Indicates Matter Stricken
Indicates New Matter
The House assembled at 10:00 A.M.
Deliberations were opened with prayer by the Chaplain of the House of Representatives, the Rev. Dr. Alton C. Clark as follows:
O God our Father, we thank You for the gift of another day with its opportunities to serve within the hallowed Hall of our State Capitol, to serve both You and our fellowbeings. Grant that we might be to the highest good for our beloved State. When the hours seem long, work wearisome, problems perplexing, and decisions difficult, sustain us by Your presence and strengthen us with Your might. May we never trust an unknown future instead of an all knowing God.
Cause us to hear and to heed the assurance of our Heavenly Father: "I am the Lord, your God; fear not, for I am with You."
(Isaiah 43:3,5) Amen.
Pursuant to Rule 6.3, the House of Representatives was led in the Pledge of Allegiance to the Flag of the United States of America by the SPEAKER.
After corrections to the Journal of the proceedings of yesterday, the SPEAKER ordered it confirmed.
TO: The Clerk of the Senate
The Clerk of the House
FROM: Committee to Review Candidates for the
South Carolina Public Service Commission
DATE: February 22, 1994
In compliance with the provisions of Act No. 119, 1975 S.C. Acts 122, it is respectfully requested that the following information be printed in the Journals of the Senate and the House.
Donald H. Holland, Chairman
Pursuant to Act No. 181 of 1993, the Committee to Review Candidates for the South Carolina Public Service Commission (hereinafter "Committee") was organized to consider the qualifications of candidates for the six resident and one at-large commissioners of the South Carolina Public Service Commission (hereinafter "Commission"). The Committee's deliberations marked the first time that a joint public-legislative committee has considered the qualifications of candidates for the Commission. The General Assembly, in furtherance of addressing the concerns noted by the Joint Legislative Screening Committee in its report of 1993, chose to combine the public member process of the Merit Selection Panel with the legislative screening process. We find the combined process to be efficient and hope that our input on the qualifications of the candidates demonstrates the Committee's total commitment to finding "the best qualified people giving due consideration to their ability and integrity." 1
1 See S.C. Code of Laws § 58-3-26 (1993).
The Committee is unique among screening committees in that its membership includes public members and has a broad ambit of statutory authority to determine not only the legal qualifications of the candidates, but to also determine their suitability for public service. The Committee has determined that while its statutory mission does not include selecting the best person for service on the Commission, it does bear responsibility to supply the General Assembly with a detailed analysis of each candidate's capabilities, giving special attention to any issue or concern which might limit a commissioner's effectiveness.
The determination of legal qualifications is limited to a determination of the candidate's residence in the appropriate Public Service Commission district as established by Section 58-3-20 of the S.C. Code of Laws, the candidate's eligibility for election as determined by Section 58-3-24 of the S.C. Code of Laws, and the candidate's compliance with Constitutional provisions limiting election to those persons eligible to be electors of this state.
To fulfill its mandate that it determine fitness beyond mere legal qualifications, the Committee has sought to do an intensive review of each candidate's experience, temperament, sensitivity to legal and ethical constraints on public service, relative understanding of public policy issues, knowledge of Commission operations commensurate with the candidate's access to information, and commitment to a balance in the interests of consumers and industry in setting rates, granting permits, etc.
As the Committee's first report, some explanation of these various benchmarks which it used to adjudge the qualifications of candidates is appropriate.
By statutory mandate, this Committee is charged with considering the knowledge and experience of potential commissioners "in such varied fields as business, government, accounting, law, engineering, statistics, consumer affairs, and finance." 2 The Committee looks for persons who have excelled in these fields and those persons' capability to transfer this success and knowledge to the operations of the Commission.
2 See S.C. Code § 58-3-26 (1993). The Committee also considers previous service on the Commission as valuable experience.
The Commission is neither a court, an executive agency, nor a legislative body, but a blend of all three. The Committee seeks to determine if a candidate's sense of the role or roles he is to fill on the Commission is such that his work will be productive, proactive, and protective of the interests of all South Carolinians.
Every candidate for the Commission carries a wealth of life experiences and business and personal relationships when seeking election to the Commission. The Committee realizes that there is little possibility of ever selecting candidates with no pre-existing conflicts of interest. To do so would, in effect, be asking candidates to have totally disassociated themselves from the "real world" and a direct repudiation of this Committee's statutory mandate to find candidates with experience in business, law, etc. However, the Committee finds it to be an important standard that a candidate recognizes when he may have a conflict of interest between his existing responsibilities and/or business interests and his future duties as a Public Service commissioner. The Committee strongly feels that a candidate should not only readily recognize such conflicts of interest, but should pro-actively and willingly offer to divest or divorce himself from such conflicts of interest. The Committee believes that the reluctance of a candidate to readily recognize or willingly divest or divorce himself of such interests during the intense public scrutiny of these screening hearings is a likely indicator of that candidate's future unwillingness to avoid conflicts of interest when called upon to do so in a less public forum--Public Service deliberations.
Candidates should have empathy for the concerns and needs of all South Carolinians, not just those South Carolinians who have interests similar to those of the candidate. A candidate should understand and appreciate the broad spectrum of thought on such important issues as universal availability of public services, protection of the environment, and the affordability of basic utility services. The Committee sought to measure each candidate's intuitive ability to grasp public policy concerns. The Committee realizes that while the consumer advocate often represents the views of the mythical "average South Carolina consumer," responsibility for ensuring that the great diversity of the needs of South Carolinians ultimately rests with a responsible, empathetic Commission. Moreover, the Commission must ensure through the grant of fair rates of return to the state's public utilities that there is a ready and available source of water, power, and communications available to all South Carolinians. The grant of monopoly status is, in fact, a recognition of an extraordinary public need which can only be met through the grant of monopoly status and the oversight of a strong, visionary regulatory board. To this end, the Commission looks for candidates who can not only recognize the need for a balanced hand in determining fair rates of return, but who can also discern the necessary distinction between unregulated and regulated segments of the utility industry.
The Committee uses a sliding scale in judging the qualifications of each candidate in this area. It would be patently unfair to require challengers to have accumulated a wealth of knowledge about Commission operations, specifically, or regulated utilities, generally. Unlike incumbent commissioners, challengers have not had the benefit of a compensated opportunity to educate themselves in hearings or through conversations with staff. However, every candidate, either incumbent or challenger, must be required to demonstrate some basic understanding of the role of the Commission and adequately display thoughtful reflection on issues likely to come before the Commission. Candidates should also be generally aware of the time commitment necessary for productive service as a commissioner. Each candidate must provide adequate assurance to this Committee of his commitment to meet the demands of the office. From incumbent commissioners and others who have benefited from intimate involvement with the Commission's affairs, this Committee looks for a thorough knowledge of Commission operations, an informed opinion as to matters of important public policy pending before the Commission, and demonstrated leadership on these matters of public policy. The Committee does not seek to prompt commissioners to certain decisions on individual issues through its questioning or the questioning of its counsel, but seeks to determine each candidate's capabilities to explore the demands of public policy balanced against the mathematics of the financial requirements of the state's public utilities. As previously noted, the Committee expects and, therefore, justifiably demands that incumbents and others with substantial experience before the Commission be able to discuss these matters with a greater fluency than those persons who have to date committed themselves to other employment.
While candidates must show a marked commitment to ensuring that South Carolina's consumers are protected, they should also demonstrate an understanding of the simple business principle that only profitable business enterprises can survive to provide important public services. As aforementioned, the Committee places great emphasis on the ability of candidates to distinguish between the regulated and unregulated business activities of the state's public utilities. It is important that regulated activities not serve to subsidize unregulated activities and that consumers of South Carolina can depend upon the Commission to serve as a watch dog over utility holding companies having unregulated subsidiaries.
A transcript of the Committee's extensive examination of the thirty-six candidates on January 20, 21, and 24, 1994, is appended to this report as required by law. 3
3 Mr. George V. Atkison has applied for election to both the Fifth District and At-Large seats on the Public Service Commission. The Committee determined that there was no legal prohibition to Mr. Atkison seeking both seats. Subsequent to his screening, yet prior to the release of this report, Mr. James L. Felder withdrew his candidacy for the Second District seat. At the time of the release of this report, there were 34 candidates (including Mr. Atkison, who seeks the two aforementioned seats).
In consideration of these findings of fact, the Committee finds all candidates to be legally qualified for service as Public Service commissioners. The Committee makes the following findings of fitness and general qualifications for candidates for the Commission:
FIRST DISTRICT
Anne M. Bowen
The Committee finds Ms. Bowen to be an outstanding candidate for the Commission. Ms. Bowen's service as vice chairman of the Sea Pines Public Service District and her employment as a certified financial planner give her excellent experience that would be analogous to work on the Commission. The Committee also finds that she has an even temperament and an understanding of the legal and ethical constraints on public service. Ms. Bowen's experience lends her a thorough knowledge of the applicable public policy issues and the need to balance the interests of consumers and industry in rate making and other functions of the Commission. Ms. Bowen also has a good knowledge of the workings of the Commission, commensurate to someone with her level of access to information.
FINDING: Qualified
Mignon Letitia Clyburn
The Committee finds Ms. Clyburn's temperament and understanding of the legal and ethical issues involved in public service to be good. She also understands the need to balance the interests of consumers and industry. However, the Committee finds that Ms. Clyburn demonstrated a somewhat limited knowledge of Commission functions and operations commensurate to others with her level of access to information.
FINDING: Qualified
Eugene Novgorodoff
Mr. Novgorodoff has outstanding experience with a variety of diversified utilities. His work experience and involvement over the years lends him extensive knowledge of utilities, particularly with respect to design and engineering issues, and somewhat with respect to the components of rate base. Mr. Novgorodoff is especially well-prepared to face the coming technological revolution. The Committee also finds that he seems to have a good approach to ethical considerations and the need to fairly balance the interests of consumers and the industry.
FINDING: Qualified
Furman M. Reynolds, III
Mr. Reynolds is currently employed as the Director of Public Service for the town of Mount Pleasant. This position has enabled him to gain valuable experience. However, in his testimony before the Committee, Mr. Reynolds indicated that he intends to remain in his position as Director of Public Service for the town of Mount Pleasant even if elected to the Commission. The Committee is concerned that Mr. Reynolds fails to recognize the potential ethical and time conflicts involved in dual service for the town of Mount Pleasant and on the Commission. Mr. Reynolds may not be sensitive to certain ethical constraints on public service. Furthermore, Mr. Reynolds was not familiar with some of the issues important to service on the Commission and did not demonstrate a strong understanding of the functions and operations of the Commission commensurate with others with his level of access to information.
FINDING: Not Qualified
William Saunders
The Committee finds that Mr. Saunders has good experience and a firm grasp on the legal and public policy aspects of service on the Commission commensurate with others of his level of access to information. The Committee is concerned about a letter Mr. Saunders sent to all members of the General Assembly. In his letter, he made a "formal request to solicit... support" for his candidacy. Mr. Saunders testified that he was not aware of the ethics law at the time he sent the letter, but that he believes he did not violate the law because he was soliciting "support" instead of "votes."
FINDING: Qualified
Charles E. Schuster
Mr. Schuster demonstrated a good understanding of the functions and operations of the Commission in his testimony before the Committee. He was also familiar with some of the more important policy and technological issues that are, or will be, before the Commission. Mr. Schuster also demonstrated an even temperament and was sensitive to the legal and ethical constraints on public service. The Committee is aware of Mr. Schuster's wife's employment as a designer of electrical substations for Santee Cooper and finds no appearance of impropriety in her continued fulfillment of the job responsibilities outlined in Mr. Schuster's testimony.
FINDING: Qualified
Hubert Tyler
The Committee finds that Mr. Tyler has experience that would be helpful in service on the Commission. He has also been a public servant for many years and is sensitive to the legal and ethical constraints on public service. Mr. Tyler demonstrated knowledge of the policy and technological issues that are now, or will be, before the Commission and an understanding of the functions and procedures of the Commission commensurate to someone with his level of access to information. Mr. Tyler's background in the sciences and mathematics could serve him well as a Commissioner.
