clear from the staff research was that we knew
there were going to be certain offsetting charges. The
actual monetary dollar amounts are up for grabs at this
point because that is how difficult the information is to
deal with.
Where we are now, we have requested, sent out
ten questions to those utilities. 1 believe the staff is
in the process of compiling the responses of them. Shortly tt|
I will be sitting down with staff to be told who has filed
what and then it will come to the agenda for the Commission's. action, again.
Q So you might end up taking action on that point
irrespective of individual rate cases?
A Yes. 1 should point out that the Commission
in effect, one of the most irportant things, sets all rates
as temporary rates for those 156. So that each and
every company is subject to a moveiaent on a case-by-case
basis. As fast as we can develop the information and feel
comfortable we are not going through an up down, up down,
overall situation.
Q And you anticipate pursuant to your follow-up
letter that you will have a response from all of the utilities?
A And we will be able to separate out those
we can act quickly with from those that need more action, more work, you know, various positions. They are unique.
And it is not just utility by utility. It is industry by
industry, the grouping, you have got variations going on.
Q What is your response rate from the communications utilities, Bell and some of the others?
A I don't know. I would ask my Director of the
Office of Special Assistants to --
Q If you're going to refer that, I would like just
a rough figure of how many of the fixed utilities also.
A Yes, they have that info now. It is not yet to the Commission.
MRS. DAVIS: Madame Chairman, I don't have the exact number with me. I know that we got flooded with responses. The major companies have filed their responses and we are now encouraging replies to those responses.
REPRESENTATIVE KUKOVICH: If maybe those figures can be forwarded to the Committee at your convenience.
MRS. TALIAFERRO: They will be forwarded to the
Chairman.
BY CHAIRMAN PIEVSKY: (To Mrs. Taliaferro)
Q Getting back to the supplemental budget request, for the benefit of the members of the Appropriations
Committee, I think we better clarify that. Now, the money is available. The request is not for more money, is that correct? A That is correct. It is to use the reserve.
Q You have money in reserve. What you are looking for is authority to put those 23 positions —
A We need the authority —
Q Which you did not get under past administrations?
A That is correct.
Q You had the money the last budget?
A That is right. We did not get the authorized complement that we are requesting because the administration sets the authorized complement.
CHAIRMAN PIEVSKY: I understood that, but I wanted the Committee to understand what is going on.
Commissioner Shane, did you want to say something?
COMMISSIONER SHANE: I just want to plug in the numbers. The supplementary budget request indicates that we currently have available a budgetary reserve of 799,000.
We ask a complement increase of 23 new positions which would involve the release of 418,000 of that 799..000. This highlights the fact that in budget making, you can appropriate till you're blue in the face. Whoever controls the complement truly controls
CHAIRMAN PIEVSKY: Representative Deal.
REPRESENTATIVE DEAL: Thank you, Mr. Chairman.
BY REPRESENTATIVE DEAL: (To Mr. Barasch)
Q For the Consumer Advocate, just so that I am clear here on this. How many persons, positions do you have
in your agency?
A Twen ty-s even.
Q Twenty-seven positions?
A Yes, sir.
Q I am concerned, and I am doing this for you today
but in the future committee, the chair will be sending out
for this information so that we will have it. I notice
you have one Consumer Advocate. Is that you?
A Yes. Representative, I just took a look. I
actually gave you the wrong numbers. It is 26 at the moment..
Q Oh, 26. I understand you have four Assistant
Consumer Advocates Title IV, is that right?
A I don't think so. There are three people in
that position, Representative.
Q When we are sitting here, how do we tell what
is actually there. When I look at, with us sitting here
looking at this report —
A Are you looking at this year's budget request
. because I think you might have last year's possibly maybe
in error.. It is not in the budget information. You are
looking at the first page which is for last year's complement.
If you will turn the page ahead two pages, page 4.
Q Page 4 and we have 28 positions, is that right?
A That is as of July 1. As of next fiscal year, we would be hoping to have 28. As of January 1, 1987, we
had a complement of 27 with one position vacant. So we
had 26 on staff. I will fill the vacancy I now have and
we requested permission to go to 28. So that will explain
why the numbers look a little bit different.
Q On the Consumer Advocate,that would be you,
is that right?
A Yes, sir.
Q You have three Assistant Consumer Advocates,
is that true?
A Yes, sir.
Q Is either one of them black?
A No, none of them are black.
Q Either one of them a woman?
A None.
Q Okay, let's go to the next line. You have
three Assistant Consumer Advocate 3s. Are either one of them black?
A No. I have one woman, one white woman, and
two white males in that position.
Q Let's go down where you have a good chance to
do something. Assistant Consumer Advocate 2. Now, how many, are all those white, too?
A No. There is one black male. I don't have the
figures broken out that way. Q They all look alike to me.
A One black male, two white males and four white
females.
Q Let's go down to your Assistant Consumer Advocate
1.
A That is vacant right now.
Q Let's go to your Administrative Officers.
A I'll run right through it for you. We have an
Administrative Officer 5 who is white, male. The
Administrative Officer 2 at the moment is a white female.
Q I see Administrative Officer 3 here.
A I know that, but that's not the present position.
Hopefully, by next fiscal year, that is laid out in terms
of beginning July 1. That is not what I have on the staff
at the moment.
Q How about these four Administrative Officers Is?
A One handicapped male and three white females.
Q Is the handicapped male black or white?
A White.
Q He's white, too. Let's go to your Administrative
Assistant 2?
A That is a Chinese-American female.
Q Let's look at your Clerical Supervisor 1.
A The Clerical Supervisor at this instant is a black female working out of pay class.
t Q Working out of what?
A Working out of pay class. The person who is
holding the position permanently is on maternity leave and
the next ranking person in the office is a black female
and she is now holding that title during the time the other
person is on vacation.
Q At her same salary?
A Of course. She gets paid out of class.
Q Let's look at your Clerk Typist 3.
A Technically, that is vacant because that person
is acting as a Clerical Supervisor at the moment. That is
the person who is acting out of pay class. That normally would be a black female.
Q 1 said is that person black or white?
A I said normally is a black female. Q Normally, but what is it now?
A At this instance in time the position is vacant because that person is performing the Clerical Supervisor position.
Q But who is filling that slot now?
A Nobody. It has got to be left vacant so she has a position to go back to.
Q You have two Clerk Typist Is?
A One is a Puerto Rican woman and the other is a white woman. Q You have a Clerk Typist 2, you have one, is
that right?
A No, Clerk 2.
Q Clerk 2?
A That is a white female on maternity leave.
Q And you have a Clerk 1?
A White female.
Q Have you looked at the percentage of blacks and
other minorities in your department?
A Yes. I have 7.7 percent black. The total
minority complement is 5 out of 27. Excuse me, minority
and handicapped total and black makes up 7.7 percent of it.
Statistics don't mean much when I am talking about two or
three people. What 1 have is two blacks, one Spanish
surname, one Chinese-American and one handicapped in the
office and the office, between the balance of male to
female, we have 15 females in the office and 11 males.
Q Can you tell me, tell this Committee, why, in
the higher areas, that blacks don't seem to qualify for
any of the top positions? The three or four, is there a problem there?
A I don't think there is any problem. I don't
think the premise of your question is correct.
Q What?
A I don't think the premise of your question is correct. I don't think there is any problem.
Q Would you like me to rephrase it so it will be
suitable to you?
A Fine. We have hired, in the little over two
years, two years ten months that I have been Consumer
Advocate, I have filled ten positions. One of those ten
positions filled by a white male. The remaining nine were
women and minorities, women and minorities. My hirings,
if you are talking statistics, 30 percent of my hirings
have been minority hirings from the time that I have been
on the job and 90 percent of them have been female hirings.
So I don't think that is the case. There is not a tremendous
amount of turnover in the office. People who are holding
senior positions there have been there for years and there
has not been a tremendous leaving of senior people for
other people to move up.
But to go through the promotions, for example,
Representative, the black attorney on my staff is an
Attorney 1 who was here last year. He is an Attorney 2
today. The Spanish surname clerk was a Clerk last year
and now is a Clerk Typist. And the black female typist is
now, at least temporarily, being paid as a Clerical Super
visor. So I don't think there has been any difficulty. And
I think within the latitude permitted by turnover, that we have made tremendous strides compared to where I was four years ago when I had one female attorney on my staff and one
minority in the whole department. It is not a big department.
When you add three or four people, it changes the numbers
around.
Q May I ask you another one?
A Yes, s ir.
REPRESENTATIVE DEAL: Mr. Chairman.
CHAIRMAN PIEVSKY: Yes.
BY REPRESENTATIVE DEAL:
Q You do let contracts, outside contracts?
A Yes, sir.
Q Can you tell the dollar amounts of your total
contracts you let out?
A It is over a million dollars a year. Something
slightly less than half the office budget.
Q Can you tell me what percentage of that million
dollars went to blacks and the percentage that went to
females?
A The consultants are corporations. So I can't really do it perfectly. Certainly there are a number of female consultants who work for the office. I'd have to go and check. I don't know whether the consulting firms that we deal with have black associates in them or not. In terms of the people who have testified for us, actually taken the stand, I am not aware of any black witnesses who have taken the stand for the office in the last year. I am aware of
female witnesses who have taken the stand for the office.
Q Would you be kind enough, since you have time
after this, see if you can get that information.
A About what the --
Q It seems that with a state like ours and a
policy that is supposed to have been set, I don't want to
give you a hard time today, but I think you ought to have a
little time to look at the dollar amount that is being spent
and somehow you ought to be able to tell, if you cannot now,
I would hope that you would investigate these companies we
do business with to see whether or not they do employ blacks
and what percentage. And also make sure females have a shot
at these.
A Fine. I can try and get that information.
Q Would you forward that to our Chairman?
A Sure. Just so we understand each other. That is going to take some time, because I have to get in contact with 40 or 50 consulting firms that do business with us and get them to, in turn, do a census breakdown. So it's going to take a little bit of time but we can get that.
Q I'm sure you drew up a contract with them and
I'm sure you will be able to do this.
A Oh, we'll be able to get it. It may just take several weeks that is all. REPRESENTATIVE DEAL: Thanks so much. Mr.
Chairman, are we talking with the Commission itself now or
are we —
CHAIRMAN PIEVSKY: Anyone you want to direct your questions to.
REPRESENTATIVE DEAL: May I ask the different commissioners, when we were here last time, I questioned the makeup of the Commission's staff and it appeared at that time that the Chairperson seemed to have had a mix that were more in keeping with the democratic process in our state.
And at that time, it seemed that some of the commissioners may not have been as involved in having blacks on their staff.
I would just like to .now, Mr. Chairman, if I may have an accounting from each of the commissioners and then tell me how many people are on their staff and break it down to blacks and females and other minorities.
MRS. TALIAFERRO: Representative, Mr. Chairman,
I would begin, Representative Deal, it may surprise you but at this present time, this instant, my staff complement has shifted in the reverse for the primary reason that my senior attorney is now the Deputy Chief Counsel for the Fixed Utility
Division of the Law Bureau has left my staff.
That leaves me with six individuals. Two of which are minority, three of whom are non-minority because t of that vacancy in my office.
BY REPRESENTATIVE DEAL: (To Mrs. Taliaferro)
Q When you say minorities, Madam Chairperson, what does --
A I will give them by title. My Executive
Assistant is a non-minority white male. My Administrative
Officer 2 is a minority female. One is a non-minority
Administrative Officer 1, non-minority white female. My
Receptionist Clerical Assistant is non-minority white, but my Information Specialist is a minority female. As I say,
I have a vacancy in my office currently for an attorney of which I'm interviewing and I will tell you most likely will be a minority.
