July 17, 2006 – Debate during a Rules Committee meeting Monday evening became heated after senators asked nominees to the Public Services Commission how they would determine rate increases for utilities. Questions from Sen. Louis P. Hill also focused on how to reduce the cost of energy throughout the territory, and whether or not Innovative Telephone should have its Economic Development Commission benefits revoked.
"The last time Innovative sought a rate increase, they were asked whether they would also be seeking EDC benefits," Hill said. "The response was no then, as soon as the company got the increase, it turned right around and sought the benefits, which were approved by the PSC board and recently by the governor. If you are confirmed, are you prepared to revoke the increase based on the understanding of that situation?"
In response, two out of three of the nominees said they did not believe the PSC had the legal authority to backtrack on the EDC contract. However, M. Thomas Jackson, a PSC nominee out of St. Croix, said since "Innovative had pulled a fast one," its EDC benefits certificate should be "looked at."
Former Sen. Donald Cole, another PSC nominee, added that a utility first has to show it deserves a rate increase before one is granted. "Maybe at that time, the board members saw that they needed a rate increase," he said.
On a similar vein, PSC nominees discussed the criteria necessary for granting a rate increase, and agreed that a utility would have to justify why a hike is needed, along with plans to improve the quality of service to the Virgin Islands.
However, nominees also said that they would grant an increase if a utility needed to recoup costs incurred because of skyrocketing fuel prices. "The PSC is an entity that has to strike a very delicate balance," Cole said. "WAPA, for example, has to maintain its services, which are tied to the price of fuel. And, since the price of fuel is going to continue to increase, once of the things we have to do is help to alleviate the large sums of money consumers pay every month."
To address this issue, Cole, along with Jackson, suggested WAPA look at acquiring alternative energy sources – including burning coal and petroleum coke, a by-product of the oil refining process – and engaging private companies to build new power producing plants.
Switching gears, nominees also discussed changes that need to be made to the PSC – including making the commission a full-time entity. "Right now the PSC meets on a part-time basis," Cole said. "And it should be raised to a cabinet level position, where the commissioners serve full time. Because, as it currently is, we go in, we sit down and we don't have a lot of time to make decisions.
"Considering all the things we have to read and go through, it's important that we be informed about the issues and have enough time to make the decisions."
While some senators did not agree with making the commission a "cabinet-level" entity, others were curious as to how much commissioners should be paid if they were brought on full time. While nominees said they could not determine an exact figure, they agreed that any full-time salaries should be commensurate with an individual's qualifications and education.
Current PSC Chairwoman Alecia Wells said that only four out of the seven PSC commissioners should be full time, since many members have established jobs and businesses.
Wells was invited to testify during Monday's meeting by Sen. Ronald E. Russell, chairman of the Rules Committee, who said that the PSC's current lack of quorum is "shocking" and has resulted in the automatic increase of the levelized energy adjustment clause (LEAC).
Wells said the nominees, if confirmed by the full Senate body, would ensure that the PSC had a quorum on a more consistent basis. By law, the commission has seven sitting members. Only four are required for a vote, however.
Wells also said that while it is often difficult for the commission to pull together a quorum with its current four-member board, special sessions are held to consider "critical and more immediate matters."
"We have delayed some final decisions, but it has not affected the availability and affordability of public services to the people of the Virgin Islands," she said. "And I find that there is no reason to believe that anyone has been harmed by it."
The nominations of Cole and Jackson, along with PSC nominee Sirri Hamad, were unanimously approved by senators at the end of Monday's meeting, and forwarded to the full Senate body for a final vote.
Senators also approved the nominations of Wesley S. Williams Jr. to the Board of Trustees of the University of the Virgin Islands; and Marangeli Cruz-Hendricks to the V.I. Board of Social Work Licensure.
The nomination of John George as director of the Bureau of Information Technology was also unanimously approved. During the meeting, George said that if confirmed by the Senate, he would focus on connecting all government departments and agencies through a broadband network, an informational database and the new Enterprise Resource Planning System (which would replace the government's current financial management system), scheduled to come online in October.
"All the data that the government has should be in one central location," George said. "And it should be virtual, since we live in a hurricane-prone area. Additionally, the implementation of a broadband network would greatly accommodate the volume of information that has to be delivered every day throughout the territory."
Present during Monday's meeting were Sens. Pedro "Pete" Encarnacion, Juan Figueroa-Serville, Hill, Terrence Nelson and Ronald E. Russell, along with noncommittee members Sens. Craig W. Barshinger and Neville James.
Sens. Lorraine L. Berry and Roosevelt C. David were absent.
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