FINDING: Qualified
Flemister Lamarr Wiley
The Committee finds that Mr. Wiley is sensitive to the legal and ethical constraints on public service and the need to balance the interests of consumers and industry. Mr. Wiley demonstrated a somewhat limited knowledge of Commission operations commensurate to someone with his level of access to information. Mr. Wiley did not, however, demonstrate an understanding of some of the important policy and technological issues that are now, or will be, before the Commission.
FINDING: Qualified
Richard Ganaway
The Committee recognizes Mr. Ganaway's experience in managerial work and his emphasis on providing quality service to consumers on a least-cost basis. Mr. Ganaway demonstrated an understanding of Commission operations commensurate to someone with his level of access to information. He also appears to recognize the ethical constraints on public service.
FINDING: Qualified
SECOND DISTRICT
Robert Buford Dibble, Sr.
Mr. Dibble has been a public servant for many years and has an admirable desire to serve his state. He understands, and has experience with, the legal and ethical constraints on public service. Mr. Dibble also recognizes the issues involved in fairly balancing the interests of consumers and industry. The Committee finds, however, that Mr. Dibble has a limited understanding of the functions and operations of the Commission commensurate to others with his level of access to information. He is anxious to learn, but does not possess a current understanding of some of the more important matters before the Commission.
FINDING: Qualified
Carl F. McIntosh
The Committee finds Mr. McIntosh to be an outstanding candidate for the Commission. He has excellent experience and a thorough knowledge of the functions and operations of the Commission. He also has an even temperament and is sensitive to the legal and ethical constraints on public service. In his testimony before the Committee, he demonstrated a thorough understanding of the applicable public policy issues and of the issues involved in balancing the interests of consumers and the industry.
FINDING: Qualified
C. Robert Moseley
Mr. Moseley has business experience that could serve him well as a commissioner. He also has an even temperament and experience working with the public. Mr. Moseley demonstrated a fairly general knowledge of Commission functions and operations commensurate to others with his level of access to information. He also appears to have a fairly general understanding of some of the more important policy and technological issues that are, or will be, before the Commission.
FINDING: Qualified
Margaret B. Reese
Ms. Reese has excellent experience as a school teacher, and an commendable desire to serve. Ms. Reese also has an even temperament and is sensitive to the constraints on public service. However, Ms. Reese demonstrated a limited understanding of Commission functions or operations and some of the more basic aspects of utility regulation.
FINDING: Qualified
Charles Dukes Scott
The Committee finds Mr. Scott to be an outstanding candidate for the Commission. He is currently serving on the Commission staff as Deputy Executive Director. Mr. Scott has excellent experience and is extremely knowledgeable. Mr. Scott also has an even temperament, and is familiar with, and sensitive to, the constraints on public service. He thoroughly understands the functions and operations of the Commission and the issues involved in balancing the competing interests of consumers and industry.
FINDING: Qualified
THIRD DISTRICT
Guy Butler
Guy Butler has served as a member of the Commission for thirty-one years. During his tenure, he has served on multiple occasions as Chairman or Vice-chairman. During his interview, Mr. Butler indicated a sensitivity to the various demands placed on commissioners, noted his respect for the role of the Consumer Advocate, and offered insight as how to improve the deliberations of the Commission. The Committee was also impressed with Mr. Butler's studious preparation for these hearings and his balanced approach to the interests of the consumer and the utility industry.
FINDING: Qualified
Mary H. Derrick
Mrs. Derrick, a real estate broker residing in Johnston, expressed her desire to serve on the Commission as wanting "to make a contribution on the state where I live." Mrs. Derrick's previous public service as well as her commitment to make the Commission her full-time job impressed the Committee. Mrs. Derrick forthrightly dealt with the Committee's inquiries regarding conflicts of interest and the balancing of consumer and industry interests. However, the Committee does note its reservations as to Mrs. Derrick's general qualifications in that her interest in public service in public office appears to be a general one insofar as she was unable to identify any issues she would like to address in serving on the Commission. The Committee well realizes that challengers are not in the same position as incumbents to intimately familiarize themselves with Commission operations and emerging issues, but is concerned if a candidate has not considered the role of a commissioner on at least a minimal level.
FINDING: Qualified
Lewis E. Jordan
Mr. Jordan impressed the Committee with his distinguished military career and his desire to serve the people of South Carolina. His commitment to serve as a full-time commissioner is also viewed positively. Mr. Jordan displayed a working knowledge of the general responsibilities of the Commission and a determination that the Commission pro-actively consider the ramifications of deregulation and the radical changes coming in information technology. Mr. Jordan's graduate education and recent private business experience strongly argue that he would be a successful and productive member of the Commission.
FINDING: Qualified
John T. Nave
Mr. Nave has served as Mayor of the City of Greenwood for the past twelve years. Mr. Nave clearly demonstrated a working knowledge of the general responsibilities of the Commission, expressed his commitment to fairly balancing industry and consumer interests, and spoke convincingly of his desire to ensure fair hiring practices. Nave's understanding of the ethical restraints on his service also meets the Committee's expectations.
FINDING: Qualified
FOURTH DISTRICT
Philip Tibbs Bradley
Mr. Bradley demonstrated a knowledge and heightened level of awareness as to many issues likely to be addressed by the Commission. The Committee views Mr. Bradley's business experience as an asset as well. During the course of his screening, Mr. Bradley noted the need of the Commission to have ongoing communication with the legislative and executive branches of government so as to ensure a finely woven fabric of utility regulation. The Committee concurs in this goal and feels that the candidate's previous legislative service could aid this effort. Mr. Bradley's commitment to full-time service and his quick grasp of ethical concerns also argues for his being qualified for election to the Commission.
FINDING: Qualified
Robert G. Rowell
Mr. Rowell has served on the Commission for less than one year and forthrightly noted that it had been a learning process. He demonstrated a firm grasp of Commission operations, issues likely to be confronted by the Commission, and ethical constraints on public service. Mr. Rowell also expressed his continued commitment to thoughtful participation in the Commission's deliberations on a full-time basis.
FINDING: Qualified
Frank B. Stone
The Committee finds Mr. Stone to have basic business experience which may aid the Commission in its deliberations. While Mr. Stone's knowledge of Commission operations and awareness as to pending issues is somewhat limited, the Committee noted with approval Mr. Stone's well-reasoned responses to its inquiries regarding industry rates of return and consumer expectations of affordable utility products and services.
FINDING: Qualified
FIFTH DISTRICT
George V. Atkison
Mr. Atkison offers substantial, high-level corporate experience drawn from nearly half a century as a business manager and product director with several Fortune 500 companies. Mr. Atkison, now retired, would serve full time on the Commission and noted that he would set an agenda of encouraging "stability." Mr. Atkison noted a partial loss of hearing that might affect his service on the Commission. The Committee finds Mr. Atkison's overall knowledge of Commission operations and pending issues to be of a general nature, but found his grasp of the economics of the marketplace to be more advanced.
FINDING: Qualified
Cecil A. Bowers
Mr. Bowers has served on the Commission for twelve years. The Committee finds Mr. Bowers to have a strong commitment to serve the public interests and a general grasp of the many public policy issues likely to confront the Commission in the future. Mr. Bowers' failure to grasp certain details of Commission decisions must be balanced against his general testimony indicating a strong desire to properly allocate costs and to balance the interests of industry and consumer. Mr. Bowers' expression of a strong commitment to progressive employment practices at the Commission met with Committee approval.
FINDING: Qualified
Mary Gail Douglas
The Committee finds Mrs. Douglas to be a very civic-minded advocate for the rights of many South Carolinians, such as the elderly, who may find difficulty in voicing their own concerns. The Committee finds Mrs. Douglas' advocacy to be well-tempered and her overall approach to rate-setting, permitting, etc. to be one where the "economic issue would . . . be first and foremost." Mrs. Douglas has substantial budgeting, accounting, and personnel experience, and through her testimony, provided evidence of a hands-on, well-reasoned approach to ensuring fair hiring practices. The Committee finds Mrs. Douglas' knowledge of Commission operations and utility issues to be commensurate with her prior access to information.
FINDING: Qualified
Richard A. Hall
Mr. Hall's previous experience as an employee of a utility company and as a director of a local natural gas authority provides him with a base of experiences on which to draw should he be elected to the Commission. He demonstrated a working knowledge of Commission operations and of many issues likely to confront the Commission. The Committee expressed its concern over a family member's ownership of a local telephone company's stock, but was assured by Mr. Hall that he would divest himself of this stock if elected.
FINDING: Qualified
SIXTH DISTRICT
Warren D. Arthur, IV
The Committee is impressed by the diligence and seriousness with which Mr. Arthur has performed his past duties as a Commissioner. The Committee found Mr. Arthur to have a solid understanding of both technical and industry trends and appreciates his efforts to recognize consumer, as well as corporate, concerns. Mr. Arthur currently serves as the President of the Southeastern Association of Utility Commissioners.
FINDING: Qualified
McKinley Lee Blackburn
The Committee is likewise impressed with the level of technical understanding displayed by Mr. Blackburn and recognizes his past experience in the utility industry, as well as his past service to the Commission (appointed by the Governor to serve in a vacancy). The Committee is satisfied that, if chosen, Mr. Blackburn would execute his duties with diligence.
FINDING: Qualified
James Leon Cannon
The Committee notes Mr. Cannon's many years of past service to his community as a magistrate and appreciates his continued willingness to serve the public. The Committee is concerned, however, that Mr. Cannon's lack of experience in the area of public utilities may place him at a disadvantage in evaluating future avenues of development in the utility industries.
FINDING: Qualified
Maxine T. Dawes
The Committee commends Ms. Dawes for her continuing desire to dedicate herself to public service. Despite a lack of experience in the public utilities field per se, Ms. Dawes gave strong responses to the Committee's questions and possesses a general understanding of accounting and taxation principles. The Committee notes Ms. Dawes' overall emphasis on balancing competing concerns, such as environmental issues and utility and community prosperity.
FINDING: Qualified
Ervin E. Lambert
The Committee recognizes Dr. Lambert for his desire to protect and represent the interests of consumers in this state. The Committee seriously questions, however, Dr. Lambert's ability to adequately execute the duties of commissioner while maintaining his current responsibilities as a full-time employee of the U.S. Postal Service and as a minister. Dr. Lambert informed the Committee during questioning that he would be unwilling to relinquish his current positions.
FINDING: Not Qualified
Paul W. Smith, Jr.
The Committee appreciated Mr. Smith's interest in environmental issues and consumer protection. Mr. Smith has some experience with utility rate-making from his service as a city councilman, and emphasized his desire to evaluate the environmental impact of utility production on the surrounding community.
FINDING: Qualified
AT-LARGE
George V. Atkison
Mr. Atkison offers substantial, high-level corporate experience drawn from nearly half a century as a business manager and product director with several Fortune 500 companies. Mr. Atkison, now retired, would offer to serve full time on the Commission and noted that he would set an agenda of encouraging "stability." Mr. Atkison noted a partial loss of hearing that might affect his service on the Commission. The Committee finds Mr. Atkison's overall knowledge of Commission operations and pending issues to be of a general nature, but found his grasp of the economics of the marketplace to be more advanced.
FINDING: Qualified
Robert Walter Hundley
The Committee was impressed by Mr. Hundley's general understanding of the role of the Commission and his awareness of current industry trends and concerns. The Commission also wishes to note Mr. Hundley's past experience in the utility industry, his private business management experience, and his federal governmental service. Although the Committee was concerned about Mr. Hundley's current ownership of certain utility stock, he voluntarily expressed his willingness to divest himself of such should he be selected to serve on the Commission.
FINDING: Qualified
Clayton Baker Ingram
The Committee wishes to commend Mr. Ingram for his obvious study in the area of public utilities and regulation. The Committee was particularly impressed with his knowledge of and familiarity with concerns and trends facing the industries. Although Mr. Ingram does not possess any formal experience in the utility industry, he appears willing to dedicate the time and effort necessary to master this field.
FINDING: Qualified
Rudolph Mitchell
The Committee thanks Mr. Mitchell for his past service as a Commissioner and feels confident that he intends to continue performing his duties with integrity and fairness. The Committee noted with approval that Mr. Mitchell demonstrated an understanding of the importance of balancing advancing technology with consumer cost concerns.