Q When you say minority, just so I'll be clear —
A I'm referring to black.
REPRESENTATIVE DEAL: Is there another commissioner would be ready to respond?
COMMISSIONER FISCHL: Mr. Deal, I have five people on my staff. Two are white females. I have no blacks on my staff.
BY REPRESENTATIVE DEAL: (To Commissioner Fischl)
Q You have no blacks?
A No, s ir.
Q Have you tried to get any?
A Yes, I have. Q What have you done to try to get some?
A Well, I've gotten three names from Mr. Henry
Evans. The three names that I've gotten do not fit the
position I need. I need a special position in my office
to handle the technical aspects of the job.
Two of them, by the way, were attorneys and I
already have an attorney.
REPRESENTATIVE DEAL: The next commissioner.
COMMISSIONER SHANE: Your question, sir.
REPRESENTATIVE DEAL: My question is how many
persons do you have on your staff as a commissioner? That
is the first part of the question.
The next part of the question is I would like
to have you break it down to blacks, women and other minorities.
COMMISSIONER SHANE: I have six persons on my staff; three white women.
REPRESENTATIVE DEAL: I didn't hear you, sir.
COMMISSIONER SHANE: Three white women.
REPRESENTATIVE DEAL: Three white women.
COMMISSIONER SHANE: One black man and two white men.
I would like to add that I find this annual interrogation by you insulting and demeaning. It makes me very angry. I hired the black man on my staff because of the quality of his product. And I find it humiliating
and demeaning to undergo this kind of interrogation on the
public record. I feel you are misperforming your duties
to subject us to this each year. I want you to know
I bitterly resent it.
REPRESENTATIVE DEAL: Mr. Chairman, I guess while the commissioner is bitter because a person that
has been elected by a constituency that would come before, would sit at a hearing, not attempt to call names but ask
an intelligent question, and to find that a commissioner, because one asks the make up of his department, he would have the audacity to take a slap at a member of
this House that asks a sane and a responsible question.
You may find it insulting, but I find it
a disgrace that a member of one of our bureaucracies could sit there publicly and make a statement like you made to a member of this House who has done nothing but offer respect other than to ask you whether or not you have been concerned about having a department that reflects a composition of the Commonwealth of Pennsylvania.
I'm disturbed that people like you will be sitting on a committee and become upset because people ask you about the composition with the hope that those who serve in our government would properly represent this government. And because I am concerned enough to want to make sure that those persons who are prepared to make a
meaningful contribution to this Commonwealth be given
that opportunity; and I'm sorry that insults you. And
I will be raising some other questions about your remarks
to me as a representative of this Committee. When I
thought I had accorded you the respect that was due that
as a member of this bureaucracy. I wonder what you did
when you sat on the Committee.
Thank you, Mr. Chairman.
CHAIRMAN PIEVSKY: Representative Evans.
REPRESENTATIVE EVANS: Mr. Chairman, as a
colleague on this Committee, and I do certainly have a lot
of respect for Commissioner Shane, I disagree totally with his statement to Representative Deal. Certainly as a member
of this House and a member of this Appropriations Committee,
I have been on this Committee for three terms. Certainly members have a right to ask questions. And again, I would
say that, Commissioner Shane, you owe Representative Deal
an apology because he only asked you a question. I also have some questions to ask you and I hope you also give me
that kind of an answer because I will keep you here all day asking you questions. I resent that greatly that you would say that to him when he is only asking you a question.
BY REPRESENTATIVE EVANS: (To Mrs. Taliaferro)
Q My question is to the Chairperson of the Commission. My favorite subject, Philadelphia Electric
Company, Limerick 2. What effort is the PUC making to
audit and monitor the construction of Limerick 2? You are
the Chairperson, right?
A Yes, I am, Representative Evans. With respect
to the ongoing audit activities, I would ask Mr. Dial to
stand up and identify himself. Limerick 2, you should,
I am sure you are aware of, is not complete. The construc
tion of Limerick 2 is not complete and the utility has not
requested it in the rate base. We have been dealing with
Limerick 1. And what the Commission's actions were up to
this time were to tell the utility what it could expect when and if they then came to the Commission at some point in the future.
Mr. Dial, do you want to add concerning activities of the Audits Bureau with regards to Philadelphia
Electric Company?
CHAIRMAN PIEVSKY: Mr. Dial, would you come up front so the court reporter can hear you?
MR. DIAL: There are two major construction projects in the state, Beaver Valley 2 and Limerick 2.
We are concluding, within a few months of concluding, a construction examination of Beaver Valley 2. We are not at Limerick 2 as of now. We have done Limerick 1. This is also tied into our request. Several of the positions we have asked for involve construction auditors. I'm sure
we'll get to Limerick 2 very shortly.
REPRESENTATIVE EVANS: Excuse me a second. Not
that I'm not interested in Beaver Valley. I've got some
good friends in Beaver Valley and I am concerned about
their rates too, but that was kind of a half-baked answer.
Are you saying to me at this point you have nobody monitoring, on top of the situation, in terms of Limerick 2 audit because
they haven't submitted a request to you in terms of a
rate increase?
MRS. TALIAFERRO: No, no. I misunderstood
part of your question and where you are going, Representa
tive. With respect to the Act 114 requirement, if that
is what I think you are addressing, the requirement for
the audit, what Mr. Dial and I am explaining to you is
that that is involved in our current budget. If you
recall, the Act just recently passed. We have just requested the number of people to start that activity with respect to Limerick. We have on board the people who have been able to start with respect to Beaver Valley.
Just a matter of plugging it into our cycle.
BY REPRESENTATIVE EVANS: (To Mrs. Taliaferro)
Q What is the time frame? When will this occur and how quickly will it occur?
A Well hopefully, if we receive the supplemental budget, we could begin rather quickly with identifying and
hiring those individuals and they are off and running.
If we have to go through the full executive
budget process, we not only have this distinguished body's
actions to conclude, we have to conclude the Senate actions
and we have to conclude the actions with the administra
tion. And it is only at that point, hopefully somewhere
before March ends and our assessment on the utilities are
due, then we will be beginning. So you are talking a
matter of a few months.
Q In the case of Beaver Valley, are those reports
available to the public? Is that information available
to the public in terms of the auditing process as to
exactly what is occurring?
A The current audit?
Q Yes.
A I understand that Beaver Valley will eventually be available to the public. It is now part of the rate
case. It is not yet available to the commissioners until
that case is concluded. It is part of the record. It
is being testified to, brief cross examined. But it has yet to come to the commissioners. In other words, it has got to get to the administrative law judge first and then to the commissioners.
Q So then once you have your staff in place, I assume you will have an auditor for on-site when it comes
down to Limerick 2?
A That is I believe the plan.
Q Philadelphia Electric spent five million dollars
on Limerick 2 on its case. All of it seemed to be paid
by the ratepayers. What incentives are there to insure that
rate case expenses are reasonable and efficient?
A The Commission has always had, as part of a
rate case decision itself, the ability to review the rate
case expenditures of the utility. We have, in the past,
in other cases made deletions or not allowed certain
percentages of the rate case expense.
We have also gone through a cycle of disallowing
from up to 50 percent which the court struck down to our
current position, 1 believe, is to normalize a certain
percentage. In other words, rate case expenses spread out
over a certain period of time.
Q Is that documented where you can show —
A That is part of the rate case order and it
is available to you. I would be happy to provide you with
the information coming out of the Philadelphia Electric
case or any other case that you would be interested in.
Q Particularly the Philadelphia Electric case I would be interested in. My understanding is as a result of inflation costs are down and the cost of money seems to be down, why should there be that utility rates reflect current conditions? It appears that the people are saying we don't have the same interest rate that we have had and the cost of inflation, it seems that for some reason when it comes down to utilities, it is not necessarily adjusting to current conditions. What is your exact response?
A Well, I would have to disagree with you on that.
I think the Commission is quite accurate in reflecting a decline in the interest rate and other economic indicators in our overall rates of return and in our returns on equity and I think you would see that trend. For example, if you were to look at the returns on equity of water utilities which we have had a recent crop of cases, you would see that the Commission's overall return, except in a few unique cases, has reflected a downward trend. I believe the same is true with respect to gas cases. The electric cases, it is difficult for me to categorize it right now because we have just completed Met Ed and PenElec, but I know Duquesne is in, Philadelphia Electric was last year. So you have a spread of a time period there that you don't have, you know, in some of our water and gas cases. And our telephone cases, I believe, except for the large, well even the
Bell case, the last major Bell case would show a decline in those returns. Now a percentage point or a half a point may
not be significant but that indeed represents several
thousand, millions of dollars.
Q Again, I assume this is documented? You can show
us exactly the --
A That t r e n d is provided to the commissioners with periodic studies by our staff and it is available.
If you are so interested, then I would provide the
information to the Chairman for the Committee.
Q I would suggest that you do that, Madam
Chairperson.
MRS. TALIAFERRO: Excuse me, Representative.
COMMISSIONER SHANE: I just want to add one
thing. Furthermore, our financing section, the people who do the kind of financial analyses of these utilities has been active in a very informal way encouraging
companies to refinance debt at lower interest rates. It could be that somebody took out, issued bonds a few years ago at 12 percent. Our employees have been very active in pushing and encouraging that utility to refinance that debt to take advantage of the lower interest rates.
MRS TALIAFERRO: If I might add, that is a very good point. If I might add to that, I believe I could provide that kind of information to you through the
Chairman. Those companies that have refinanced in the last two years, the coupon high debt, rolled it over under the
new rules to save the ratepayer several thousands of dollars
in interest that would not otherwise be noticed by anyone just following the superficial issues, because that is a very technical issue and not normally picked up and reported.
REPRESENTATIVE EVANS: Another question, Mr.
Chairman.
BY REPRESENTATIVE EVANS: (To Mrs. Taliaferro)
Q Madam Chairperson, utility rate cases, how are
they generally paid? Utility rate cases, the consumer basically pays for the rate case? The utility passes that on?
A The utility will put it in. I believe the
Consumer Advocate also has something to say with certain
expenses and other interveners in the case as well as
the Commission staff. At this point, it is going to be our Office of Trial Staff. At that point the exceptions are taken. The judge rules on it and the Commission then resolves only those outstanding issues of which exceptions, you know, still remain. We do not rule on all the issues.
Q But the cost is passed onto the consumer?
A Not all of it. Several thousands can be disallowed.
Q The question is — this was passed onto me at one time when Cliff Jones was Chairman of the Public Utility Commission, that at one time the cost was split between
the ratepayer and the shareholder?
A Right. I was a member of the Commission at
that time. I understand the issue that you are raising.
Q Why not now?
A The court disallowed that and reversed that decision of the Commission and remanded it and put it right back to us.
REPRESENTATIVE EVANS: Thank you, Mr. Chairman.
CHAIRMAN PIEVSKY: Bob Priest, Majority Staff,
to follow up on Representative Evans' questioning.
BY MR. PRIEST: (To Mrs. Taliaferro)
Q In the area of the auditors on electric generated facility construction sites, as was required by Che sunset institution, what type of constraints or guidance or instructions do you, as a Commission, give to a person who is going to be performing that function or are they going to be out there with a fairly free rein to pursue that job as they feel is necessary on site?
A First of all, the process would work more like this. We would ask our director of the bureau what it is his plans are for job description and responsibilities.
I am sure that his plans would include a comparable description of the kind of quality audits that we have had experience with being applied here to certain standards being applied. Only where he has a question and feels
the need of direct Commission involvement and direction would he come to us through the Director of Operations.
