July 22, 2002 – The chair of the Public Service Commission says he wants to put an end to the practice by regulated companies of turning in last-minute requests and asking the commission to render hasty decisions.
Desmond Maynard scolded executives of the Water and Power Authority for rushing such requests to Friday's PSC meeting.
At the session, WAPA was scheduled to get a response on its earlier request for a new hearing examiner to conduct a mandatory investigation of its rates; to learn the PSC's answer to its request for an extension on the monthly fuel-cost surcharge called LEAC — for "levelized energy adjustment clause" — set to expire next month; and to receive a report on payments the utility had made to the PSC for assessments ordered in previous regulatory actions.
But in addition to addressing that agenda, WAPA executives brought new requests to extend temporary surcharges for asbestos abatement and for mitigation and recovery projects done as a result of 1995's Hurricane Marilyn. Both surcharges are to expire on Aug. 2.
Maynard asked why WAPA waited until two weeks before the cutoff date to ask for an extension. He complained that such last-minute requests keep the PSC from making a thorough study of situations before taking action and warned the utility's acting executive director, Glenn Rothgeb, that future late submissions may result in financial penalties imposed by the PSC. "You take it for granted that we will have to take action because the dates are coming up," he said. "You have got to stop doing that."
With regard to the LEAC extension request, the commission agreed to extend the surcharge for 60 days but at a reduced rate. The amount, which by law is to be adjusted periodically, is tied to WAPA's fuel cost. Authority officials said current world oil market conditions are such that they could get along without the surcharge for the time being.
In the two-month period, The PSC's acting legal counsel, Garry Morse, said later, the commission's consultants want to go over the utility's figures to see if the rates passed along to customers have been fair.
On the matter of the WAPA rate investigation, the commission agreed to replace attorney Ronald Russell as hearing examiner. Russell had been appointed by the PSC months ago to oversee the investigation, but WAPA officials had objected on the grounds that Russell had a lawsuit pending against the authority. Russell said last month that he wanted to step down, in part because of the authority's objections and in part because he was planning to run for the Senate, and on July 1 Maynard said he had agreed to the request. No replacement was named Friday.
Legislation calling for every-other-year rate investigations of all of the industries regulated by the PSC became law last year. The probes are intended to give the PSC a basis for making decisions on rates based on allowable company earnings. Findings could support lower rates, higher rates or no change in rates. To date, only the phone company investigation has gone forward, and officials have said it is expected to be completed by Sept. 30, the end of the fiscal year.
Concerning the new requests WAPA brought to the table on Friday, Robert J. Vodzack, the authority's chief financial officer, apologized to commissioners, saying he was to blame in this instance. Rothgeb said he had mentioned the need to roll the temporary surcharges into the utility's permanent rate structure two years ago and again last year, but later admitted this had not gone to the PSC as a formal request.
The panel's first response to the request was to reject it outright. It was urged to do so by attorney Amelia Joseph, representing Sen. Alicia "Chucky" Hansen, who asked the commission to penalize WAPA "and make them respect the PSC."
But Rothgeb said revenues received through the temporary surcharges are tied to the utility's bond holdings, and allowing the revenue stream to dry up would throw WAPA into default. The result would be that "the bondholders will own WAPA," he said.
Given this scenario, the commission agreed to hear the requests. Its decision was divided: The panel voted to extend the Hurricane Marilyn surcharge until Sept. 30 and to address it again at the September PSC meeting, but not to extend the scheduled expiration of the asbestos surcharge. A date for the September meeting has not yet been set, Maynard said.
Sen. Adelbert Bryan asked the commission members if they knew how much money WAPA had collected through the asbestos surcharge. He said he had attempted without success to obtain that information during hearings in the Senate.
PSC members asked Rothgeb how near to completion the abatement project was. He said the work was largely done but is yet to begin at St. Croix's Unit 11. That unit should be shut down in the next several weeks to allow abatement crews to remove the hazardous asbestos material, he said.
Maynard said he first learned of the remaining abatement work to be done at a PSC meeting about three months ago and felt the utility had had ample time to take care of the problem, as well as ample funds collected from the surcharge to pay for it.
The commission also put off responding to a WAPA request to impose a new surcharge to pay for the territory's street lighting. Responsibility for the street lights was turned over to the authority from the Public Works Department late last year, but funding appropriated by the Legislature has not been forthcoming from the administration. After the meeting, Morse, representing attorney Frederick Watts, who was off island, said Public Works had set aside funds to help WAPA pay for the lights, but those funds expire Aug. 1.
The commission decided to postpone dealing with the matter until an unspecified future meeting. It also delayed acting on a request by the Virgin Islands Source newspapers to see financial records filed with the PSC by Innovative Telephone in the agency's mandatory rate investigation of the phone company. The PSC had said at its June meeting that it would respond at the July session but said on Friday that it was again postponing a hearing on the request, because attorneys representing Innovative were not present.
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