FINDING: Qualified
APPEARANCES:
Senator Donald H. Holland, Chairman
213 Gressette Building
Columbia, South Carolina 29202
Senator C. Tyrone Courtney
604 Gressette Building
Columbia, South Carolina 29202
Senator Darrell Jackson
610 Gressette Building
Columbia, South Carolina 29202
Representative Thomas E. Huff
518A Blatt Building
Columbia, South Carolina 29202
Representative Kenneth Kennedy
328B Blatt Building
Columbia, South Carolina 29202
Representative Timothy C. Wilkes
422D Blatt Building
Columbia, South Carolina 29202
Representative Richard M. Quinn, Jr.,
420B Blatt Building
Columbia, South Carolina 29202
Doctor Barbara R. Hatton
President, S.C. State University
300 College Street
Orangeburg, South Carolina 29117
Mr. J. Steven Bilton
c/o Jim Bilton Ford
P.O. Box 98
St. George, South Carolina 29477-0098
ALSO IN ATTENDANCE:
Michael N. Couick, Director of Research and Attorney to the Senate Judiciary Committee (serving as Council to the Committee to Review Candidates for the South Carolina Public Service Commission).
Ms. Debra D. Hammond, Administrative Assistant
THE CHAIRMAN: This meeting was supposed to have started at 10:00 o'clock. I think if we're to accomplish what we intend to today and what's set for us in the next three days, we'd better move along.
I'm Donald Holland from Camden and I represent Kershaw and Chesterfield County in the Senate. Other members of the committee are Senator -- present at this time are Senator Jackson, Senator Courtney, At Large Mr. Bilton and, of course, two members of our staff here, Mrs. Hammond and Mike Couick, Representative Wilkes and Representative Kennedy are present from the House and are members of this particular committee.
In an effort to -- in view of the fact that this meeting is being taped and the press is present, I'm going to read a statement so there won't be any question about what I said.
Members of this committee, I'm going to call this meeting to order. This is a joint screening committee of candidates for the South Carolina Public Service Commission. This committee screens those candidates who apply for consideration by the General Assembly in election for seven positions of the Public Service Commission.
Our basic duties are set out by statute. Not only are we to inquire as to the legal qualifications of the candidates, but we're also required to determine their fitness to serve based upon their experience, knowledge of utility regulation and personal character.
This hearing will be basically conducted by the chief counsel for the Judiciary Committee which is Mr. Couick on my left here and members of the committee will ask questions they have of the candidates. I understand from Mr. Couick who is chief counsel for the Judiciary Committee that there are certain questions that must be discussed in Executive Session before this -- we start this meeting.
And for that reason, I'm going to -- I would entertain a motion at this time to go into Executive Session and let's clear any problems that we might have in the future conduct of these meetings. There is no objection. We'll now go in Executive Session. We hope to be brief and we'll have you back in here for the start of this process.
(Executive Session)
THE CHAIRMAN: I call the meeting back to order. At this time
the counsel for the committee has a statement to make in regard to the proposed conduct of this committee. Mr. Couick.
MR. COUICK: Mr. Chairman, as decided by the committee during this Executive Session over the last few minutes, the committee feels it's imperative that this process be a public process and that is the whole purpose of having these hearings today to ensure that the public has confidence in the proceedings going on before this committee. The press have free and unfettered access to the proceedings of this committee and the public feel that when this process was over that they had a full access to a fair process.
In addition, the committee feels that it's imperative that the process be fair, that it be a fair process to all concerned whether it be an incumbent or nonincumbent and for that reason while having it remain a public process, they would request that all candidates or anyone else affiliated with a candidate, please be sequestered during the proceedings unless they're with the candidates being actively questioned at that time.
To illustrate the reason for that, the questions are going to be asked of all candidates as to their knowledge of the functions of the Public Service Commission. It would be patently unfair for a candidate to sit through two and a half days of hearings and appear on Monday afternoon and have the benefit of not only hearing the questions, but hearing everyone else's answers.
So to some degree this is like the Miss America contest when they go into the glass booth, so we would ask for those persons who are not being actively questioned to please report to Room 201, make yourselves comfortable. We'll try to keep on a schedule between 30 and 45 minutes per candidate for questioning.
You're welcome to check back with Room 105, the office in the front of the Gressette Building, if you have any questions, and you're also welcome to check from time to time for messages there if you want to leave that number. Please make yourself comfortable.
We'll try to come find you if we get ahead of schedule, but please try to anticipate when we would call you back. We'll post lunch times on the door if the committee breaks for lunch or for any other reason. The press is welcome to stay. Members of the public are welcome to stay, but please interpret liberally the admonition of the committee that if you're affiliated with a candidate as well to please excuse yourself as well.
It's important not only for the candidates to excuse themselves, but if there is anyone here that's related by family or employment to a candidate, please excuse yourself as well.
Mr. Chairman, I ask on your behalf that we do that at this time.
THE CHAIRMAN: Do you have an order of candidates that are to appear before us?
MR. COUICK: Yes, Mr. Chairman, and the candidates have received copies of that. Mr. Chairman -- thank you, Mr. Wilkes. If you -- the families of candidates and fellow employees are welcome to come at the time the candidate is being screened himself. You're welcome to have your family come back or anyone here with you at the time you're being screened. Mr. Chairman, if we could take a few moments to allow folks to exit the committee room.
Mr. Chairman, Ms. Bowen would be the first candidate.
MS. BOWEN: Should I remain then?
MR. COUICK: Yes, ma'am. Ms. Bowen, if you would come up and take a seat at the hearing table over here on the left. I think the far seat might be the best one. Let's see if we can make sure if the court reporter can see you. There is a microphone there in front of you.
MS. BOWEN: I see that.
MR. COUICK: If you would pull up -- pull the button on the top towards you.
MS. BOWEN: All right. I believe it is.
MR. COUICK: All right, while you remain standing, I'm going to go ahead and swear you in if you will raise your right arm.
ANNE BOWEN, having been duly sworn, testified as follows:
MR. COUICK: Mr. Chairman, under Tab 4 are the materials for Ms. Anne Bowen. Please have a seat, Ms. Bowen. Ms. Bowen has asked, Mr. Chairman, to present a statement to the committee this morning. She submitted this as an affidavit as is required by our rules. That's the first document under Tab 4.
Ms. Bowen, would you like to submit the statement to the committee to be included in the record now with the consent of the committee or would you like to read the statement?
MS. BOWEN: I'm willing to just submit it.
MR. COUICK: Mr. Chairman, counsel would request that you allow that statement to be submitted for inclusion of the permanent record. It's a statement I believe mainly of her experiences and qualifications.
MR. CHAIRMAN: You want the statement admitted?
MR. COUICK: Yes, sir.
THE CHAIRMAN: The statement is admitted.
MS. BOWEN - EXAMINATION BY MR. COUICK:
Q. Ms. Bowen, you were presented with a copy of your Personal Data Questionnaire Summary this morning and given the opportunity to review it. I believe you had certain typographical corrections on it, namely the spelling of your name in one case and also designating that Hilton Head Island is a town.
Are there any other corrections or additions or deletions that you would like to have made to that questionnaire summary prior to its being entered as a part of the permanent record of these proceedings?
A. No, sir.
Q. Thank you. Would you please state for the committee your full name, Ms. Bowen?
A. Anne Marie Gwen Bowen.
Q. You're a resident of where?
A. Of Hilton Head Island.
Q. Ms. Bowen, I believe you received a letter earlier this week from me asking for you to bring evidence of your residency. Do you have a copy of your certificate -- voter registration or your driver's license with you?
A. I do have a driver's license. I did not receive such a letter, but, fortunately, I have my driver's license with me. Shall I present it to you?
Q. Yes.
Mr. Chairman, provisions of law require that a commissioner must be elected from the Congressional District in which he resides unless he's elected At Large. A letter went out I believe on Monday and perhaps some of the candidates haven't received it yet asking them to bring evidence of their residency.
Mr. Chairman, the driver's license Ms. Bowen indicates that she resides at 4 Nautilus Road in Hilton Head, South Carolina, 29928? Ms. Bowen, is that correct?
A. Yes, sir.
Q. Ms. Bowen, what prompted your interest in serving on the Public Service Commission?
A. I see this as a natural continuation of what I'm presently doing in my role as vice chairman of Sea Pines Public Service District. I also am keenly aware of what the future holds in terms of technological things that are coming down the line that I feel like this Commission, in particular, has the potential to really determine if those future enhancements and services will be available to all the people of South Carolina or perhaps just an elite view. And I'm very interested in being a part of that process.
Q. Ms. Bowen, your service on the Public Service Commission District there at Sea Pines is compensated. You receive $5,000 in salary a year from that service. How much time do you serve in that capacity on average on a weekly or monthly basis?
A. Well, historically, it is not designed to be as intensive as, in fact, it has been. You may be aware Hilton Head is facing many challenges in the water area and has been for several years. I would suspect that it's in excess of a full day a week at this point.
Q. And what are your responsibilities? What types of utilities do you oversee? What generally makes up your responsibilities?
A. Well, the Sea Pines Public Service District is a Public Service District of South Carolina. There is a water treatment plant. We are in the process now still of expanding sewer service to everyone in the district. We should be fully sewered by the year 2000.
My duties involve reviewing bids and contracts for construction on those services, determining which areas
-- which geographic areas to extend sewer service to.
I'm also vice chairman -- I'm sorry, chairman of the finance committee of that body and in that capacity, review regularly the debt of the commission. I also look at the depreciation reserve to determine that it's adequate to meet our future needs. Those are some of the duties.
We are wrestling with a future source of a supplemental water supply at this time, so conservation efforts are very important to us and receive a lot of focus. In fact, we've recently enacted a rate structure for our customers to encourage conservation and it's been very, very successful in that matter.
Q. Ms. Bowen, for those of us who are not familiar with the confines of that district, does it only serve the Sea Pines area or does it extend beyond the boundaries?
A. No, sir, it extends beyond the boundaries of Sea Pines Plantation. It also encompasses a portion of Shipyard Plantation, down Palmetto Bay Road and Point Comfort Plantation, a part of Pope Avenue as well.
Q. Is it supported solely by the revenues derived from the providing of -- provision of water?
A. And sewer, that's correct.
Q. Is an effort made by that district to provide water to folks that may not afford to live in one of those plantations or other areas? Is there any lower income neighborhoods that are provided water or sewer by this Public Service District?
A. Our district, you know, we're most -- we are charged to provide services within our district and within our boundaries. We really do not have any residents who would meet that criteria within our boundary.
However, I can tell you that we have entertained going forward -- again, in the situation on the island where there are residents on the north end who are not being served, we have entertained the idea of forming some type of a coalition with other utilities to attempt to see what can be done as far as giving service to those individuals.
Q. Are those areas contiguous to any area served now by your service district?
A. Not by Sea Pines, no, sir.
Q. Would you briefly state for the committee your educational background, if you would.
A. I graduated from Sea Pines Academy in 1980. And I graduated from the College of Financial Planning with a degree in 1992. That was a three-year course that I began in August of 1989. There are classes that are held with the course at the College of Charleston; however, I did not take any classes. I took it all on a home study basis. All of the examinations were held at the College of Charleston. They were proctored exams, but I was successful in completion of all of the examinations and completed the course in a timely fashion.
Q. Is that a baccalaureate program, Ms. Bowen?
A. It's an equivalent to a baccalaureate program, yes, sir.
Q. And in your occupation as financial planner, are you self-employed or --
A. I'm self-employed.
Q. Given that the duties of the Public Service Commission are extensive, what are your plans in terms of your self-employment as a financial planner should you be elected to this position?
A. If I'm successful in being elected to this position, the Public Service Commission would be my first professional priority. If I'm able to successfully discharge my duties in that capacity and in addition to maintain the clients that I have at this time that I think that if it's acceptable to whoever would determine if that's a acceptable procedure, then I would endeavor to do that. However, I do understand that the Public Service Commission would be the number one priority.