Let me put it this way. We don't tell our managers what to do. They are supposed to know that or
they wouldn't be managers.
Q I would just like to get that on the record.
On page 4 of your budget request, the blue book, you referenced a need for additional personnel, mandating the additional management efficiency audit in addition to construction cost audit. Then on page 45 of that book you seem to indicate that additional personnel would permit an additional 15 such audits annually amounting to some
$45 million in savings to ratepayers. I just wanted to find out how you arrived at that saving estimate?
A I'm going to have to have Mr. Gillert answer that who is responsible for those calculations and Mr.
Dial to assist him if he doesn't answer fully.
MR. GILLERT: I'm going to have to ask Mr.
John Dial.
MR. DIAL: First of all, there has never been a management efficiency a'udit done per se as spelled'out in the legislation. We are just about to start those with the new personnel you are aware of.
The savings were calculated based on the management ones we have done in Che past.wi th outside
consultants. We estimated, based on the kind of savings, we will be able to come up with new management audits.
We expect to come up with a similar type of savings in the
efficiency audits.
BY MR. PRIEST: (To Mr. Dial)
Q How many of the personnel that are being
requested would be in the area of performing these 15 or
so additional audits?
A We have asked, in my bureau, we have asked —
I think there is 13 people in total, five in the Commission
as provided from other sources, the other eight are in this budget I believe. In short, a total of ten of the
13 will be involved in this project.
MR. PRIEST: Thank you.
MRS. TALIAFERRO: If I might add for just a
full picture, the five that the Commission provided already came from taking the then vacancies that were
in existence at that time. Three came from the Rates
Bureau, one from the Law Bureau, one from the Bureau of
CEEP to provide him with at least five that we could provide immediately. Now what we do when we do that is we ask the other bureaus to go on hold and not fill their complement until we put the remaining eight here in the supplemental request and here in the executive request. CHAIRMAN PIEVSKY: Representative Cappabianca.
Did you want to say something?
MRS. TALIAFERRO: Well, we were trying to make clear the point that those five were immediately shifted as an immediate response to Act 114.
CHAIRMAN PIEVSKY: Representative Cappabianca.
REPRESENTATIVE CAPPABIANCA: Thank you, Mr.
Chairman. I would like to direct my questions to Mr. Barasch.
BY REPRESENTATIVE CAPPABIANCA: (To Mr. Barasch)
Q Mr. Barasch, I would like to thank you for the article you sent me from the Chambersburg Public
Opinion. It afforded me the opportunity to direct some questions towards you. You seem alone there.
A Nobody has been asking me any questions.
Q Mr. Barasch, I think you are aware of the fact that over the past four years I have been interested, with many other small businesses in the Commonwealth, to develop legislation which would create an office of advocacy for small business in Pennsylvania. You are probably aware that many different forms of legislation has already been drafted. In fact, the House passed
2105. It was sent over to the Senate, and of course, that is where it died.
However, as my question basically is in regard to that area. It was also my understanding that you have supported, in both private and public meetings,
an office of advocacy for small business. Would you please
tell this Committee your feelings of creation of such an office? Who should be the administrator of such an office?
By that I mean do you believe that it should be in the
Attorney General's Office? Should it stay like with 2105 within the PUC or about where?
A Well just to clarify things, I don't mean to draw a major distinction, but basically what we have talked about both publicly and privately is from my perspective, if the office has no objection to the creation of a small business advocate, 1 am certainly not out there running the flag to create one. 1 basically feel that if the Legislature, in its wisdom, feels that small business customers in the rate design area are not getting sufficient particular representation, and they wish to spend money or create an institution to do that, I certainly have no objection to it. The sole difficulties we have ever had have been as a matter of canons of ethics and whatnot, I do not feel that my office could legislatively commit to represent two potentially disparate interests. And if it was going to be created, it should be created someplace other than in the Office of Consumer Advocate.
Whether it should be in the Attorney General's
Office or the PUC, I don't have a view. I simply don't have a view on that and I think that is up to the Attorney
General's Office to comment on or the Commission to comment
on or the Department of Commerce to comment on or whatever would be out there. That is basically where we are oh
the issue I would say.
Q The bottom line you feel there is room for an advocacy for small business somewhere in this Common wealth?
A Yes. The situation is this. I think one of the things that has happened here is some of the reasons why this idea got moving a few years ago have changed.
Basically, the big issue now, in public utility regulation in the area of rate design, from my perspective, is that captive customers have one set of interests and what 1 call the shoppers have another set of interests. And basically what has happened, particularly in the telephone area and in the gas area for sure, and increasingly in the electric area is there is some forms of competition that are emerging and basically the battle lines get drawn between those who can shop for service and those who can't.
Increasingly, small business and small industrial concerns end up being on the same side of the issue; that we have been on, some of these issues, but that can change. Five years from now perhaps the regulatory posture and the economic posture would be different and we could be at odds again. But very recently, and this is what I wrote to you
in the letter, there have been a number of cases where
our office found itself by doing the traditional, economic
and engineering analysis that we do, taking positions that,
of course, favor the interest of the small residential customer.
But the same analysis also saysdon' t. hit the .small commercial or
small industrial customer with a large rate increase. I
should say that is a fluke of the moment and it could continue
for ten years or could continue for ten months. But it
basically arises from the fact as large industrial customers
and large commercial users in the telephone area get into
the position where they can basically say, if I don't get
the price I want, I am leaving, we end up in a situation
where the Commission has to consider whether they are going
to take the remaining revenues and collect it from the
small business and small residential customers or basically
stare down the large users and say, you are going to pay
the cost of service just like everybody else. That is
kind of. where the issue is shaking out now. That is why
things have changed a little bit over the years that we
have been talking about it.
Q I might have to agree that perhaps disparity
in rates have shrunk, if that's the proper word, between
the commercial small users and the others, nevertheless
it is the feeling of the small business community that they still would like some representation when they go in front of the Commission when they have to argue these rate
increases due to the fact that they don't have the where withal, capital and whatnot to appear in front of the
Commission. That seems to be the bottom line argument.
A I think in the major cases that are tried, that the interest of all consumers at this instance in time is being aggressively and professionally represented either by my office and now you have the Office of Trial
Staff to also perform the function similar to that. I think the issue breaks down to a much narrower issue which is in those cases where the particular interests of a group of small commercial or small industrial customers might be other than what the residential class interest is. In many of those cases, there is no independent representation.
If the Legislature believes that is the problem of magnitude to mandate this, then I have no objection to it.
Q 2105 has indicated at least half of the General
Assembly approved. It passed overwhelmingly when it went over to the Senate. The next question, Mr. Barasch, rate cases involve two basic questions I understand. First, how much money utilities should be allowed to collect from the ratepayers, and second, how increased rates should be allocated among those ratepayers. Now, in the recent editorial that you sent me in the Chambersburg Public Opinion newspaper, it states, I will try to quote this here, "However, in the case where the interests of small business customers are consistent with our efforts to set fair rates for the residential class, we advance the
interest of small business customers as well."
Can you give this Committee a specific case where you advanced the interests of small business?
A Somehow 1 knew you were going to ask me that question today. A couple of examples, most recently the
Philadelphia Electric rate case, Limerick 1 rate case
that has gotten so much attention, the company overall was looking for about a 30 percent rate increase for all classes of customers. The evidence that we put in in that case suggested that the residential class, if you could get them to split the question how much money they should have gotten, we were a million miles away from Philadelphia
Electric's. On the question of how the pie ought to be divided, the analysis that we did with our engineering and economic support suggested that an average rate increase for the residential class was the correct level of rates for residential customers. But that the small GS customers, which I think is the person you are interested in, deserved a considerably less than average increase and our expert witness testified to that.
The PUC did not adopt the rate recommendation that we made and the rate increase was spread equally among all classes. In that particular instance, the engineering analysis we did led to saying that certain customers should get even a smaller rate increase than residential customers and that is exactly the testimony we put in.
In the current Duquesne Light rate case, the other end of the state, the company has proposed giving small general services customers and residential customers considerably, not considerably, above average increases.
The testimony that we have suggested drops the contribution for commercial customers to the average level and recommend a, below average increase for residential customers. The administrative law judge has handed down a decision in that case and he didn't agree with us and recommended giving small commercial and residential customers an above average increase.
To put this in context, this is going on the very same time when we have industrial development rates, lower rates for industrial customers in the Duquesne Light service territory. So, in the Duquesne Light case right now we are trying to hold down the rate increase in the rate design area for both residential and small commercial.
Other cases, if you want the details, I won't give them to you now, is the People's Natural Gas case where the company was trying to collect twice the average increase from commerc ial and five times the average increase frbm
residential. We recommended considerably less rate increases
for both of those classes. Also, in the National Fuel Gas
case, I could go on. But those are some of the recent
examples I am talking about.
BY REPRESENTATIVE CAPPABIANCA: (To Mrs. Taliaferro)
Q Representative Flick asked me if I would direct
the same question to the Commission. Would you like me
to repeat that question? I asked the Consumer Advocate,
in the case where the interests of small business customers
are consistent with our efforts to set fair rates for the
residential class, we advance the interests of small
business customers as well, can the Commission give
this Committee specific cases where you advanced the
interests of small businesses?
A Well, first and foremost, I am clearly at a
disadvantage here. The Commission responsibility, under the law and regardless of the Act 114, is to represent
the interests of all the consumers, and in the development
of their positions, take a balancing position for all
classes of consumers. We don't get to selectively say we arc going to advocate for residential and not pay
attention, in this case, to the industrials or to the
large commercial or small commercial. We have to put it
all together in there. No, I don't have the cases. We can provide that, the last year's cases, and the positions and what the results were. The bottom line is the actual results to small business consumer. The bottom line is important.
In my view, what you advocate isn't as important as what happens, because that is what they are ultimately claiming.
We can provide that information.
If I might go back and just add gratuitively a comment on the small business advocacy. I would suggest, given the new Governor, Governor Casey's position with respect to the Department of Commerce and a task force,
I would suggest that this is a very ripe issue for that task force to take up and to study.
BY REPRESENTATIVE CAPPABIANCA: (To Mt. Barasch)
Q One final question to the Consumer Advocate,
Mr. Barasch. The recent statistics indicate that
Pennsylvania has the highest disparity among states with small commercial users, according to that article again, than paying 46 percent more/residential users for the same amount of electricity. Are these statistics demonstrating, in your opinion, an insensitivity on the part of the Consumer
Advocate with regard to small businesses operating within the Commonwealth? What do you feel we can do to correct the situation?
A Absolutely not. I think my earlier answers to you answered that question.
Q Is the study wrong then?
A Well, I haven't seen the study, but the last
time I saw the Cabot Study, the last time I saw that study
a couple years ago, it had one huge, erroneous assumption
which was the company's cost of service methodology was
the right one. And I don't believe most of the time the
• company's cost of service is the right one.
The question of whether somebody is subsidizing
somebody is a question of where you assign costs. This
office consistently has favored cost of service based
regulations. Where we have our dispute is over What the
costs of service are. I just gave you a half dozen examples,
referred to a half dozen examples. Many of those examples
will produce lower rates for both residential and small
commercial and small business customers in today's market
conditions where some customers are captive and some are
free to shop around.
And as I say, the sensitivity, I don't set the
rates. Hopefully, I advocate and I could totally agree
with, the Chairman. It is certainly something that is an
occupational hazard of what I do.
Q Let me ask you. What was the rationale for
establishing the Consumer Advocate?
A Well, there was a Legislature, Q No, no, no. I understand that the Legislature
in its infinite wisdom makes lots of mistakes.