Q. In your capacity as a certified financial planner, what type of fees do you receive for your services?
A. I'm paid on an hourly basis by my clients.
Q. Do you receive --
A. Sometimes --
Q. I'm sorry. Go ahead.
A. That's okay. There is within my fee schedule the option to be paid on a percentage of assets basis for asset management. However, at this time I don't have any clients that are under that arrangement. Everyone is worked on an hourly or flat fee basis. I do not sell securities or insurance of any type.
Q. In terms of your financial planning, though, would you be called upon to create a portfolio of investments that may include regulated securities?
A. Yes. There is the potential for that.
Q. And would there be the potential that some of those securities maybe utility stocks?
A. Yes, there is a potential for that.
Q. What approach would you take for your service on the Public Service Commission and your dual employment sense that you're offering this financial advice? How would you avoid the appearance of impropriety of offering that advice as to investment in utility stocks?
A. Well, generally, the way that I handle my asset management is to only utilize no load mutual funds, so I'm not presently and do not anticipate becoming involved in the market place of buying individual stocks, or bonds, for that matter, of any nature.
So there -- I don't believe there would be a conflict since the portfolio managers of each of the mutual funds are the ones making the decisions to buy and hold those securities. I believe that would be adequately addressed by that.
Q. So the closest you would come to actively being involved in utility stocks would be perhaps suggesting a utility based or oriented --
A. To recommend a mutual fund that met those objectives.
Q. That was based or somewhat oriented toward utility stocks?
A. That's correct.
Q. Have you ever served as a lobbyist or a lobbyist principal, Ms. Bowen?
A. No, sir, I have not.
Q. Are you actively involved at any point in any political campaigns at this time?
A. No, sir.
Q. Have you contributed any funds to any person running for public office since your declaration of candidacy for this position?
A. No, sir.
Q. You indicate on your Personal Data Questionnaire that you've expended $49.30 in sending letters to all 170 members of the South Carolina House and Senate. Aside from travel expense, have you expended any other funds since your filing of this report?
A. No.
Q. Mr. Chairman, your staff has checked with the South Carolina Law Enforcement Division and also with the appropriate credit agencies and found that SLED have no reports of any judgments or criminal convictions on the part of Ms. Bowen.
In addition, her SLED report had no negative entries in the sense that there was nothing that was reported that would be an indication of any delay or failure to pay any of her obligations.
Moving on to talk a little bit, Ms. Bowen, about your preparation or experience that would help you serve on the Public Service Commission, if you had to name two or three hot topics that you would think that would be important to the Public Service Commission, it would be on the cutting edge in terms of being a successful commissioner, what would those topics be?
A. Probably number one would be the coming revelation in telecommunications. And I think that all of us hear on the news and read about it in the newspaper every day about the Information Highway and how -- how that's going to make things that today we only dream about happen for each of us in our homes.
Q. What would be the second thing?
A. Probably the second thing would be as it relates to water utilities. I think that the focus needs to be more on making the most of your resources that they have at hand.
Q. So that would be the demand supply?
A. I think it encourages conservation and efficient use of that supply.
Q. So demand side management for water utilities. As to the first revolution telecommunications, what responsibilities do you understand the Public Service Commission to have or authority do they have to impact on that revolution in ensuring that it is properly managed and it's fairly available to all South Carolinians?
A. Well, certainly, the Public Service Commission has had the regulation and supervisory authority to make sure that the rates that are charged --
Q. By whom?
A. -- are fair.
Q. By whom?
A. By the -- by those companies and those industries --
Q. Which companies --
A. -- operating within the telecommunications industry operating within the boundaries of this state. Those that are -- that are publicly available.
Q. Which companies? What type of company would that be, Ms. Bowen?
A. Well, for instance, the telephone company. Southern Bell, you know. MCI, perhaps. You know there are any number up that could be potential.
Q. Would cable television companies be something subject to regulation --
A. No, I don't believe that they are.
Q. What -- in what manner would they regulate the revolution or how would they ensure fairness?
A. Well, I think that the important consideration is that the services are available at a reasonable rate. Reasonable being defined by it is reasonable for the company to have a rate of return commiserate with the risk that they are taking and it was their investment.
However, the people of the state of South Carolina should have that service available to them for a reasonable rate, so there is a balance that has to be found there.
Q. My limited understanding of the telecommunications revolution is that everybody is going to kind of end up being vanilla, whether they're going to be in a cable company or a phone company, you're going to be a provider of all sorts of information through various means.
If phone companies are going to go into the cable television business that would be as you said unregulated I believe by the Public Service Commission; is that correct?
A. It's my understanding and, again, I -- I don't -- I've reviewed the practice and procedure and also the available legislation of the Public Service Commission and it's my understanding that the cable companies do not fall under their jurisdiction.
Q. They are federally regulated?
A. Right.
Q. And if a phone company is going to go into the cable business, they're going to have to have the fiberoptic cable to go into cable television. Would it be appropriate for the Public Service Commission to allow a phone company to include in its rate base to be charged to its telephone customers the development of a fiberoptic system to supply cable television?
A. I would have to review that in more detail in order to answer you adequately, sir.
Q. Are you familiar with a topic called cross subsidization or the ability of a company to take costs that would generate unregulated profits and put those costs in the regulated rate base?
A. I have been vaguely familiar with that, sir.
Q. What would you think the Public Service Commission would need to do to avoid that problem or is it a problem?
A. Well, I think that the -- potentially, it would be a problem because we would want to ensure that the customers that are paying for service are not subsidizing another service that that company can operate without regulation. And I think there that needs to be some attention to that matter. As far as --
Q. Are you aware of any utility that may have attempted or has done that in South Carolina to take an unregulated enterprise and attempt to include it in its rate base or at least benefit by some portion of the expense of that being included in its rate base?
A. I believe that I am a little familiar with that. I don't want to say who it is because I may be incorrect, but in --
Q. Would you talk generically about what type of operation was unregulated and what type of operation was regulated?
A. Perhaps a power company, for instance, that --
Q. What was the unregulated activity?
A. You know, perhaps the -- a nuclear power plant. That would come under the Nuclear Regulatory Commission, perhaps. I'm slightly aware of there was an instance, I believe, in regard to that.
Q. What role should the Public Service Commission staff play?
A. A very important role in terms of collecting the information that is necessary to review before the Public Service Commission makes decisions and administratively to make sure that the public is informed of the process and the proceeding.
Q. You mentioned earlier demand side management and you mentioned this twice, once in your opening when you talked about Sea Pines Public Service District and then you mentioned it a little while ago as one of your top issues.
This is, in fact, a concern to a number of environmental groups including the Sierra Club. What could the Public Service Commission do to encourage demand side controls as opposed to how they more or less now regulate from the supply side? What would you seek to do as a Public Service Commissioner?
A. Well, I think that you would have to really review carefully each individual circumstance. However, in the case, for instance, of a private utility who was seeking a rate increase based on an expansion into an additional water source, there may be encouragement -- there may need to be encouragement for certainty on the part of the commission to see that that utility has sufficiently explored all of their available options.
And one of those options would certainly be water conservation. Other sources that may be less costly to the customers. In fact, that's what I have in mind most particularly.
Q. Ms. Bowen, when those things approach the company providing service. Companies typically are in the business of making money. If you asked them to sell for less rather than more, most folks would see that as the ability to make less money and in this nation of free enterprise, how do you accomplish that goal of selling less and making more?
A. Are you talking about in terms of water conservation?
Q. Any type of demand supply management -- demand side management?
A. Well, I think that you can address that in your rate structure to some extent such as at Sea Pines Public Service District had done by having a base rate for the initial usage and then having an additional higher rate for the overusage, so that those individuals that do overuse the resource are paying a higher rate and that to some extent will address the revenue question.
At least that's been our experience locally, that our revenue has not suffered. Our usage has sufficiently been stable and declined, however, our revenue has been very steady.
Q. Ms. Bowen, does the Public Service Commission have any responsibilities as to environmental impact?
A. I think that we have the responsibility to make sure from my understanding that the utilities are in compliance with whatever DHEC and, in particular, the waste water area, they are in compliance with whatever regulation DHEC has imposed on them.
Q. Do you have any statutory responsibility independent of whatever DHEC may do?
A. I'm not aware of that, sir.
Q. Are you familiar with the concept called Wheeling, W-h-e-e-l-i-n-g?
A. No, sir.
Q. Wheeling?
A. I do not believe I am.
Q. How about gas cooling?
A. No, sir.
Q. Gas cooling? What authority or what responsibilities does the PSC have for the regulation of motor carriers?
A. Of motor carriers, I believe that the responsibility lies in the rate setting. I believe it has been changed in the area of -- recently in that regard. I'm not aware of what specific changes were made with regard to motor carriers, but I am aware there have been some changes in the commission's duty in that area.
Q. What is the proper role of the Consumer Advocate before the Public Service Commission?
A. My understanding is they are always there to ensure that the public is well served and in that capacity that the ability for the company or the utility before the commission to generate a profit is equitably balanced against the consumers' ability to access the service on a fair basis.
Q. And what is your role, vis-a-vis, the Public -- the Consumer Advocate? As a commissioner, what type of role do you have, vis-a-vis, the Consumer Advocate?
A. As a commissioner on the Public Service Commission?
Q. Right. It is a cooperative role?
A. I would say that you're representing the public. That you are there to make sure that their interests are served. I see that as the one of the very important duties as a commissioner.
Q. So would you say you would have a cooperative role with the Consumer Advocate --
A. Well --
Q. -- in terms of rate hearings and siting hearings, that sort of thing?
A. No, because I see the Public Service Commission as being the authority and having the -- having the charge, if you will, to make sure that they are effectively balancing the needs of the Consumer Advocate with the need of the utility to be a profitable venture.
Q. So is it more judicial in nature, do you think?
A. I would say that there -- there's an element in that because they've got to effectively balance both of those roles. That's my -- that's my impression.
Q. Are you familiar with the concept of generational mix --
A. I'm not.
Q. -- production of power?
A. No, I'm not.
Q. And, finally, do you have any recommendations for improving the current system of screening for election of candidates or commissioners to the Public Service Commission based upon what you've been through so far?
A. I think that it would probably be helpful to have more advance understanding of what you as a body are looking to determine from the individual candidates. I think that that would give a -- more feeling of being better prepared in these proceedings.
I must say I came in this room feeling very prepared. I read the legislation. I have read the public policy. I've studied the commission's records, but I leave it feeling a little bit less prepared.
Q. Mr. Chairman, that's all the questions your counsel has.
THE CHAIRMAN: Any members of the committee have any questions of this candidate?
SENATOR COURTNEY: Mr. Chairman?
THE CHAIRMAN: The Senator from Spartanburg.
EXAMINATION BY SENATOR COURTNEY:
Q. Ms. Bowen, I just want to ask you couple of questions about your service as a financial planner.
A. Yes, sir.
Q. Do any of your present or past clients own any utility stocks that are regulated by the Public Service Commission?
A. If they do, they only own it through a mutual fund.
Q. Nothing that you have recommended?
A. No, sir. Well, I recommend specific mutual funds. However, at this time I do not recommend individual utility securities.
Q. Are you willing to refrain from recommending any specific utility stocks to your clients if you are to serve on the --
A. Yes.
Q. -- Public Service Commission?
A. Yes, I certainly am.
Q. Do you have any association with any law firm or any attorney or anyone who appears before the Public Service Commission representing utility companies?
A. Not that I'm aware of. I work closely with many law firms on the island and in Beaufort. I'm not aware of any of their activities in that regard. But I work mostly in Family Court type matters.
Q. Thank you. Thank you, Mr. Chairman.
SENATOR JACKSON: Mr. Chairman?
THE CHAIRMAN: Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Ms. Bowen, I want to ask you a question about your previous employment as a marketing advertising executive.
A. Uh-huh.
Q. In that capacity, have you ever had an opportunity to represent a utility company or a company that was regulated by the Public Service Commission?
A. Only to solicit advertising from those companies. I was involved in that capacity. And I have since learned in my review of the voluminous materials that I have studied that the Public Service Commission takes out those advertising expenses in considering the rate process, which was interesting for me to find out.
Q. One follow-up, so you solicited advertising. Did you have one of the companies as a client and were you successful in representing?