A I don't think it was a mistake.
CHAIRMAN PIEVSKY: Do you want to strike that
from the record?
(Laughter.)
BY REPRESENTATIVE CAPPABIANCA: (To Mr. Barasch)
Q I want to know the rationale why —
A I think the rationale for forming the Consumer
Advocate's Office was to provide professional and competent
representation in PUC proceedings and in federal proceedings .
to the consumers of Pennsylvania. As I said, in terms of
where the money matters, I feel confident that with the
budget support that we have gotten from the Legislature
in the last several years, that the consumer interests
are being fully and vigorously represented, and professionally
represented in most cases.
Q I don't disagree with what you're saying. All I'm saying is there perhaps may he a. rationale for a Consumer Advocate
for small business?
A Oh, yes. I wouldn't disagree with that.
REPRESENTATIVE CAPPABIANCA: I say that to the
Commission, too. Thank you, Mr. Barasch. Thank you, Mr.
Chairman.
CHAIRMAN PIEVSKY: Representative Pistella. COMMISSIONER SHANE: Mr. Chairman.
CHAIRMAN PIEVSKY: Commissioner Shane.
COMMISSIONER SHANE: I would just like to add in the way of history, I was the floor manager in the
House of Representatives for the Consumer Advocate Bill. Phil
Kalodner (phonetic) used to pull me back in the lounge room and keep pumping me full of facts and arguments and then he would send me out on the floor to do battle.
My recollection is, we did have something,
I guess we would have to go back and look at the transcripts of the legislative proceedings. I thought we had'some thing broader in mind when we passed the Consumer Advocate Bill than just the residential customers. But be that as it may, let's accept Mr. Barasch's point that maybe it is impossible to do both.
I think the genus of the bill, which we defended on the floor of the House, was keeping it separate from the PUC and make it a part of the Attorney General. I think that was a critical decision we made in the amendment process, as we were debating the Consumer Advocate Bill.
My own opinion would be the same rationale applied to the small business advocate, but apparently this orphan is having trouble finding a home. We discussed with
Representative Cappabianca privately that if the orphan has no home, possibly something could be done to set it up in the PUC provided you funded it with general funds with the understanding that as soon as you stopped appropriating general funds, it would instantly disappear.
CHAIRMAN PIEVSKY: I told you to stay with us,
Commissioner Shane. Representative Pistella.
REPRESENTATIVE PISTELLA: Thank you, Mr. Chairman.
BY REPRESENTATIVE PISTELLA: (To Mr. Barasch)
Q Mr. Chairman, I have a question for Mr. Barasch to begin with. Sir, on page 6 of your budget request, the OCA proposed budget requests an increase of $34,200 for expert witness fees. In the past, we have requested increases for expert witnesses often times in substantial amounts. It would appear as if what you are saying, according to your document, you are attempting to fall within the three percent budgeted guidelines proposed by the Governor's Office. The question I have for you, sir, is do you feel, with the amount of money that you are requesting, the sum of $34,200, that you are falling into a category, as far as budget appropriations, that you want to be for your expert witnesses.
A It is a very good question. If there had not been some major changes in the kind of tide of regulations, we would be needing a whole lot more than that.
In years past, Representative, we spent almost every penny of the office's expert witness budget simply providing a defense against a continual stream of rate cases that
companies were coming in and asking for rate requests.
In the last year or so, there has been a marked
decline,with some notable exceptions,being the two extremes
of the state. We have Duquesne Light and Philadelphia
Electric still engaged in some construction programs that have some problems. With the exception of that, we have
seen a marked decline in the number and magnitude of rate increases that are being filed. This has made it possible to do what I told the Chairman last year. I
got the same question from Chairman Pievsky last year.
Allowing us to start to shift sizable portions of our resources to do what we always wanted to do which was more
affirmative kind of things. Such as going to Washington and providing vigorous prosecution before the Federal
Regulatory Commission and now we are in front of Internal
Revenue Service. We are fighting the Internal Revenue Code.
That is something we were not doing a couple of years ago.
We have also done a lot more in the general area of exploring gas costs, purchasing practices of the gas utilities. In the electric area, we have done a lot of work in terms of how power plants perform.
Because there has been a slackening off of other rate case activities, typically defensive work that
this office spent the first eight or nine years doing, we can ask for a three percent kind of ration' adjusted increase
our expense budget and be able to cover the water front.
If a year or two from now inflation reignites, I will not
be able to continue to cover the areas that I am covering
with this kind of an increase. But in the present
environment, I felt we could do a solid job with that
budget request.
Q The reason I ask, you cited on page 3 that
in some cases the actual cost for expert witnesses could
range from 50,000 to $100,000 per case.
A That is correct.
Q And the $34,000 budget request seemed to be
insignificant within that context?
A It is also insignificant, Representative, I
have some statistics. I'm sorry. If Representative Evans were still here, it would be very timely. Even though we
spend a lot of money, in the Limerick 2 prosecution, the
company spent five and a half million dollars putting on
their side of the case why the plant should be built.
I think we spent about $200,000 trying to stop the building
of the plant. So the numbers are all totally out of whack
in terms of what the companies can ask for and largely get back from the ratepayers.
But I have confidence that we can handle the
increased level of activity at the Federal Energy Regulatory Commission and the FCC and also the affirmative litigation we are beginning such as the tax litigation. We have complaints against Bell Telephone to roll the rates back. We are looking at other companies. I think with the ' present budget we can handle that as long as inflation 1 does not reignite. i Q So you are comfortable with the amount of 1 money. It allows you to maintain the level of expert 1 witnesses needed for the usual rate cases. In addition, 1 you are capable now to go into other areas in which the Consumer Advocate has not gotten before? » • A Well, we have been encouraged, for several > years running by this Committee, to expand our activities i in certain areas. And we have been given sizable ) budgetary increases to do that and we have been able i to make major expansions of our activities on these more affirmative fronts in the present environment. i The trouble I always have every year is trying > to guess what is going to happen. I know what I would like i to do, but I don't know what the utilities will do. What always happens, you put the fires out first before you go out to do the things you would like to do. And with fewer i rate cases being requested now, we have more resources to go about setting rates at more appropriate levels. Q It sounds like what we do in the General Assembly * is try to guess what is going to happen next. I would like to draw your attention and the attention of the
Utility Commission board members to a report that was issued, an annual report 1985. This was forwarded to the members of the General Assembly September 1986. Mr.
Barasch, if I could in fact read some of the portions of that particular introduction. This is your 1985 annual —
A Oh, my annual report?
Q Yes. On page 1 dealing with the PP&L rate case you note that the PUC adopted $17.7 million in downward rate adjustments proposed solely by the Office of Consumer
Advocate expert witnesses.
On page 2 in the Bell of Pennsylvania rate case, you note another $47 million in downward adjustments.
Again proposed by an expert witness.
In the Philadelphia Electric Company energy cost rate proceedings, you note $68 million in costs that would not be charged to ratepayers based on positions developed and advocated by the Office of Consumer Advocate.
In those three cases alone, it is estimated that approximately $132 million would be saved as a direct attribute to the efforts undertaken by your office.
My question is this, and I ask this also again if I can reiterate to the members of the Public Utility
Commission, accepting that $132 million figure, give or take a few million dollars as to the accurateness of the exact
decision, is it your opinion that had the Office of
Consumer Advocate not in fact been in existence that these savings could not have been rendered to the consumers?
A It is such a hard thing, you know. The reason why those numbers are in there is some years we came before the General Assembly for our budget without them and the
Legislature said, well, can you give me any quantification of how you people earn your weight. So, we came up with, and have been using for several years, the most conservative way we know how to identify what we advocate. And what we do is we basically, any time there is a case where we and another party took comparable positions and both did the same level of work, we don't take any credit for that in the numbers that you are seeing there. We just go to cases where we presented a particular argument or witness and that position was adopted and that is the only numbers that are in there. From year to year it can vary widely.
It can be much lower than that. It also can be much higher than that.
I don't know how to say what the Commission or some other parties might have done had we not been there.
All I can say is that is evidence that we supported, there was no other party that presented the evidence and let you draw whichever conclusions you wish. I don't think there is any question, and I gather there is some sympathy from
you, that the office has paid for itself about a thousand
times over in the years it has been in operation.
To use some examples, in terms of what you
spent and what you get, in the Philadelphia Electric rate
case that we talked about, where one of our adjustments
was adopted, we analyzed what the cost was, the evidence we put on versus savings. In that case alone, for every
dollar of ratepayers' money that we spent, and it is rate
payers' money, we returned $672 to those same customers.
But I don't think you can really, I won't live and die
by those numbers. If the numbers are half next year,
I'm not going to say I guess^we're hal£-as.effective.
Q Unless we are in fact hung up on the total
dollar amount and as to who in fact should be credited with saving the money or not. Really what I am trying to
get at is more of a philosophical question. The question I guees is not in fact the total amount of money that was saved
and whether or not you are earning your keep. I didn't
ask what your track record was which in error of the super bowl, I guess, statistics are what everyone looks to. But more of a philosophical one, I guess the point would be
considering the volume of work the Public Utility Commission has, which could range in essence from answering questions
that my constituents would pose to me about their phone, their light or their gas bill. So the overwhelming amount
of research that is needed for them to render a decision
on a particular rate case, my question is more philosophical.
And that is, with the volume of work that they are under
taking, should this office in fact not exist? Is it
possible that certain savings would not be returned to
the customers because of the nonexistence of the Consumer
Advocate's Office?
A If I have to take a view, I certainly think
that is the case. There are cases where we are the only
party in the complaint. Right now, in the Bell Telephone matter, we are trying to get the rates rolled back, there
is nobody else pursing that complaint. Whether I will be
successful or not, I don't know. But there is nobody else
pursuing that complaint other than me.
Q That is in essence what I am trying to get at,
the philosophy of the question. I realize to ask the Public
Utility commissioners in turn, to respond to that is very difficult which is why I think they gave me the question.
The Chairman decided not to ask it.
The response from the Commission members,
in essence the same thing, with the volume of work that is undertaken by your department, would it appear as if
the Office of Consumer Advocate not existing, that certain things could in fact not be returned to the consumers and customers we serve?
MRS. TALIAFERRO: I think we would have to answer that in two parts. I think it is a little late date, frankly, to try to argue and even try to quantify the value of the Consumer Advocate. It has not been just proven and established in Pennsylvania but most of the country, most of the states in the United States have recognized the value of institutionalizing an advocate for individuals in the nature of what I would call sort of a class action voice. Rather than one or two individually coming. I don't really think that is debatable anymore.
What we might debate is who raised what issue first, who pursued it in-depth, and I will assure you I have got a lot of staff people who would love to go at
Mr. Barasch in some of those debates. But I think that debate is, personally, I believe that debate to be close.
I would go on record, and I have no qualms with stating, that there are many issues that the Consumer Advocate raises initially, is later joined, triggers the Commission.. with the question, the close relationship and working relationship with our staff. Sometimes just - knowing . they call in and say, would you look at this? There are many instances there where we do assist and I expect them to do that.
Now, there are also many instances where the Commission in fact may arrive at the bottom line which is
the same place the Consumer Advocate was going. But we
may have got there for completely different reasons and you
can only find that out by reading the orders.
REPRESENTATIVE PISTELLA: Thank you, Madam
Chairman, Do any of the other commissioners care to
respond?
COMMISSIONER SHANE: Just a couple of comments.
Number one, I think the Consumer Advocate has justified
his existence and should be allowed to continue.