A. There may have been occasions over my career where I was successful in soliciting advertising from a utility. I am not aware at this time of any specific instance, but it's quite possible that was the case.
Q. So you actually served as an advertising executive as opposed to Public Relations specialist? You did not represent them in trying to shape the public's perception of that company?
A. Well, that's -- it was closely tied to their advertising efforts and I would give advice to my clients with regard to how to frame their message and develop their advertising campaign. However, most of the larger utilities, if not all of them, employ advertising agencies to perform that function for them. And generally in those cases, I would serve as a go-between between the media and the advertising agency, so I would probably say that it was very rare if it ever happened that I would come directly to the utility.
Q. Thank you.
THE CHAIRMAN: Representative Wilkes.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Good morning, Ms. Bowen. First of all, I thank you for your wish to be a public servant and taking your time to come and talk with us and if I may put you at ease a little bit about the questions that we're asking, we don't expect any candidate to be able to answer every single technical question.
We're trying to determine your general knowledge of business and of law and accounting and what the Public Service Commission does, so I hope --
A. I understand.
Q. -- that puts you a little bit more at ease.
I'd like to ask you a question that just came to mind as you were talking. Recently, I read where the mayor of Hilton Head had taken a position against any further commercial or industrial development on the island. Given the fact that the PSC does play a role in -- a significant role in industrial development, if you have that same parochial attitude maybe that your mayor does, could you divorce yourself from that attitude and look at that economic development or industrial development on a statewide basis?
A. Well, I can assure you that I do not share the views of our present mayor and I recognize the responsibility that I would have as a commissioner to put aside whatever personal feelings that I had on any issue and to only rely on the facts of the particular circumstances and statutes that I'm bound by.
Q. You mentioned a word a little while ago that is very important to me in assessment of candidates and that is balance. Today, we're faced with so many issues that are controversial and where you have advocates and adversaries and whether it's industrial development versus environmental protection or big business versus small business or urban development versus rural development, can you give us some idea of how you approach problem solving and decision making given the often time diverse views on issues like I just mentioned?
A. Well, I can probably give you a personal example of a process that I went through as a result of my coming over to Sea Pines Public Service District. And at that time the water issue -- the future source of water on Hilton Head had been agreed upon and determined to be the Savannah River and based on everything -- all the knowledge that I had of the situation and following that, I have to state honestly that my personal feeling coming on to that commission is that had probably been a very good decision.
Once I had the opportunity, however, to fully review all of the relevant matters that I had not been aware of and to study the financial side of the equation, however, I found myself first of all, having to remove my personal feelings as I made that evaluation having come to the process with an idea in my mind as to how I felt. And I feel like I was successfully able to do that and, in fact, really have changed my mind about the entire issue based on the financial analysis and the additional facts that have -- have come to light and, in fact, that has -- that opinion has spread and -- and there are other utilities on the island now who have also turned away from that solution, so I think that's one instance where I have employed that process.
Q. Thank you. One other quick question. On the matter of the cross subsidization that you were talking about a few minutes ago, I'm going to ask you maybe a bit more of a specific question than Mr. Couick asked you.
If, for instance, a real estate company were -- I mean the utility company were to have a real estate subsidiary, say, a wholly owned subsidiary in timber management, let's say, and I for accounting purposes was allowed to make certain journal entries that would shift profits and losses and expenses and depreciation, et cetera, from one company to the other --
A. Uh-huh.
Q. Would you think it important to ferret out all of this from the county standpoint before you made a decision in a rate making case, for instance?
A. I think that it needs to be clear to me what all of -- you know, what all the numbers represent in that case. And I think in determining, you know, what elements, for instance, of the asset base may be unrelated assets or income or liabilities, I think it's clear to have that understanding and then to be bound by whatever statutes are in place to act with that knowledge. I would think that that --
Q. In other words you would require full disclosure on all of the activities of that utility?
A. Well, if it is relevant to the rate making case, then certainly, I would -- would pursue that.
Q. Thank you.
A. It may not be bound by the statute.
Q. Thank you very much.
THE CHAIRMAN: Any other questions? Yes, ma'am.
EXAMINATION BY DOCTOR HATTON:
Q. Ms. Bowen, who could help you to inform you what the public policy issues are to be resolved if the Sea Pines Public Service District were to reach out to those people who don't have services and try to serve them? What public policy issues are involved in your making that kind of decision?
A. Well, I think that for a long time it has been apparent to us as a commission -- and we are not the only commission, let me clarify that. There has been discussion of forming a coalition of either of the other utilities with the town to address the inequity.
I think there is a number of policy issues that have to be resolved before that can take place. One of those, of course, is that the present customers being served by that utility have paid for their service. They have -- they paid for their service. They have -- they've paid for their portion of the treatment plant and I can understand or anticipate that they perhaps might be unwilling to subsidize those that don't have service, but I'm also aware that there is a precedent in other areas for doing so.
I'm aware of, you know, the electric companies that help people who can't pay their bills and, in fact, this commission has some interest in that regard in making sure that those that are financially disadvantaged have those services.
They're not luxuries. They're necessities to people. And I think that because of that distinction that it's not a luxury that those are the necessities, that we all have an obligation to make sure that those are available to everybody. So I feel like that there -- there are valid concerns, but I think that they can be addressed effectively.
Q. Thank you very much.
THE CHAIRMAN: Representative Kennedy, any questions?
REPRESENTATIVE KENNEDY: No.
RE-EXAMINATION BY MR. COUICK:
Q. Ms. Bowen, I had failed to ask you. You indicated that you had no security interest that you would see the conflicting out (phonetic) from service on the commission. Do you have any utility stock?
A. No, I do not.
Q. Does your husband own any utility stock?
A. No. I own I believe some shares in British Petroleum Oil Company.
Q. Thank you.
A. And several mutual funds which may own utility stocks in those mutual funds.
THE CHAIRMAN: Ms. Bowen, on behalf of the committee, I want to thank you for offering as a candidate for the Public Service Commission. First, a person with your background and knowledge, it's commendable that you're seeking a public job.
I find in recent years it's difficult to get some people to reach out and serve the public because of the criticism they take. The effort we're going through here this morning is brought about largely because of the fact that we're heard this said all the time, the public wants to know, the public has got to know.
As a result of that, we're here trying to do what we think that the public has demanded of us. You are a commendable candidate and I thank you for coming. The next candidate.
MR. COUICK: Mr. Chairman, Ms. Clyburn is on her way.
A. May I ask a question?
MR. COUICK: Yes, Ms. Bowen.
A. Would it be possible now that I've been through the process for me to sit in on some of the other candidates? Has that been --
SENATOR COURTNEY: Mr. Chairman, the only problem I would see with that is potential for follow-up questions later if something comes up that.
THE CHAIRMAN: Our policy would be that once you're sequestered, you're sequestered, Ms. Bowen, if you are a candidate. We could discuss with you the implications of it, but --
A. That's all right. So are you requesting that I leave now?
THE CHAIRMAN: We would prefer that you did.
MR. COUICK: Ms. Bowen, and I will repeat this for the other candidates, the screening policy, are you familiar with it in terms of soliciting for pledges and the fact that your release to seek pledges does not start until the screening report is issued.
A. Yes, I understand that completely. Do you anticipate that that will be -- do you have a time frame in mind for the process?
THE CHAIRMAN: It's hard for us to give you a time frame because what we're going to do, of course, is go through the process you've just gone through and then the staff is going to transcribe the record and have staff to review that. Any noticeable defects of anyone will we brought back to us, then we'll discuss each candidate individually, so we don't know. It depends on how many stay in the candidacy.
MR. COUICK: Mr. Chairman, to protect the candidate's interest, we will formally notify you of the release. You'll have a clear time to move forward.
A. All right. Thank you.
1. Ms. Anne M. Bowen
Home Address: Business Address:
4 Nautilus Road 19 Pope Avenue
Hilton Head, SC 29928 Executive Park
Hilton Head, SC 29928
2. She was born in Augusta, Georgia on August 14, 1962.
Social Security number: ***-**-****.
3. S.C. Driver's License Number: *******.
S.C. Voter's Registration Number: 4 400 472.
4. She was married to John H. Bowen on June 22, 1985.
She has two children: R. Rushton Bowen, age 6; M. Eden Bowen, age 10 months.
6. She graduated from the College for Financial Planning, (Denver, Colorado) as a Certified Financial Planner in 1992.
7. Appointed to Sea Pines Public Service District in June 1990 and presently serves as Vice - Chairman.
9. She worked for Gannet Newspaper Corporation as a sales executive from 1980 to 1987; sales executive for the Island Packet Newspaper from 1987 to 1989; Self employed in Financial Services since 1989.
10. She serves as Principal of Anne M. Bowen, Certified Financial Planner.
22. She has spent $49.30 on letters to all 170 members of the legislature.
26. Professional Organizations: Hilton Head Island Council of Estate and Financial Advisors; SC Society of Institute of Certified Financial Planners; The Institute of Certified Financial Planners (National); The Institute of Certified Financial Planners, registered practitioner, (National).
27. Civic, charitable, etc. organizations: Sea Pines Public Service District, Vice Chairman; Commissioner, Town of Hilton Head Island Water Commission; Hilton Head Island Chamber of Commerce, Executive Exchange; Hilton Head Speaker's Bureau; Board Member, Leadership Hilton Head Forum; Women's Association of Hilton Head; First Baptist Church of Hilton Head.
29. Five letters of reference:
(a) Honorable John C. West
Former Governor of SC
P.O. Drawer 3
Hilton Head, SC 29938
(803) 785-2171
(b) Honorable Thomas C. Taylor
Chairman, Beaufort County Council
P.O. Drawer 5280
Hilton Head, SC 29938
(803) 785-7606
(c) Paula Harper Bethea
P.O. Drawer 3
Hilton Head, SC 29938
(803) 785-2171
(d) C.W. Garnett
Vice President, The National Bank of South Carolina
P.O. Box 1567
Greenville, SC 29602-1567
(803) 241-7903
(e) Sara Johnson Borton
Publisher, The Island Packet Newspaper
P.O. Box 5727
Hilton Head, SC 29938
(803) 785-4293
30. First District
MR. COUICK: Mr. Chairman, that's all. Ms. Clyburn, I believe is present. Mr. Chairman, the next candidate is Ms. Mignon Clyburn. Ms. Clyburn, if you would come forward.
MS. CLYBURN: Is this forward?
MR. COUICK: Yes, ma'am. Ms. Clyburn, while you're standing, if you would raise your right hand and swear.
MIGNON CLYBURN, having been duly sworn, testified as follows:
MS. CLYBURN - EXAMINATION BY MR. COUICK:
Q. Ms. Clyburn, please make yourself comfortable. I'm not sure if you received a letter that I sent out earlier this week requesting you to bring evidence of your residency. Do you have a voter registration certificate or a driver's license?
A. Yes.
Q. If you would share that with Ms. Pendavaris. Mr. Chairman, I have Ms. Clyburn's voter registration card showing that she lives at 16 Darlington Avenue, Charleston, South Carolina, 29403. Ms. Clyburn, is that your correct, current address?
A. It is.
Q. Thank you. Would you please state for the record your full name?
A. Mignon Letitia Clyburn.
Q. Ms. Clyburn, you were supplied with a copy of your Personal Data Questionnaire Summary earlier today. Did you have an opportunity to review it and do you know of anything that needs to be corrected with that?
A. Yes, I did. Everything seems to be in order.
Q. Did you have -- would you object to that being a part of the permanent record of this hearing?
A. No, I will not.
Q. Thank you. Ms. Clyburn, what prompted your interest in service on the Public Service Commission?
A. I have an interest in my state and in public service and
-- may I read this statement? Would it be -- or did you
-- would you -- I'm trying to answer that.
Q. Mr. Chairman, staff had notified each of the candidates if they wished to read a statement into the record, they needed to supply us an affidavit. To the extent, you can perhaps incorporate that into your response to the question would certainly be okay.
A. For the past ten years, I have been manager of a weekly newspaper here in South Carolina.
THE CHAIRMAN: Ma'am, let me ask you this, is this the statement you want to submit to the committee?
A. I'm going to --
THE CHAIRMAN: You're just going to --
A. Right. I'm paraphrasing it. I have -- and I believe that that -- that newspaper, The Coastal Times Weekly newspaper, exposed me to a lot of people and their interests and because of that, I have been volunteering for many years, for over ten years, as well in terms of my background. So public service has been always important to me and the Public Service Commission in its duty to the citizens of South Carolina is one that I consider a big challenge and an interest to me because of the nature of utilities and the need for them to be regulated by another outside body.
Q. Ms. Clyburn, do you own any utility stocks?
A. I have one stock in SCE&G.
Q. What would be your plans --
A. One share. I'm sorry.
Q. What would be your plans for your investment in utility stocks should you be elected to the Public Service Commission?
A. If the rules stated that I needed to dis--- to not -- disinvest, I believe is the word --
Q. So --
A. -- then I would do so. But, again, it's just one share.
Q. You would sell that stock?
A. I would sell it.
Q. Ms. Clyburn, what improvements would you make at the commission if you were elected or what changes would you make?
A. Coming from a newspaper standpoint, I really think that the public is not aware of the duties -- of the vast amount of duties that the commission has. I really think that just talking to some people about this, they really did not know what it meant.
I really think that from a public educational standpoint, which is where my forte or where my interest has been for the past ten years, I think that there should be a more working, an ongoing relationship with the Public Service Commission because I really don't think that the public has a good picture or the sensitivity that -- people complain about rates, but they don't know what all of the variables that to go into it.
So as far as that's concerned even though it's not day to day specific in reference to the operation of PSC, I think --
Q. That would be your overall theme would be try to bring the commission closer to the public concern?
A. To the public, right. Again, I think that there is a big line of ignorance.
Q. What part of that would you do as a commissioner and what part of that would be assigned to staff to do?
A. Again, I have a background in newspapers, so I would want to be more hands on. I know there is -- just looking at the structure of the agency, there is a person who is responsible for press releases and all of that, but I -- at each site or at each location where we would travel, I would be willing to, if it's permitted, use the relationships that I've developed over the past several years with several other media sources to, you know, let them know what's going on and hopefully sometimes when they see someone they're more familiar with, they would be more prone to either run or disperse the information that you may be distributing.
But they don't consider it worthy because they don't have an ongoing relationship with you, but if it is somebody in media with a background that they're accustomed to seeing at meetings once a year, they might be more prone to be more open and receptive to information that you might be disseminating.
Q. Ms. Clyburn, in this role as a commissioner, you certainly bring a new focus to the role of commissioner and a commendable one in terms of bringing it closer to the public, but do you see any tension there between your service as a commissioner who in essence is a judge on rate cases and also being a -- to some degree an activist in the sense of taking the opportunity to go out and make contact directly with the public about an ongoing case?
A. I don't think I need to be case specific. I think that would again be pushing things a little bit too far, but there are some basic things that I believe our community is just simply unaware of and, again, I think that dimension would be an asset.
Q. You mention that you now own and, I guess, or you're an associate publisher of The Coastal Times newspaper?
A. Sometimes that's synonymous. Chief cook and bottle washer.
Q. Do you have plans to continue your involvement with the newspaper should you be elected?
A. No, I do not.
Q. Do you have an ownership interest in the newspaper?
A. Yes, I do.
Q. Would you continue your ownership in the newspaper?
A. That is being discussed. I've had several people who are interested if I am elected to taking over that concern.
Q. If you retained your interest in the newspaper, what ethical concerns would be heightened for you serving on the commission and owning a newspaper at the same time? What would you have to be careful of?
A. I would not -- if -- if elected, I would not have anything to do with the day to day operations. I would strictly be as an advisor. Most publishers, if you note, are real hands off in terms of the day to day workings. They have nothing to do with the editorial staff.
While they want their publication to be a viable one in terms of bottom line making money, they don't have anything to do again with the day to day operations, so the possible conflict in terms of -- I don't know if you're thinking about divulging certain information, that wouldn't come into play since --
Q. And that was one. And one -- the other one is the bottom line in terms of money. If all of a sudden, with an ownership interest, you notice SCE&G's advertising went up 1500 percent after your election, what do you need to do?
A. That is something that I would have -- I would really have to evaluate whether or not I could accept in good faith any utility monies. I would really have to look at that from SCE&G or any of the regulatories because I didn't want -- wouldn't want -- would not want the appearance of any conflict or any favoritism.
So there are some publications who don't accept cigarette ads or liquor ads and I feel that again, if I maintained ownership and if elected, then if need be, I would make that decision.
Q. Mr. Chairman, for the committee's benefit staff has had SLED do a check of judgments and any criminal convictions upon Ms. Clyburn and that check was negative. There were no entries there. The credit report was also a positive credit report in that there were no negative entries on that.
Just generally talking a little bit the role of the Public Service Commission, I'd like to throw out some terms to you, Ms. Clyburn, and see if you're somewhat familiar with them and I'm not expecting anybody to know all of this. I certainly am not familiar with all these concepts. Just to get an idea of your familiarity.
Generational mix, use of fuels to have a cleaner burn in terms of an environmental purposes, what authority does the Public Service Commission have in that area?
A. I'm afraid I can't remember that --
Q. And that's certainly fine. That's certainly fine. How about wheeling? Have you heard of wheeling?
A. Excuse me?
Q. W-h-e-e-l-i-n-g, wheeling of utility resources?
A. No, sir, I'm afraid not.
Q. How about demand side management? Demand side management?
A. If I am not mistaken, I'm thinking that it has something to do with the fluctuation that may occur during peak or low periods. Say, right now we would on a high demand side.
Q. Exactly.
A. And during, say, March or April, we're on a low demand side, so that there needs to be a balance with -- in terms of rates, so that it wouldn't have the peak and low
-- even though you're going to see fluctuations in your -- unfortunately when I open my bill, I'm going to see fluctuations, so that the fluctuations wouldn't be as varied.
Q. And you bring up --
A. You need to keep that in consideration when thinking of the whole rate structure for six months or a year.
Q. And a lot of environmental groups would like to see conservation caused by demand side management and the feeling they express is exactly the opposite of what you just expressed. What they would like to see is that during high peak times, energy costs more rather than less. From a public policy perspective, analyze that for me or as a reporter, what are the concerns you have on either side? I mean --
A. You're saying --
Q. -- from charging more for --
A. You're saying more at peak time? I really am as a consumer more in line with averaging out, spreading that out as opposed to hitting somebody at a certain time of year because of variances and the weather conditions, so I think I would be more of an advocate of, you know, looking at the past trends even though this past -- past couple of days has been kind of defiant of all of those in terms of the lows that we are experiencing in the country.
But if you could take the 30-year averages or whatever we're looking at and see where they are and attempt to make it more -- spread it over -- over the course of the six months to a year, I really think that that would be better for the consumer.
Q. And you would do that even though you won't be more like to have conservation increased if you charge more?
A. Excuse me? You said I would do that --
Q. You would be more --
A. -- even though I would --
Q. You would rather do that even though higher rates may make folks conserve a little bit more?
A. That is a tough one because I can see both sides. At this point, I would stick with that, but maybe that does need to be evaluated because again I recognize that I need -- the need not be wasteful because there are no supplies that limitless. You know, we've got limits on all things, but there are so many other types of measures including media sponsor -- and then again that's my -- that's where I've been for the past ten years that's why I keep bringing it up.
That are other types of ways I think to get people's minds thinking more in terms of conservation other than strictly price specific ones.
Q. Could you please tell the committee what your understanding is of the types of utilities regulated by the Public Service Commission?
A. Telephone and telegraph type facilities meaning Southern Bell. I say Southern Bell because that's what I use. The electric utilities, motor vehicle, transit motor vehicle type entities. These are the ones that I can think of right now.
Q. That's fine. And, Ms. Clyburn, what role should the PSC staff play?
A. Judging by some of my responses today, I think more of a support role. There is some phraseology and some specifics that -- of course, I'm not an attorney. I haven't been working with a co-op or a utility for years, so there are some things I'm going to be quite weak on.
I don't think I'm the dumbest person in the world, but by the same token, I don't know a lot of specifics. So in terms of staff, strictly support and their expertise in those areas and, you know, working as a collective, everybody benefits.
Q. The committee certainly is not looking for anyone that has an absolute knowledge of all these concepts. I'm really just trying to plumb and find out basically your experience level. But I think that from indications of previous question what they're looking for is a firm understanding of how you make decisions, what's important to you and what grounds those decisions as a matter of public policy. And I hope that makes you more comfortable because you certainly have done well when you expressed those things.
What else would you want to tell the committee as a matter of things of public policy that are important to you and that you would take not necessarily as an agenda into your service at the Public Service Commission, but what makes things fair, what makes things right for you? What are you looking for to accomplish? What do you want to be the epitaph if one has to write it for you when you're through with your service?
A. As a business owner for nearly ten years, I recognize that there is a need to make a profit. You cannot live -- you cannot get motivated without one and in terms of utilities, because we're dealing with either monopolies or oligopolies, businesses that really don't -- aren't subjected to the same type of market, of course, as a newspaper would be, there is a need for this body, the Public Service Commission, to act as a governing body or a buffer so to speak between -- the voice between the overall masses of the community and the monopoly or oligopoly.
I think that fairness is the one word that comes to mind. Fairness to stockholders and fairness to persons who -- who are serviced -- who are users of services. Hundreds of thousands of people in our state who are the users of the services, they are entitled to the lowest rate possible.
By the same token, they -- in their pursuits in terms of business as well as working, they know that they can't get a paycheck without the entity making any money. So by the same token these utilities must have a reasonable rate of return in order for expansion to be more efficient, in order to finance plant and facility, again, expansions that would make services hopefully in the long haul more economical and more efficient.
Q. Yes, ma'am.
A. So an attempt to strike that balance I think would be a must. But fairness -- I mean fairness to everyone involved that, you know, you and I and everybody in this room cannot sufficiently or adequately run any utility. I mean we really can't and most -- we've got to recognize that economies of scale come into play and when they do again there needs to be a buffer. But there needs to be a fairness on both ends.
Q. Yes, ma'am. And the final couple of questions, you indicate on your Personal Data Questionnaire that you had expended a little in excess, I believe, of $150?
A. Well, $100 and $50 yet because I was waiting to see.
Q. The follow up more?
A. Right.
Q. Have you expended any more monies since that time?
A. No. I did not bring a copy of the phone call, but, no, I just called everyone to say, not to ask for anything else except to express interest in this because I know it's premature to ask for anything else.
Q. Yes, ma'am.
A. I do know that.
Q. And finally, do you have any recommendations for this committee to improve its process to make it fairer or to bring more folks to the table?
A. I really think that if we -- if the commission were to do more of a PR, and, again, I don't mean to harp on any one thing, this is my background, more of a better relationship with some of the media entities, more people would know about the commission, its function and what's going on.
People -- in degree people that I'm with just simply -- I've had to state do you know about and they're like I think I have, so there is a real across the board ignorance factor, I don't know how else to put it, about the interworkings of this particular entity.
Q. You're talking about the commission?
A. And I think -- yes.
Q. How about this committee? What can this committee do better, the selection committee, the screening committee?
A. I feel a little uneasy about it. I don't know. I might want to sleep on it. I really don't know. It's my first time and I'm real nervous, so I'm not sure and there is nothing you can do about that, but I'm not sure what else -- you've been most cooperative in terms of, you know, getting information out on a timely basis. Right now, I cannot off the --
Q. Thank you, Ms. Clyburn. Mr. Chairman, that's it.
THE CHAIRMAN: Any questions from any members of the committee?
SENATOR COURTNEY: Mr. Chairman? Senator.
EXAMINATION BY SENATOR COURTNEY:
Q. Ms. Clyburn, I want to agree with you when you say you're not the dumbest person in the world. You're obviously a very bright and articulate young woman and I admire you that you have the initiative to own and operate your own business. And I want to say, too, that you don't have to apologize for not being an attorney. These days you can brag about that.
I guess I have just a couple of questions, one is a philosophical type question. What do you see the role of the Public Service Commission to be? And I'm asking you is it an agency that's there to regulate industry to see that it makes a profit, a fair profit, or is it an agency there to protect consumers?