Secondly, I think the existence of the
Consumer Advocate is good competition for our staff. I
think we all agree that when you are in competition it
tends to stimulate both groups. I think what you will see
in the big rate cases is sometimes alternate adjustments offered by our staff and the Consumer Advocate and sometimes we like the evidence and the calculations as done by the
Consumer Advocate best. Sometimes we like evidence and
calculations as done by our staff best. Sometimes we reject both. I think that kind of interaction and that kind of competition is healthy for the whole rate case hearing process.
I would like to point out to you a statistic though. In front of our administrative law judges at any single moment is approximately a thousand cases, 250 or so customer company complaints, billing disputes, 250 trucking and hauling rights, types of applications and 30 or so or 20 rate cases. I'm not going to go down through all of them. Our PUC staff has to handle all those thousands of cases. The point I wanted to communicate is we have about a thousand cases at the PUC at any one time.
The Consumer Advocate, naturally, husbanding his resources, probably participates in 40 or 50 of those thousand cases. I haven't gone and checked them. But we, at the PUC, our employees have to do all of them, the whole thousand plus the other thousands in our Bureau of Consumer
Services that are not in front of an administrative law judge.
MRS. TALIAFERRO: I was just going to add one little comment. I would point out one little thing, and
I think my colleagues would agree. One of the most significant victories in the courts recently is the PP&L case. I would tell you the major disallowance was
Commission initiated.
REPRESENTATIVE PISTELLA: I want to thank the members of the Commission and the Consumer Advocate. Thank you, Mr. Chairman.
CHAIRMAN PIEVSKY: Representative Book.
REPRESENTATIVE BOOK: Thank you, Mr. Chairman.
BY REPRESENTATIVE BOOK: (To Mrs. Taliaferro) Q Madam Chairperson, I just have one question.
Maybe you can verify this for me. Last July Governor
Thornburgh signed House Bill 1639 and it is now Act 114.
That contains some major changes within the PUC, especially
in regard to legal staff. Are you encountering any
difficulties in starting or making or implementing these
changes as far as legal staff is concerned?
A No, no. We have made, I think you are
referring to the creation of the Office of Trial Staff.
Q Yes.
A And the distribution; no, I don't think we
are having what I would call difficulties at all in the
division of the people and we have made the changes. I
have more detailed information if you are interested.
Q What have you done?
A The Commission abolished the Bureau of Rates
and we divided the sections of the Bureau of Rates and
set, most are reconstituted as part of the Office of
Trial Staff. We also took our Rates Division of the Law
Bureau and also added it to the Office of Trial Staff.
The other divisions of the tariff section and the
securities section that were in the Bureau of Rates went to the Audits Bureau and the tariff section, I believe, went to the Office of Special Assistants.
So we have made a pretty clean division of people according to the job descriptions, what they were
working on previously. A few of the people also in the
Rates Bureau went to our Bureau of Conservation Economics
Energy Planning. We have a pretty even distribution of *
experience. No one lost salary or salary increments that
they would have been entitled to had we not made that
division that way. It has not always been easy for us.
I would not characterize us as having any problems there.
REPRESENTATIVE BOOK: Thank you, Madam Chairman.
CHAIRMAN PIEVSKY: Representative Cawley.
REPRESENTATIVE CAWLEY: Thank you, Mr. Chairman.
BY REPRESENTATIVE CAWLEY: (To Mr. Barasch)
Q Mr. Barasch, did you mention that for every
one dollar of the ratepayers' money you spend, you say
they get back 672?
A That was one case only. The ratio varies from
case to case and only the ones that I quantify. Just to
use a ball park figure, let's assume for the sake of <
argument in a given year there is $100 million that you wish to identify as being my work. Then with a budget
of two and a half million dollars, means that I am returning
about $40 for every dollar I am spending. Other years
the numbers could be much higher, but I am not aware of
any years it has gotten anywhere close to our budget.
Q So your bottom line you are saving about $40 for every one dollar? i A It could vary from 40 to 100 from year to year
or 200, but certainly we're talking about orders of
magnitude. I don't think there has ever been a year as
low as 20 to one for example.
Q Would your office or does your office accept
complaints, let's say, about the quality of water?
A Yes, we do.
Q What do you do about it once you receive a
complaint?
A It varies from situation to situation. The
most notable case being the PG&W case where we found
ourselves developing an entire litigation position based
upon a tremendous amount of lay contact. As you know,
Representative, there were 100 or so lay complainants
who came in and we called them basically to come in and
testify as to the quality of their water service. As you
know, the result of that process was a Comntission decision to. disallow the entire rate'increase. That's the "most dramatic example.
We have had a lot, what we do do is when we
get complaints like this, we do a lot of informal checking
around with the Commission and DER to find out what is
going on. The problem we get into is certain kinds of
cases, it is very hard to justify the amount of resources
we would have to put into it for the impact we would get out of it. And a lot of those cases are being handled
by the Commission and their own trial staff and we are
not interested in duplicating work that is already being
done.
So what we do get, we get a number of them.
J We get a lot in the telephone area. We were very active
there, the VAS complaint. People looking for expanded
area of call. You have probably seen some of them. And
1 we have prosecuted probably a dozen or so of these cases in » front of the Commission.
1 Under our statute, we have the power to either
! proceed, the Consumer Advocate has the right and the
1 discretion to define the consumer interest and to proceed
[ on behalf of the consumers of his own motion. And we
> also, in the statute, it is spelled out that when we are
' petitioned by consumers, we have to then decide whether
' or not we are going to represent them in that proceeding,
1 and we certainly do that. As resources allow and as
1 circumstances allow. Some of the biggest cases we have i done come to us that way. The West Penn Power aerial
spraying case was the result of a woman calling us on the
: phone. She said she thought she was getting cancer because i they were spraying something on her backyard. It turns
out that that case was all because somebody called and
spoke to my investigator. So it varies a whole lot, Representative.
Q Other than, in other words, you are saying you do various things now. Let's stay with the water fdr a second. You made a fine case and I think the people up in the northeast were very happy that PG&W did not receive a rate increase. It was zero. And that was on a decision of the PUC. It also helped from your office from the testimony that you presented. Other than, let's say, you received a call now from someone representing a representative, several thousand people, that their water was not drinkable or their water was ruining their clothes.
What I'm trying to get at is what would you do then?
A The kind of circumstance you have spelled out is a situation that would call for action. If I get a call that indicates several thousand people can't drink their water, certainly if we have the resources we are going to take action. I think, first, I'm very pleased with this.
That the Commission went off on the theory that service and rates are interconnected before the Legislature passed the reform. So in a sense, it established, in my mind, that the Commission had, if you would, I am being a little bit loose with my language, a kind of common law right to connect those things. Now it is spelled out in black and white. There's a provision inserted into the Public
Utility Code, in the aftermath of PG&W, that clearly allows the Commission to use the rate-making process to penalize companies for poor service. We would certainly use that power or that attempted power to try and get compliance.
But in the end, what you are looking for in a case like that is not so much to get a rate cut. I didn't find the people in Wilkes-Barre thrilled with the mere fact that they have got to continue to pay no more for the lousy undrinkable water. What you are looking for in the end is to find a way to get the quality of the water service up.
I certainly think that is something that has to be done, too, and we have pursued it from both angles.
BY REPRESENTATIVE CAWLEY: (To Mrs. Taliaferro)
Q To the Commission, has the Commission placed any mandates on any of the water companies regarding the quality of their water, recent mandates or within the last several years? Such as new filtration systems or new pipes, mandates given by the PUC to water companies.
A We have an outstanding order to show cause with respect to PG&W. We have, the Commission hired its own outside engineering consultant to review any proposed plans of the company as well as actually review the system, the pipes, if you will, and the mains. We have that proposal. We have a response of the company coming into the Commission. It is there but the Commission hasn't yet taken it up. I also am aware that our Office of Trial Staff has intervened in the. order to show cause. So, that is the only company that I am aware of right now that has an official mandate.
We have, in addition, when we were alerted, either through Consumer Services of a. major problem or potentially coming in through our Law Bureau of a major breakdown of either service itself or water quality problems, we alert also DER and use the emergency order route in many instances where a commissioner or myself will be authorizing the Law Bureau to take immediate action in courtand ordering the company to do certain things.
I have been signing and authorized several small water company emergency orders in the last six months.
I can't, off the top of my head, give you the names but I could collect that information for you. But the major one is PG&W. We have had some small breakdowns. Redland Water was the most recent one that comes to mind for pipe breakages, etc. You know, there has been a breakdown in the delivery.
REPRESENTATIVE CAWLEY: Let me ask you --
COMMISSIONER SHANE: I was going to add something. Politics has been called the art of taking credit so I want to get my share. As soon as we did the vote on PG&W Bobby Mellow came up to me in a jubilant state and I told him he better make darn sure that this got written in concrete into the sunset law so my guy, Terry
Fitzpatrick, wrote that paragraph and we passed that onto
Senator Mellow, Lemmond and Musto, and it is now in the law at my suggestion,because that way the vagaries of new commissioners, etc., will be less likely to cause a precedent like that to vanish into the bureaucratic mist.
Next 1 would like to note that the company,
PG&W, filed an engineering study with us where they propose to put in quite a few filtration plants and they are talking a tab of about 130 to $150 million. So we may look like heros today but sometime we are going to have to suck up our guts and pay for those filtration plants.
BY REPRESENTATIVE CAWLEY: (To Commissioner Shane)
Q On that same statement, Mr. Shane, PG&W is mandated, to the best of my knowledge, right now to put in two filter plants up in the northeast, one at Nesbitt and one at Elmhurst, I believe, reservoir costing or expected to cost in the neighborhood of $40 million. Who is going to pay for those filter plants?
A That will be decided in a future rate case.
The engineering study, which I read about two weeks ago, you are right, it talks about Nesbitt and Elmhurst going in first. But the engineering study also contemplates nine others at various sources throughout the territory. I am surprised they didn't forward a copy to you. We would be happy to send you a copy of that engineering study.
Nesbitt and Elmhurst are first. This is their estimate now. It could change. They estimate, from their engineering study, some 130 to 150 million for the whole project.
Now, once those filtration plants are built and operating, I emphasize the word operating, then they would come into a rate case and it would be for the various parties to litigate what, if any, part of that filtration plant should be included in the rate base where they are entitled to get a return and their operation and maintenance expenses and I assume people from the area and the Consumer
Advocate and our staff and the company lawyers would all be in there answering the question you just posed. So it is a little early to say. That is several years away.
Q Even though it is several years away, I would appreciate it if the Consumer Advocate's Office would start looking, maybe you already have started looking into the fact that PG&W Water Company are mandated right now and have been mandated to supply clean potable water. And I believe,
Mr. Barasch, that you have said in the past publicly that they should have been using monies that they were collecting from the customers from the northeast to be putting in systems to make sure that their water was clean and potable. And now they may come back and say, here is a $140 million bill. We want all of the customers' rates to go up over
100 percent.
MR. BARASCH: I can respond to that in two ways.
First of all, unless my memory is bad, we have intervened into the investigation that Chairman Taliaferro referred to where those engineering studies are coming out for discussion. Certainly one way to make sure, just like when you build nuclear power plants, one way to make sure you don't get stuck paying for something you don't want is perhaps to raise questions about what the least cost manner is to meet the water quality standards that you wish to meet. I think that's going to be a coming issue in the water area which is, clearly you can filter everything that flows, but the question is are there less expensive ways to achieve the same desired result.
As far as the particular project you are talking about, 1 can tell you right now how the issue will break down. The issue will break down basically on a question if they spend $150 million, did they pay too much for what they got. That is one kind of an analysis that you do.
The other is whether or not the project or portions of the project could have been avoided. In other words, an imprudence analysis of whether or not had the company made certain other perfectly prudent moves at certain times, that perhaps they could have produced the same results for a fraction of the cost.
I don't know the answers to the questions. I don't know the detail to put on that general question. But that is the way you look at something like this. And I'll have to repeat what I said a year ago, it still remains a concern of mine. I think one of the serious problems that we have got is that you have got court cases that seem to suggest that the company gets to get the profits when they sell off their watershed land. That in fact the public, if the company basically sells some watershed land to a developer, many times the original cost they paid for it, those profits are not used to offset the rates for the ratepayers. I think that creates a very strong incentive. This should sound like a speech you've heard before. It creates a rather strong incentive to go the filtration route as opposed to the watershed route. And it seems to me, if a company is not in a position to necessarily read below the line profits, take it straight to the bottom line, there would be less financial incentive to go for higher cost ways of solving the water quality problem. I don't know if that alone would solve it. You have acid rain, you have a number of factors that un sheltered water will always present. In fact, in the giardiasis situation, that is what one of the problems was. L
But I think that something the Legislature
should consider, I testified to this event when yqu had
the special committee investigating the giardiasis situation
a few years ago, and I think I was asked the exact same
question last year at the budget hearing, and I said the
1 same thing then. 1 think we have to take a look at what
happens to the profits of the sale of undeveloped land.
BY REPRESENTATIVE GAWLEY: (To Mr. Barasch)
Q What I would like from your office is any
' recommendation that you may have in the way of proposed
legislation.
A I have a project underway right now, Representa-
' tive. I have several people on my staff studying the whole
question of what the best way is to address the future
> of water and quality water service in Pennsylvania. Now
1 I hope within the next couple months to have a package
of information I can share with you.
' REPRESENTATIVE CAWLEY: Just as a closing
1 statement to Mr. Barasch and the Commission. I believe i approximately 300,000 people were affected with the problem
of giardiasis in the northeast two years ago. From recent
surveys taken, at least 70 percent of those same people,
even though they are not reading in the paper to boil their
water and they are not reading in the paper there is a
boil advisory because of giardia in the water, 70 percent of those people are still purchasing their water to drink
-'f and to cook with and this is two years later. Now you , %;< figure just an average household, five gallons a week at *
59 cents a gallon, which is a low price, I'm sure you go
into any supermarkets around here you are probably going
to pay more for water. It comes out to over $150 a year.
This has been going on with thousands and thousands of homes up in the northeast. I think this should be taken
into consideration with the rate increase request from
the water companies in the future.
One last part, even with, I'm sure that the
people with the water companies are more aware of the
chemistry and makeup of their water systems than we are
in the Legislature. Even with those filter plants that
are proposed in the northeast, it is common man's knowledge
that the water coming out of those reservoirs will be
cleaner than the water that is coming out today. However,
the pipes from that reservoir to all of those 300,000 homes in the northeast, no one, including the water company really knows what the condition of them are. By the time
that the water travels from the reservoir to those homes, many of the homeowners are going to be receiving water that is not quality water and that is still going to create a problem.
You mention about saving money, it may be at least worthwhile looking into the possibility of filtering homes right where the water comes in instead of filtering at the reservoirs. Because I am sure that realistically they have no where near the money to take care of the vrater carrying supplies that are under the ground not only in the northeast but across the state. I think that we should have someone or should at least look into the possibility of filters at the side of the home, which again, it sounds very expensive but in the long run may be a lot cheaper than filters at the reservoirs. Thank you.
CHAIRMAN PIEVSKY: Representative Stuban.
REPRESENTATIVE STUBAN: Thank you, Mr. Chairman.
BY REPRESENTATIVE STUBAN: (To Mr. Barasch)
Q I would like to address a question I guess maybe the Consumer Advocate could answer. How many utilities in the state have excess generating power? Where are they located?
A You're going to get a different answer depending upon who you ask this question to. I can take it case by case. I think that Philadelphia Electric has tremendous excess generating capacity. PP&L does. I believe West
Penn Power does, and Duquesne and Penn Power are the ones that come to mind. Metropolitan Edison and PenElec I don't think have excess generating capacity.
Q The question I'm most likely leading up to, and I don't know if the Commission has set a rate, they most likely have come to an agreement. The purchase price for power from co-generation plants, what is that price?
COMMISSIONER SHANE: The contract prices are . in the five to seven cent kilowatt hour range.
BY REPRESENTATIVE STUBAN: (To Commissioner Shane)
Q That is over the entire state?
A That is a rough generalization of all contracts.
Some of the hydro stuff might be lower.
BY REPRESENTATIVE STUBAN: (To Mr. Barasch)
Q In the opinion of both the Commission and the
Consumer Advocate, what do you think co-generation is going to have on the rate schedule? Could we look forward to lower electrical rates in the future with co-generation?
A Well, I think it is early to say. I would answer the question this way. I think that in the long run, between co-generated power and small power production generation in general, that while there may be marginally higher ''energy costs now and maybe a couple years down the line, if that generation is instead of new base load power plants, there is no doubt in my mind it would be far cheaper to the public. The question you have to worry about is whether you are going to pay for both co-generated power and a new generation of unneeded generated capacity as well.
That is the dilemma. Q The thing that bothers me, and if you notice,
we have got new co-generation plants springing up in areas
like PP&L's area where there is surplus power. What
effect is that going to have on that rate? Can we look
for lower residential rates?
A Again, I think it is more of a question it
will be versus what plants might have been built some number
of years down the line. That is where the savings would
come. It is called the voided cost is what you call it.
And that is the whole theory behind Jimmy Carter's plan PERCO
to encourage small power production and hydro production
and co-generation. But again, the key question is whether
or not these projects will replace other centrally located
power generating stations that are now coming in at the
vicinity of $5,000 per installed kilowatt in today's dollar.
If that is what happens, certainly this is a good bet.
If you still end up building that next generation at the
same time frame you are going to build it anyway, it is
a lousy deal.
COMMISSIONER SHANE: I am just speaking for myself not my colleagues. I would like to see us nurture
co-generation as much,as rationally possible. To me it
doesn't make a helluva lot of sense to be able to buy
co-generation electricity at six or seven cents a kilowatt hour when with Limerick 2 being finished, we are going to be looking at electricity at 15 to 17 cents a kilowatt hour,
according to one of our staff guy's estimate and 13 to 15
cents a kilowatt hour according to the Governor's Energy
Council estimate.
But what 1 would like to see us also do is
1 something that is similar to what is being done now in the
natural gas industry, more of a free flow of electricity.
' Sure, we do interchange sales now through the PJM exchange.
' But I would like to see you guys pass legislation that i 1 says a co-generator in Duquesne or PECO's district can wheel that power paying the transmission rates to Duquesne
or PECO, can wheel that power into Met Ed and PenElec
district where they may be coming up against capacity
ceilings in the future. We had a little discussion on
this over in the Senate a couple of months ago and I would
like to see us all follow up on that in the year 1987.
1 can't speak for my colleagues but that is my opinion.
MRS. TALIAFERRO: I'm going to mainly address
the majority position of the Commission at this point on
co-generation. We are taking a relook at our current
regulations for co-generation that was supported, I believe,
unanimously to relook at it because there are certain
territories. PP&L, Met Ed, PenElec where co-generation has just taken off. There are other areas where it has
not taken off because of the prices involved. There are some arguments or ambiguity. There are some problems created by the cost of the alternative fuels. Oil and gas being lower today than it was when FERCO was written.
So for a variety of reasons, the nature of the co-generators are different in 1986, '87, '85 than they were anticipated in '79 and '78. For a variety of reasons we are taking a look at it again to try to get it streamlined or maybe leave them as is. We don't know. It is just now, with the benefit of hindsight and actual experience with the various contracts, we are seeing things differently.
My own personal view, in spite of what my > colleague here feels or the Consumer Advocate feels, I think there is another possibility that you can't overlook and that is what is occurring in California. They have been a pioneer in co-generation it is true, but they now have this rather unique and strange situation where they have no base load plants being built. They haven't been buiit for the last 15, 20 years now. They have more co- generation as a substitute. But in those contracts are interruptable clauses and all kinds of variations, and they are experiencing growth. So, you know, you have an unusual situation where you are asking co-generators, or they have an unusual situation where co-generators are actually, you know, if you look at the numbers, may be the base load providers. I don't think that is what co-generation was originally intended.
So I am saying there is another alternative out there as to xvhat the problem is with co-generation.
My personal position is that Pennsylvania should posture itself to learn from the errors of others and still protect the unique base of the industry mix and the industrial mix that we have in the state and attract new people in.
And you don't do that rushing off in fads and trying theories all the time.
REPRESENTATIVE STUBAN: I am not against co-generation.
I think the mix could work but I believe somebody has got to come out here with some controls and not let it get out of hand. I could agree with Commissioner Shane.
I believe co-generation maybe we ought to have some type of legislation or something here to send power to areas that don't have the surplus power. The problem we are having is just like PP&L sets up there with surplus generation. They are going to be buying up all that cheap power and it hasn't benefitted the citizens.
MRS. TALIAFERRO: Well, I am not suggesting we may not need legislation. I am just reflecting a view that many times, by the time legislation is in place, the whole situation is changed. And I believe Commissioner
Shane would agree with me that the issue of free accessibilitj goes more to the physical transmission and that is a very different issue than one simply being driven by co-generation.
The existence of, location of the ability to grow, the capital investment needed, the federal involvement involved in developing transmission lines is a very different issue that is bigger than just co-generation.
REPRESENTATIVE STUBAN: Well, if you look at it there are so many being built in the PP&L area. This morning I picked up the paper and there is another one they are thinking about burning tires and co-generating electricity. That is going to put another surplus right in that area.
MRS. TALIAFERRO: And I would add there was something that recently came into my office. There is a group that is concerned with the culm and the use and burning of the culm with co-generation, call themselves, they are involved with the clean air issues. So* I'm saying that there are a lot of problems there.
COMMISSIONER SHANE: All three commissioners agree that we are concerned about the quick buck artists we are seeing in the co-generation field. We would like to get those guys. The tax law itself has become, January
1st, is less of an incentive now to go into co-generation.
The investment tax credit is one of the things that is gone.
So that is one disincentive now for co-generation.
I, myself, am asking the question, I had it asked in this proceeding, why in heaven's name is anybody offering capacity credits for co-generation in Pennsylvania when we have got so much capacity over the state. It seems
to me we could really just concentrate on "avoided . energy costs period. Maybe simplify or rationalize our own regulations and this might be another disincentive for the quick buck artists.
So, yeah, we are concerned, but we want to nurture. But on the other hand I think the three of us are unanimous in our concern about the proliferation of it in certain areas where some dubious folks are getting involved who may be in and out. That's it.
REPRESENTATIVE STUBAN: Then you are monitoring it, not only you but the Consumer Advocate is keeping an eye on what is taking place.
COMMISSIONER SHANE: That is right.
REPRESENTATIVE STUBAN: Thank you, Mr. Chairman.
CHAIRMAN PIEVSKY: Representative Petrone.
REPRESENTATIVE PETRONE: Thank you, Mr. Chairman.
BY REPRESENTATIVE PETRONE: (To Mr. Barasch)
Q My question is directed to Mr. Barasch and concerns a problem that arose last year about which I received a tremendous amount of complaints. I don't know if you were involved in this. But briefly, Mr. Barasch, it concerned utilization of Bell Tel lines to call an obscene number in New York by youngsters and I got a lot
of flak in my district .about it. It was quite an
issue. There was, I noticed some ways to try to stop it,
to limit it, to correct it. Could you comment were you
involved, sir?