A. There is -- both. There is a balance again that must be maintained. If I can make a parallel from my own publication, there is an ongoing struggle, but a must to make a profit, to be able to pay for people that work for me, to be able to pay my printer today when I go back. So there is an ongoing struggle for that.
But by the same token, there is a duty that I have to serve that segment of the community or that niche which I've carved out for myself and that balance, there is no one variable that's any more significant than the other.
Now right now when I go home, I need to go home and pay my printer. Right now what I consider more important is bottom line, but I can't escape the fact that if I do not adequately serve my readers, if I do -- am not fair in my assessment or in my deliverance of information that I'm going to have a problem ultimately. The whole enterprise fails, so what I'm saying is there has to be an equal balance there recognizing that.
The monopoly or oligopoly has to -- is the one best in line to deliver that service, but again the consumer, you and I, everyone in this state, is entitled to the lowest rate possible. They know they're going to have to pay something, but the lowest rate possible.
Again, that balance has to be maintained. No one over the other and some people might argue with that, but there has got to be a balance struck there.
Q. Let me ask you also a question that Mr. Couick touched on, that is, the advertising in your newspaper, have you in the past accepted advertising from utility companies through the paper?
A. Yes, I have.
Q. And I don't have any problem with that. How would you handle that in the future if you did see an increase? You spoke a little bit about it, but I didn't really get a clear answer.
A. Right. It would really depend -- I went in two different directions. That's probably why you were not sure what I said. Again, if we were to sell the enterprise, then I don't have a problem. If I were to maintain ownership control, I would probably feel more comfortable in not accepting monies from Southern Bell, BEC or SCE&G. Those are the only three entities that I'm familiar with down in my area that I would be concerned with.
Again, we have refused certain types of advertising and other people have before, so I -- and we're really not talking about a whole lot. It's, you know -- you know, by -- they can't do an excessive amount of advertising and be responsible, so we're not talking about damaging the enterprise as a whole. And I would really be in a comfortable enough position to refuse those if ownership is kept.
Q. Thank you. Mr. Chairman?
THE CHAIRMAN: Representative Huff.
EXAMINATION BY REPRESENTATIVE HUFF:
Q. Ms. Clyburn, you sounded almost like a lawyer when you can go two different ways at the same time, but what do you perceive to be one of the most controversial topics just from your general familiarity with the PSC or issues that you've read about? What would you perceive to be the most controversial issue that the PSC may have to involve itself in, say, within the next four to five years?
A. I think this Information Highway issue that we're reading a lot about is going to be something that -- it's interesting to me from the outside looking in, from a person who is running a business who almost went to banking and finance, probably would not have a job right now, but, anyway, from a straight line business standpoint that flexibility and diversity seems exciting and I know I see that Southern Bell has filed something here.
But again I think we need to be real careful in terms of the regulatory aspect of it to make sure that there is no shifting in terms of dollars from one area that may be more either experimental or a little more risk -- less risk at first. I can't think of my word right now, but a more risk taking venture as opposed to your basic services to make sure that a holding company is possibly just kind of looking.
You'd have a holding company there and the entity that if I'm using my telephone that the cable service that might be provided does not effect the rate of my phone service. So that is going to be a big challenge and I can't speculate on what's going to happen, but there are going to be some changes made in order for local enterprises to be more competitive because it's happening everywhere else.
Q. Do you think there is going to be a lot of pressure there to -- particularly in the issues of monopolies as opposed to assuming another competitor came in that can offer the same services as the Informational Highway as we call it versus Southern Bell? I notice that you mention monopolies and oligopolies. Are you familiar at all with any of the issues that have been raised in territorial assignments and how they interplay between SCE&G and the Cooperatives of this state?
A. Oh, we had a big argument down in the low county.
Q. I thought you did. I was just curious as to --
A. I was kind of scared to go down on Bonita (phonetic) Road anyway.
Q. Yes.
A. Yeah, I'm kind of uneasy with it. There are some questions, in just kind of reviewing some of the things, you know, I learned a lot, too, about in terms of, again, what jurisdiction the PSC has and not.
There are going to be some ongoing conflicts I think as we annex -- and being from Charleston we just annexed with Daniel Island. And as cities attempt to grow and get -- expand their tax base, that's definitely going to -- and co-ops, some of the smaller entities and municipal run utilities.
There's going to be an ongoing -- it's not going to get any easier. It's going to get really ugly in terms of territory and we're just going to have to make the -- look at the consumer. That's the time we're going to have to really look at the consumer and see if it's within the parameters of the PSC to make that decision, who best can supply that service.
Q. I have no further questions, Mr. Chairman.
THE CHAIRMAN: Representative Wilkes.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Good morning, Ms. Clyburn.
A. Good morning.
Q. I'm Representative Wilkes from Fairfield County. It's nice to see you. I, too, find you very intelligent and articulate and --
A. And nervous.
Q. -- and nervous and that's understandable. You mentioned something and I would like to know maybe a little more about your philosophy. Just out of interest, you mentioned things could get ugly?
A. Yes.
Q. Could get ugly?
A. Uh-huh.
Q. And so --
A. It got ugly in Charleston.
Q. Yes, and so if you were in a position -- in a decision making position when things get ugly, would you consider yourself an emotionally driven person or a logically driven person?
A. I have been told by my -- I hate to say this -- my ex says I'm very logical. Ex-boyfriend, not husband. You know, very, very logical about being able to look at the bottom line. And I'm not saying that I don't get angry and I'm not saying that I don't empathize with persons, but I really think, you know, after you go outside and blow smoke and come back in it and look at what is the best for the consumer.
Q. Reason over emotion?
A. Right.
Q. How about urban oriented versus rural oriented?
A. There are some definite differences. I'm trying to -- can you be more specific?
Q. For instance, if you're talking about territorial disputes and you've got co-ops versus maybe a big utility or you're interested in economic development in urban areas where sometimes it's more difficult or more expensive to get infrastructure, you know, if there -- the reason I ask this question is as I have been -- as a member of the General Assembly, I have seen a division among the members from the urban areas versus the rural areas?
A. Right.
Q. Even since the last census, and I'm just wondering, are you more urban, more rural or pretty objective, you know, about --
A. I think I'm pretty objective. My mother is from Moncks Corner and that's almost urban now. And my family has roots -- farm roots in Bishopville, Camden, so I do empathize. But I think as long as there's not an duplication or an overlapping of services, I'm not sure if that's where you're getting at, and that was one of the questions down on Johns Island that, you know, there is overlapping that just does not make basic economic sense.
So I don't think I have -- we've got to weigh things because you don't want any one entity to suffer because of the other and usually some of the rural persons are a little more sensitive because they see these sprawling urban districts and things kind of remain constant in the outskirts, though some people might not see it that way. There is a need for economic diversity and a viability in the rural areas. By the same token, we need to be careful with the balance. I don't want to say --
Q. I understand.
A. -- maintain because sometimes maintain is a negative.
Q. Balance is a very good word. Thank you very much.
THE CHAIRMAN: Any other questions? Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Thank you, Mr. Chairman. Ms. Clyburn, welcome, and I want to congratulate you for having an interest in being a public servant. I want to ask you one question as it relates to the Office of the Consumer Advocate. Are you familiar with the Office of Consumer Advocate?
A. Is that Mr. Hamm?
Q. Yes.
A. Okay.
Q. How do you think that office relates to the Public Service Commission and how do you see the role of the Consumer Advocate with the individual Public Service Commission?
A. With individual Public Service Commissioners?
Q. First of all, the role of the Office of the Consumer Advocate with the Public Service Commission and second the role of the relationship of the Consumer Advocate with individual Public Service Commissioners?
A. I think that it's significant and important for there to be someone there acting as the ears and eyes of those members of the community, someone who is more tangible. A Consumer Advocate, there is no question what that means, that hopefully in an ideal sense that people would go in with their concerns, people who may be illequipped in terms of eloquent or financially go to say Mr. Ham and say, you know, we're having a problem out on Johns Island, that this ruling or what have you is adversely effecting this segment of the population, can you help us?
So there is a need to have a Consumer Advocate expounding or expressing or vocalizing the concerns of persons because even though we might be all well intentioned, no one really will positively effect everyone. Someone is going to fall through the cracks, so a consumer advocate can say, yeah, 90 percent of our population will benefit from X, but there is ten percent over here who is really suffering, so we need have an amendment or something into place.
And someone walking up the street may not -- may just complain about it and may not feel comfortable enough, you know, to articulate that, but 34Steve Hamm, who I think is an attorney, but I'm not sure, and I don't mean that as a negative, is in a position to articulate that and put that into place and put that into motion for them and come before this commission.
Now, if I understand correctly, in terms of individual -- I know he's come before the commission before. In terms of individual -- one on one relationships?
Q. Yes.
A. Is that what you mean?
Q. I think you've answered the question. I guess the second part was that you referred to that you see him more as an advocate of the people?
A. Right.
Q. And not as someone who is a colleague of the commissioners, but basically an advocate of the people?
A. I don't see him that way. That's not how I --
THE CHAIRMAN: Any further questions from the committee? Thank you, Ms. Clyburn.
A. Thank you, sir.
THE CHAIRMAN: I appreciate your offering for the candidate and I find that you've been real articulate.
A. Thank you.
THE CHAIRMAN: Answered questions well. Sorry you had to get nervous. I think you've probably got some heredity traits.
A. Being nervous. Thank you.
MR. COUICK: You're welcome to come up to the witness stand at this time. While you're standing if you will take an oath by raising your hand.
1. Ms. Mignon L. Clyburn
Home Address: Business Address:
16 Darlington Avenue 2106 Mt. Pleasant Street
Charleston, SC 29403 Charleston, SC 29403
2. She was born in Charleston, South Carolina on March 22, 1962.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *******;
S.C. Voter's Registration Number: 2544691.
4. She is single, no children.
6. She graduated from W. J. Keenan High School in 1980, and earned a B.S. in Business Administration from the University of South Carolina in 1984.
9. She was a C&S bank teller in the summers of 1979 through 1983, a page in the Lt. Governor's Office from 1982 to 1984, and worked with the Coastal Times newspaper from 1984 to present.
10. She is an associate publisher at the Coastal Times.
22. She has spent approximately $100 on telephone calls and anticipates issuing a follow-up mailing at a cost of approximately $50.
26. Professional organizations: South Carolina Association of Black Journalists, treasurer, 1992 to present; United Way Allocations Board, 1991-93; Charleston Area Arts Council, 1992-93; Board of Adjustment, Site and Design, City of Chas., 1991-93; and Black Women Entrepreneurs, president 1993 to present.
27. Civic, charitable, etc. organizations: Network of Charleston; CASES; Charleston County Young Democrats; Charleston County Coalition for Black Voter Participation; Charleston Affordable Housing; Wagener Terrace Neighborhood Assoc.; NAACP; YWCA; and Democratic Women.
29. Five letters of reference:
(a) Sandra Fowler
2415 Middle Street
Sullivan's Island, SC 29482
(803) 883-9000
(b) H. Ronald Stanley
P.O. Box 7722
Columbia, SC 29202
(803) 799-4700
(c) Daryl Milligan, Sr.
200 Meeting Street
Charleston, SC 29401
(803) 723-6867
(d) James White
500 Thurmond Mall Suite 324
Columbia, SC 29201
(803) 779-0752
(e) Henry Williams
701 East Bay Street, Suite 532
Charleston, SC 29403
(803) 577-0052
30. First District.
EUGENE NOVGORODOFF, having been duly sworn, testified as follows:
MR. NOVGORODOFF - EXAMINATION BY MR. COUICK:
Q. I had sent out a letter earlier this week that asked for you to bring evidence of your residency, a driver's license or certificate of voter registration. Did you receive that letter and if you didn't, maybe you have your driver's license with you?
A. Yes.
Q. If you could share that with Ms. Hammond. You indicate your address on your driver's license to be 9120 Delancey Circle in Charleston, South Carolina, 29418. Does that continue to be your correct address?