A I don't think it is past. .1 have gotten a
lot of inquiries also. I know that Representative DeWeese,
I believe, has some legislation in his committee; it is my memory. We have filed some technical comments to
Representative DeWeese. I think there is some legislation, whether it is the Justice Committee or whatever, on the
same issue. I am well aware of the problem. I am not
trying to dodge this. I don't recaU. exactly what was
in the legislation, but I know that Representative DeWeese was very interested. We had several communications back
and forth with him. We provided him with a lot of technical backup. There has been a lot of proceedings, Representative, before the FCC, the Federal Communications Commission,
about that and several of those cases have gone to the
appellate courts and back over how you can restrain free
speech and finding a way to restrain free speech — excuse me, and still allow for free speech and still protect
the rights of minors and parents to control the children.
It is a very complicated issue. We have done a lot of research on it and have provided that to Representative DeWeese. I would be happy to share it with you.
Q I appreciate that. I didn't know whether
for sure you were involved.
A Yes. We probably got a lot of the same calls.
Q It was a very critical problem and I think it is
something that has to be addressed and we have to find
solutions. I think it is shame that this kind of thing
can go on where minors are preyed upon. It is not a free
thing. They have to pay for it. I think there must be
some ways found to regulate this.
A I'm watching it carefully, Representative.
I will be happy to send you the information we sent to the
other Representative.
REPRESENTATIVE PETRONE: Thank you.
CHAIRMAN PIEVSKY: Mike Rosenstein, Executive
Director of Minority Staff.
MR. ROSENSTEIN: Thank you, Mr. Chairman.
BY MR. ROSENSTEIN: (To Mrs. Taliaferro)
Q First, Madam Chairman, Representative Flick had to leave and he wanted me to thank you and members of
the Commission for the support you have given him in recent months.
Having said that, let me ask a few questions
that I have. Am I correct in noting that your budgetary reserve is $799,000? A Yes.
Q If the current Secretary of Administration and
Budget Secretary sustain the view that the Public Utility
Commission is sufficiently staffed, will those dollars be refunded to the utilities from whence they came or are they available for this Committee to allocate next year as a carryover to reduce your appropriation, your appropriation request?
A I'm not so sure of that kind of detailed question. Mr. Gillert, what is the status there?
MR. GILLERT: That money is lapsed and it goes > into a general fund account where the subsequent year, it is deducted from the assessment. So we cannot use that money.
BY MR. ROSENSTEIN: (To Mr. Gillert)
Q So indeed those funds would lapse? They would hot be refunded but it would reduce your need for an additional appropriation?
A No, an additional assessment.
MRS. TALIAFERRO: An additional assessment, not appropriation.
BY MR. ROSENSTEIN: (To Mrs. Taliaferro)
Q The additional assessment. Thank you. My second question, since fiscal year '83, '84, including this year's 22 percent request for an increase in fixed assets, the Public Utility Commission has spent over one million dollars in purchasing computers and computer equipment. 2 Can we anticipate this trend will continue or has the computer purchases, will we anticipate the computer 4 purchases leveling off in the future?
A I believe there is going to be some leveling off.
6 But the whole plan for computer and mechanical equipment,
7 the enhanced equipment, was sort of started in that period Q and reflected a two or three-year long-term planning. We
9 are basically completing that process. We have some more
0 things to do with it, but it will drop off. 1 Now on the other side, I would tell you that 2 the increasing number of computers means the increasing
3 ability to run various types of analysis. So the depth
* of the word product is also increasing. People are now
5 able to ask more questions that they wouldn't have asked
5 without the computer.
T Q Then the answer to the question seems to be
J we may see a leveling off?
' A You will see a leveling off.
I MR. GILLERT: Can I call your attention to page
16 of the blue book, projections for five years.
: BY MR. ROSENSTEIN: (To Mrs. Taliaferro)
1 Q Except if I look at the previous five years'
projections, I don't see too terribly much difference. We
always see a leveling off. That is why I asked the Chairman
- to tell me 1 can anticipate seeing that.
A You will see a leveling off.
Q Madam Chairman, I did notice and just recently
received your automated technology annual report that you
submitted to the General Assembly. And you listed as
one of your milestones utility rate case staff management 1
system as an achievement that we can anticipate. Yet it I was my understanding that this had been in place for many
years. Are there some additional outputs that we can
anticipate from this additional system? •
MR. GILLERT: It is really a major change from
the system existing in the past. We are completely revising
the system. You are quoting from the, that is the
Commonwealth.
BY MR. ROSENSTEIN: (To Mr. Gillert)
Q Could you speak up.
A It is the Commonwealth plan.
Q That is correct. But that was your input.
It was your input that led to that.
A Yes.
Q What are the changes?
A We are completely revising the previous one.
Q Are there specific changes in this plan that we can anticipate?
A Yes, major changes. Q Can you tell us a little bit about it? i A I cannot at this time.
Q You cannot.
A 1 cannot.
Q Can someone at a later date provide this
information?
A I will provide the information.
MR. ROSENSTEIN: Thank you, sir.
' BY MR. ROSENSTEIN: (To Mrs. Taliaferro)
1 Q One final question, I noticed for real estate
rentals, your current real estate rentals total $130,000
1 and you have a budget request for $250,000, a significant
1 increase. There is no documentation I am able to find
1 explaining what this change in real estate rental costs is
1 all about. Could you perhaps --
1 A Well, some of it I can tell you is the increased
requirements with our numbers for the auditors. We need
1 space to place those people in. That I can tell you is
1 one part of it. I believe there is some changes in our i use of our state office systems. Again, it is Mr. Gillert's
responsibility to have that detail.
! MR. ROSENSTEIN: Thank you.
MR. GILLERT: I can provide you with specific
details, but essentially what the Chairman said is accurate.
MR. ROSENSTEIN: If you provide it to the Chairman, that would be terrific. Madam Chairman, thank you, and Mr. Chairman, thank you.
CHAIRMAN PIEVSKY: Representative Deal.
REPRESENTATIVE DEAL: Thank you, Mr. Chairman.
BY REPRESENTATIVE DEAL: (To Mrs. Taliaferro)
Q Madam Chairperson, what is the role of the
PUC relative to cab companies in Pennsylvania?
A Well, we have the licensing, the provision of the certificate to operate as well as the oversight of the rates, the establishment of the rates and then we have the enforcement process where we enforce the operational aspects of our regulations so that they are not in violation.
Safety, in certain instances the condition of the vehicle itself and the meters and how the meters ought to be utilized, the radio dispatch, the zone requirements under the change in the law, the attempt to provide the service uniformly throughout the cities that they operate in. We have some senior citizen regulations and joint programs there. We also oversee, you know, the requirement of insurance, driver's license, things like that.
Q Madam Chairperson, how many taxicabs are there in Pennsylvania?
A Representative Deal, I could not give you that kind of answer. But Mr. Nicely, who is head of the
Bureau of Safety and Compliance I believe -- MR. NICELY: I believe there are approximately
700 cab companies in Pennsylvania. Probably at least 400
of which are in the Philadelphia area.
REPRESENTATIVE DEAL: Thank you.
BY REPRESENTATIVE DEAL: (To Mrs. Taliferro)
Q Madam Chairperson, can you show me on what page and what is the budget to carry out this function
of your agency?
A Well, the description is listed first for the bureaus with oversight. On page 11, the Bureau of Safety and Compliance is listed and on page 8 is the Bureau of
Transportation.
Q Now, can you tell me how much, for the record, ., how much that budget is? \"
A On page 34 in the green book — no, it is not
34. I'm sorry, it is on page 32, look for the Bureau of
Safety and Compliance. The total is three columns up from
the bottom, 3,672,000 for the bureau itself. Now if you're looking for a further detailed breakdown for taxis, I couldn't give you that. That is not provided here.
Q Madam Chairperson, if that is provided anyplace,
I would hope you would forward that to the Chairman of this Committee. I guess what I am after is, I think the figures are off on the 700 taxis. But you all say that 700 '*-p
MR. NICELY: I am advised it is 855. 1 BY REPRESENTATIVE DEAL: (To Mrs. Taliaferro)
Q I thought it was off. I guess I'm trying to 3 find out how many people you have to enforce these rules
out of the 66 counties in Pennsylvania and I didn't see
an increase in staffing, but I guess you have enough to
6 enforce the rules and regulations. And I am raising these
questions because I am concerned about people who pay to
ride taxicabs and wonder whether or not these cabs are
9 being checked close enough so that people can feel
0 comfortable. I see some taxis going around with a red
1 fender and I saw one that the driver could not open the
2 left side of the door. He had to come out the other side
3 and talk to me.
4 I'm just wondering what are we doing in
5 enforcing, and of course I would hope that you would forward
6 to us some information in that regard.
7 A Representative Deal, I would be more than happy
8 to provide you with, I think what you are asking is a
8 breakdown of the number of enforcement officers per county.
0 We don't break them down that way because in the west as
1 well as in the central part of the state, the enforcement
2 officers have a huge area to cover. With respect to
3 Philadelphia, specifically, you may recall one of the
4 fundamental reasons why I believe I and this Commission
5 support no longer having the jurisdiction over the cabs regulation and the enforcement of the cabs is for the very reason the cost to the state versus the ability to effectively monitor to me is not worth the effort at the state level. I believe it can be best done at the city level. That was part of our questions last year, as I recall, but I would be more than happy to provide you with the breakdown of our safety and compliance enforcement officers.
But I also point out they are not just responsible for cabs. They have trucks, the truck inspection, they also have the hazardous waste disposal hauling inspection requirements. But that is one of the reasons why the whole issue of the best way to enforce and maintain and provide good taxi service in Philadelphia came up. It is because the Commission is being faced with and has been faced with the problem of trying to come close to the numbers it would take to do it and the cost to the state, through the assessment process, is just humongus and I don't think it is very effective.
Q Madam Chairperson, isn't that part of the
PUC's responsibility the same as enforcing any other?
A You are absolutely right, but we saw the opportunity during the sunset process which was a clear-cut invitation to look at what,, in the whole Public Utility
Code needed to be reformed, and reform to me meant adding as well as subtracting and it was taken up then and it was
part of the 28 recommendations of the Commission of our
own initiative that we were asking the General Assembly
and the Senate to look at. That has not changed. We
are doing an excellent job with what we have to do. But
if you want the best, then you might have to look at
revising the system.
Q I guess, Madam Chairperson, if you don't have
the truth, I guess I'm looking in the budget to see where
you asked for the truth. I heard something on the radio where somebody is holding hearings to try to get rid of
some of the responsibility.-
But I guess sitting on a committee like this,
I guess I would like to see, I guess I'm in the minority,
see a bureau come to us and say we have a job, you know.
We have X number of people. We need X number of people
to do it. I just think there is something wrong when you come and say, well, I just don't think — I have a problem with that. While people are still riding taxis that are unsafe all over this state. And yet you have a bureau that is saddled with the responsibility of doing something about it. Not after this recommendation as a consequence. I don't want to fight with you, but I guess when I see taxis the way they are here and I go to other states and see them clean and see pictures of the drivers, I have a problem that those kind of recommendations have not come to us.
You know, if we start saying we just don't have — we might
do away with all your responsibilities. I don't think
that ought to be the job of an agency.
A Well I just have to respectfully disagree,
Representative, because in the past the "Commissi'oh did come from our perspective, you can go to the well so many times.
The Legislature sets our direction and policy. They indicated that is not where the interest lies. We are responding to where the Legislature is telling us their policy initiatives lie.
My personal view, with respect to the bureau chief, was to make six requests of this gentleman is he sure about the numbers there. He would confirm that.
However, we are, at the same time, engaged in a hearing process where we feel that we are explaining the best way to do that. To provide effective taxis, and I can probably guess at the areas that you are going to when you visited are also ones that are not regulated by the Public Utility
Commission. I can almost guarantee that.
Q They are not regulated by the Public Utility
Commission?
A No.
Q Well 'what areas are?
A They have a separate transporation commission and they have a separate taxi commission.
Q Well can you tell me what area you regulate?
When I sit here on a committee, you know, I can —
A No, no. You misunderstood me. I said when you visited other states and drawing a comparison, I am
saying in those other states those taxis are not regulated by the public utility commission at the state level. That
is the very point I am making.
Q So what you are saying to us then, of course, you don't know how many people you have for enforcement?
You don't know that. You don't know where they are?
A No, no. Mr. Nicely can answer those questions,
the number of enforcement officers.
MR. NICELY: I have currently seven enforcement officers assigned to the Philadelphia area that have responsibility for cabs plus truck safety, plus bus safety and the seven officers spend approximately 40 to 50 percent of their time concentrating primarily on truck and bus safety be cause we got a mandate from Senator" Bel 1' s committee to actively participate in the Motor Carrier Safety Assistance Program, which we are also studying with PennDOT and the State Police.
So that cuts our time down, we have approximately
50 percent of our time with seven officers in a county the size of Philadelphia with approximately 1700 cabs operating
24 hours a day, seven days a week, you can well imagine that I don't have the personnel to do it.
I would suggest if I came and told you what I thought I needed, there would be no way under the sun that this Committee nor the Senate would allocate anywhere near the amount of money necessary to do what I believe to be an adequate job to enforce taxicabs just in the City of
Philadelphia. That is, quite frankly, the only area in which we have enforcement problems regarding taxicabs.
BY REPRESENTATIVE DEAL: (To Mr. Nicely)
Q I guess I'm having a problem understanding how we play around. When if you would come and ask for this > particular area, it makes me feel like there is no concern about the public who ride taxis and we see that they are unsafe. But I don't see the set, astronomical figures that you did put in to ask that you be able to do your job.
That is all I am saying. You know, I just think when you have a job, I would like to see your report. I would like to see your report and when you made a request for manpower to do the job which you are responsible to do. I am assuming you are responsible to do.
A My request for manpower, not only what I believe is necessary to do my job, what I believe that the Commission has set priorities in certain areas and they have given an indication to me where I might be able to increase my staff and where I might not be able to increase my staff. Inasmuch as the commissioners are ultimately responsible
for detailing the number of people that are in the budget or the'number ofnew positions, I have to tender my response
or my recommendations to them based on what they give me
as their priorities. And based on recent developments
that the Chairman has outlined, the Commission has decided
that the taxicab enforcement in particular, the taxicab
enforcement particularly in the Philadelphia area, would be better done by the city. From.all the responsibilities
the Legislature has given the Commission there is no way
the Commission can address those other responsibilities,
request personnel and budget to perform this other
responsibility plus give me the budget that might be necessary for me to do the job that you think might be necessary.
Granted, I think you are correct in your
assumption that there are a lot of cab problems in
Philadelphia and that there are unsafe vehicles on the
streets and people are riding them. That is true.
Q Can I see a copy of your report giving an accountability of your stewardship to the PUC. Somewhere along the line someone must have looked at the taxiing and must have looked at the problems we have and must have made some recommendations somewhere. Maybe I am asking for too much. But I somehow tend to believe, and I know you will find this insulting, but when I sit on a committee,
I am not out there doing enforcement. But I want to help
as a member of this great Committee. But I have nothing to go by. Is there a report you made one time saying, hey, I want to have seven people. By the time I get through I only have two. I really only have a chance to look at 1700 cabs or do you make that kind of recommendation or do you wait until somebody sends out a signal, don't bother with this because there are other things more
important. I am disturbed.
A I have discussed this at length with the
Commission, this Commission, the past Commission time and
time again. And we have sat down and discussed the matters through and through, and based on other priorities,
changing legislation, the desires of the Legislature, we are in the position of recommending, we still think
the enforcement of taxicabs relative to the City of
Philadelphia can be done much better at the local level.
Q Based on what? You know, there is some conversation back and forth, but we don't have anything.
Apparently, some of this will come to the Legislature.
What do you base this on? You mean you just look at it and say, hey, this is too big for us? We want to get rid of it.
A We have tried alternate ways. Q Tell me about them.
A In view of the situation, for instance, some of my senior staff and I visited the City of Pittsburgh where they seem to have less problems with drivers. One of the major programs they have in the City of Pittsburgh is that the city licenses cab drivers. We put together a package 'and had suggested this to the mayor in the
City of Philadelphia and I understand in recent hearings, which Senator Bell held last year, the city was going to explore that possibility. I think that in and of itself might improve the situation even if the PUC continued in its present state to enforce. But nothing has been done in that area. I think that might go to some extent.
Q I'm almost through. Can you share with this
Committee a report from your enforcement officers on
Yellow Cab? How long have you been in charge?
A I have been a Bureau Director since July 17 of 1981.
Q 1981, you wouldn't want to go back that far.
Could you go back for two years and give us a report on your findings of the taxicab operations in Philadelphia?
I am disturbed. I am disturbed that we are trying to encourage people to come to our city and they come to our city and get in cabs that they can't open the doors, they are filthy, they are dirty and I just want to know what have you done? One of our agencies that is responsible to carry out a function. I just want you to tell us what you have done and if you have not done your job, I want you to tell the Chairman what have you done to try to do your job?
A For the last two years, that would be no problem.
I can tell you what has been done.
Q And the number of citations your enforcement agencies have given out or complaints that you received and what you have done about them.
A We'll give you that information for the last two years.
MRS. TALIAFERRO: Mr. Chairman.
CHAIRMAN PIEVSKY: Did you want to say something?
MRS. TALIAFERRO: Yes. Representative Deal,
I was going to interject myself, and I believe properly so between you and my manager there, the Commission would be more than happy, through the Chair, to provide that kind of information in addition to which we can provide the information of the studies that were done when we were investigation the number of taxis that ought to be on the streets in Philadelphia and I believe, I can't think of the year for that legislation. It was Act 69 about 1980 or 1981 where we had the study done, an extensive study,on the number of cabs that ought to be on the streets. Then we had a restudy done more recently whether or not the Commission
ought to lift the cap on the number of certificates that we
ought to authorize to serve. In that Act 69 legislative
change, we had zones put in, mandating service,. logs to be kept by cab companies for their service in :those particular zoiei we were concerned about parts of the city not being served.
All the lines of cabs that you used to see outside the
Bellevue and the regular hotels that wouldn't go anyplace but between the hotel and the airport, that kind of thing and not providing the overall service.
I would be more than happy to provide the
information, Mr. Chairman, and then if there are any additional questions, Representative, be more than happy to sit down with you and go over the history of cab regulations in this case from the Public Utility records that we have.
BY REPRESENTATIVE DEAL: (To Mrs. Taliaferro)
Q I would also, if possible, Madam Chairperson, if I could see the guidelines that your enforcement officers are given. I would just like to know what do you check?
Do you check to see if a car has to have wheels and a taxi must be clean? I would like to know. I might be talking about things you never even thought about. I would just like to know what to expect when I see some of those traps rolling down the street. A Certainly. I have no problem with that.
Q You do have some guidelines?
A Yes. We can tell you our complaints, the number of complaints filed, the number of Commission actions resulting from those. I have no problem providing that.
Q Of course, we ask him to submit that to the
Chairman at some point where he made some recommendation regarding his responsibilities of his area.
A If I might interject there, Representative, it is not only Mr. Nicely but his predecessor also. He is in a line of people that have been involved in making
i those recommendations.
Q I guess I'm talking about, Madam Chairperson,
I guess we narrowed it down. I wanted to be fair. I thought two years would not have dealt with his predecessor since he told me he has been there since '81.
A Well, we have another bureau. The Commission has made some reorganizational changes. What I am trying to tell you is the Commission made some reorganizational changes. When it comes to issuing certificates to operate, another bureau is involved there. And also has access to the kind of complaints and problems of the taxicabs. That is our Bureau of Transportation. So it is more than just
Mr. Nicely is what I am saying.
Q Then what I heard on the radio coming in this morning about the hearings that are taking place and some body in your Commission is holding hearings. The press
could be wrong, but it sounds as if somebody in your
Commission is holding some hearings and then they are going to make some recommendations. That is what I heard on
the news. I'm trying to --
A I believe you are referring to Administrative
Law Judge Smollen is going to be making some recommendations to the Yellow Cab.
MR. NICELY: Relative to the need for additional cabs and explore the possibility whether the Commission should continue to regulate cabs. The Commission had a mandate to continue to monitor the need for additional cabs in Philadelphia. They thought that would be an opportune time to also explore the opinion of the city, the cab officials and other public officials regarding what their beliefs are in the need for service and what their beliefs are and whether the regulations of cabs should continue to be in the Public Utility Commission.or another body.
BY REPRESENTATIVE DEAL: (To Mrs. Taliaferro)
Q Where do you get that authority? Is that under the sunset that the Commission can look at an area and then decide whether or not they should not have that enforcement power? How does that work?
A I believe that issue, they are relooking at the number of cabs came up. It is part of the statutory
change, Act 69.
Q That is the number of cabs. What I am thinking
about though is the enforcement, the regulations. That
is the area I am concerned about.
A Well, that would come under our broad
investigatory powers. Now whether or not we could actually
implement it when we don't have a law that tells us what
we could is a different issue. We would have to, most
of the time, coming from that type of study, we would
then come back to the General Assembly and ask for
legislation that would accomplish what the results of
our study show.
Q But you have somewhere that shows that you
have the power? You don't have to go to the Consumer
Affairs Committee. You don't have to do anything. You
can just direct somebody to go out and see whether or not
you should recommend not regulating taxicabs or anything
else.
A Well, we have broad investigatory powers to
study anything that is under our mandate.
REPRESENTATIVE DEAL: Thank you, Mr. Chairman.
CHAIRMAN PIEVSKY: Representative Lloyd, do you desire to interrogate the Commission or the Consumer
Advocate? REPRESENTATIVE LLOYD: Mr. Chairman, I had a number of concerns. Since I expressed them to you, I have had an opportunity to have two extensive meetings with representatives of the Commission. They have presented me with a package of material this morning and with my analysis of that, I don't have any questions.
CHAIRMAN PIEVSKY: Thank you, Representative
Lloyd. In closing, I just want to say that I am appalled that the prior administration did not authorize the hiring of additional staff necessary to do the job that we, as a Legislature, mandated, additional staff that we provided funding for in your current budget.
\"T& As noted here numerous times today, we are dealing' with millions of dollars and potential cost or savings to consumers for a cost of less than $500,000, the prior administration has left the ratepayers of this
Commonwealth horribly exposed. C I would like to thank the Commission, the
Consumer Advocate and their staff. The Appropriations
Committee thanks you for your testimony.
MRS. TALIAFERRO: Thank you.
CHAIRMAN PIEVSKY: The hearing is adjourned.
(Whereupon at 4:35 p.m. the hearing was
adj ourned.) I hereby certify that the proceedings and evidence
taken by me in the within matter are fully and accurately
indicated in my notes and that this is a true and correct transcript of the same.
Dorothy M. Walone Registered Professional Reporter 135 S. Landis Street Hummelstown, Pennsylvania 17036