A. That is.
Q. Would you please state for the record your full name please?
A. Eugene Novgorodoff.
Q. Thank you. And I apologize if I tend to mispronounce it from time to time. I've suffered all my life from the same affliction you've had in terms of a name that is somewhat hard to pronounce, but I will do my best.
A. Couick is very simple.
Q. It's -- you have an interesting history in terms of your employment and your education. Would you like to share that with the committee briefly in terms of your place of birth and your employment over the years and mainly the international flavor it has.
A. Yes. I was born in transit in Harbin, Manchuria while my parents were fleeing from the Communists in -- from Moscow. They were both residents of Moscow. And they didn't appreciate the bourgeoisie, so off with their heads. Rather to have -- they were trying to preserve their heads and ran east. Many of the emigres ran west and finally -- eventually ended up in the United States. We ended up in China and particularly in Shanghai where I lived most of the time. It was my home for almost 25 years.
I was fortunate enough to have an international upbringing at the Public School for Boys which started off as a private school, but then it became a public. And in becoming public, they admitted people from many nationalities and, of course, was truly an international school. As a matter of fact, the badge that they had in the school which I wore on my hat was 12 nations, the flags of 12 nations, which was a very diverse and very interesting experience for me.
In Shanghai, I joined the Shanghai Telephone Company and served an apprenticeship there. It was very intensive. We worked around 14 or 15 hours a day for three years. And then eventually I was assigned to -- but the war broke out, the first world war. But prior to World War II breaking out, the Chinese and the Japanese had tremendous conflict in 1937 to 1939, so the city was disrupted all the time.
During that time also I joined the Shanghai Volunteers Corps which was a uniformed service to protect the city. It was a very uniquely interesting organization. In 1950 after a year's occupation by the Chinese Communists in Shanghai, I managed to be one of the first Europeans to leave the city and I lived -- I went to Japan and lived in Japan for about two years and then I migrated to Brazil where I registered for employment for being able to work as a native there. You had to have a work card before you managed to get a job. And I was fortunate enough to get a what they call a carte del trabajo (phonetic) and, which was a work permit and worked for the Brazilian telephone company which was an extremely diversified rural and broad -- broadly based education for me in the field of telecommunications.
I applied -- I was going to apply for Brazilian citizenship when a visa from the United States was made available to me and I emigrated immediately leaving my family behind in Rio De Janeiro. Anyway, I eventually got into the United States.
Q. And that was, I believe, in the late fifties; is that correct?
A. That is correct.
Q. And from that time forward -- from 1959, I believe, on, you have worked for such diversified utilities as GTE, New York Central Railroad, ITT, MITRE Company?
A. MITRE company.
Q. MITRE?
A. MITRE Corporation.
Q. Which works with fiberoptic network?
A. That's right.
Q. And with Bechtel, the large construction and engineering company?
A. That is correct.
Q. In each of those applications, you were working with telephone or data switching technology of some sort; is that correct?
A. Exactly right. We were the first -- first ones in -- in New York Central Railroad, we were the first ones to develop a quote unquote computerized data system which used what had -- what are known as floppy disks about 10,000 times the size of what they are today. They were huge monsters, but we did manage to get the first technology and the first ideas developed. And it was I think a great contribution to what followed.
I was also with General Electric where we developed the first satellite earth stations. It was to overcome the lack of broad bank communications for interorganization communication.
Q. In working with those companies, you are now retired from all employment with private corporations; is that correct?
A. That is correct.
Q. Do you receive any type of pension from any of those companies?
A. No. Oh, except the Ticrip (phonetic). I receive a pension from Ticrip which I obtained during my employment with the MITRE Corporation.
Q. And the MITRE Corporation is the one that works with fiberoptic networking and other developmental digitized switching; is that correct?
A. Right.
Q. And they are not a regulated utility company? They are not a public utility that supplies gas or electricity?
A. No.
Q. Do you own any utility stocks?
A. Only in General Electric.
Q. Do you own any public utility stocks that are -- offer services to consumers in South Carolina? SCE&G, Duke Power?
A. No.
Q. CP&L?
A. No.
Q. If you had to name one or two important issues before the Public Service Commission at this time or you would feel would be important, what would those be?
A. Well, one of the issues I think are an old credo that I sort of grew into and that is to provide the consumer. After all, you're providing a service.
You've got to serve the consumer and the Public Utilities (sic) Commission usually tries to improve the goal of providing the best service at the least cost to the consumer and I think that's a very -- in my opinion, a very important credo to follow.
We are serving the public and I think that if we follow this concept, we can't go far wrong.
Q. What other topic or goal would you have if you were to serve on the Public Service Commission? What other problems would you address?
A. Well, health issues like the supply of water and a good clean supply of water. When I lived in -- when I lived in China, I worked for a year with the Public Works Department which sort of ran the roads and sewer pipes and the -- and the sewer plants and the water distribution and we had quite an experience in providing this water to the public and -- but at a very, very low cost.
But I was trying to think of the term as accurately as I could. That the purpose of the service was to provide good water to the public at a very, very low cost.
Q. Mr. Chairman, for the benefit of the committee, we have done a check of -- with SLED and it was negative. There were no entries. In addition, your credit report would have no negative entries. It was positive.
What other things occupy your time now, Mr. Novgorodoff, that would prevent you from devoting your time to the Public Service Commission? Are there any limitations on your time availability?
A. No, I have no -- none except that I help my wife grow roses whenever I have the free time, but I do read a lot and I keep up -- I try to keep up to date with what's going on.
Q. So if we have a bad case of mites or something like that, that would be the only thing that would keep you from coming to Columbia?
A. That's right.
Q. You have heard or have -- we have asked other persons applying or being candidates a little bit about the activities of the Public Service Commission in trying to determine your level of familiarity with their operations. As a -- before I ask that question, is it fair for me to summarize your past experience with utilities or with companies that you worked with to being one of design and engineering?
A. Yes, mostly.
Q. And you have not been involved on the side that would work with the accounting aspects, with the management of the rate base, those types of activities?
A. Well, with GTE, I did go into the rate base and how costs are formed, how costs are sort of dreamed up, how to finance would take place, what charges would be equitable in applying the rates.
In other words, if you're going to charge a customer for a service, it's got to be based on something. And the -- that something is the cost of producing that service and I did go into that very extensively with GTE.
Q. Was that a regulated utility at the time?
A. GTE, yes.
Q. And who regulated? What -- was it a state regulator and what state were you located in?
A. That was in -- in Iowa and it was the State Regulatory Commission. But we had more problems with AT&T and the cost sharing than we did with --
Q. You mentioned earlier the role of the PSC should certainly be geared toward public service or service of the consuming public. There are a number of areas where there is tension between a fair rate of return to the industry and the needs of the public for reasonable inexpensive service.
There is also a tension between the environmental clean up movement to some degree and the ability of a company to make a profit. Generally how do you approach those decisions? How would you balance the needs of the public versus a utility to make a profit and the desires of folks to ensure there is a clean environment and the need to make power available in an inexpensive -- at an inexpensive price?
A. That's a rather extensive question and --
Q. What is your thought process? How do you analyze those things and --
A. Well, the cost of production, first of all, what it -- what it costs to produce the power, get the equipment on-line, how much does it cost to maintain the service and to distribute it to the public. I think this is the cost basis on which you can manage the operation and profits of the company's operation.
Q. If I could stop you at that point, in determining that cost base, that fee base or rate base, have you ever seen an occasion where a utility or a company has one side of its operations that are regulated, its profit and perhaps other ventures under its corporate shell that are unregulated, how would you ensure that you did not allow those folks to put the cost of the nonregulated portion of the corporation in the rate base for the regulated part or would that be appropriate to do that?
A. Yeah, I think it would be because you have the unregulated portions of the service would be cost control while the others would allow a profit margin that's greater than the usual 8 or 10 or 12 percent than the regulated industry would have.
Q. What role should the staff of the Public Service Commission play generally, vis-a-vis, your role as a commissioner?
A. Well, most importantly, of course, is to gather the appropriate information. The -- and to -- for that information to be absolutely correct. It is very difficult especially in telecommunications where a manufacturing of -- manufacturer of the latest technology is determined.
After you have determined what the technology is and cost it out, you should be able to be in a fairly good position to argue the merits of what the rate should be. But basically it should be based on the costs of providing that service.
There is also, I might add, at the present time the Information Superhighway and like everybody else, I've been scratching my head on that one. How would it work? But if a supplier who now has a service to a consumer, you can't duplicate it in a public -- in other words, you can't bring in two water systems to your home as a competing entity. You can't have two different distributors of information on two different lines to a household although that is being done at the present time.
If you get strictly on one service like telephones, if you get two competing companies providing in that -- in the consumer's premises that makes it difficult to reduce the rates of the service.
In other words, the building, the equipment, the lines and everything costs money, if another competing company has to do the same thing, then naturally one side or the other has to lose. And if -- it's difficult. It's one of the big problems that solve themselves and you can't sit down and try to figure out.
Q. Thank you. One last question, is there anything that would -- you plan to fully serve out your term if elected to the Public Service Commission?
A. Yes.
Q. Mr. Chairman.
THE CHAIRMAN: Any question from any member of the committee? Representative Huff.
EXAMINATION BY REPRESENTATIVE HUFF:
Q. I don't even presume to try to pronounce your name.
A. Oh, give it a try.
Q. Can I call you Eugene?
A. Yes, but give it a try. It's not that difficult.
Q. Novgorodoff?
A. Terrific. You're doing well.
Q. I may have been mistaken, did I hear you say that there should be an opportunity for the unregulated portion of particular industry, should it exist, to pass those costs into the regulated portion?
A. Oh, no. No. I didn't mean that at all.
Q. Well, I wanted to make that --
A. The regulated portion should be regulated.
The unregulated portion should -- I mean
unless the laws require it to be put under
regulation, I don't think we should regulate
without having the appropriate laws to put in the
restriction.
You've got to abide by whatever is the law.
Q. Right. That was my only question. I wasn't quite clear.
THE CHAIRMAN: Any other members? Senator Courtney.
EXAMINATION BY SENATOR COURTNEY:
Q. Mr. Novgorodoff, I want to follow up with the questions Mr. Couick asked you.
You have a background sheet here and as I was looking at it, it shows your experience and so forth through 1949 and then it skips from '49 to '59. I noticed you married in '49. I don't know if it that had anything to do with it.
But could you tell us what you were doing from 1949 until 1959?
A. Oh, I was in -- I left China in 1950 and traveled -- in my nervousness, I may have left out that I went to Thailand for a little while and went to Japan. I lived in Japan for a couple of years, then migrated to Brazil where I worked for the Brazilian telephone company principally. And that's where I tried to introduce the title of telecommunications engineer into the -- into the vocabulary and --
Q. So did you live in Brazil until '59?
A. That is correct.
Q. How long have you lived in the Charleston area?
A. Seven years. I came to Charleston in 19 -- in December 1987 and my wife and later on our children came to visit and they fell in love with the area. We were happy to make the move.
Q. That was your first time being in South Carolina also?
A. That is correct.
Q. You show that you worked, I believe, until 1981 and did a small job in 1990 including installation of a local telephone there?
A. That is correct.
Q. But other than that, have you been retired since 1981?
A. Yes. I haven't been able to find suitable work, but I've been kept busy.
Q. Mr. Novgorodoff, you ran for City Council in North Charleston, I believe?
A. That is correct.
Q. Do you have any opinion about the regulations of the municipal -- of utilities that are owned by municipalities and their ability to compete with private utilities?
A. Well, I haven't really thought very much about those, but they should be covered by whatever regulations that the law imposes on them, yes. I'm still debating whether they should be unregulated. But you do provide a facility and probably it's just as well to have them regulated. You can argue both ways on the question.
Q. Thank you, sir.
THE CHAIRMAN: Sir, I would ask you one question. How many languages do you speak?
A. Well, to start off with in Shanghai, I spoke Chinese in the streets about two different dialects.
THE CHAIRMAN: I know that.
A. Russian at home and English and French in school. And I speak Portuguese.
THE CHAIRMAN: Five languages?
A. And Russian. Yeah, five languages.
THE CHAIRMAN: You could understand that crowd if you ever get up there.
A. Well, you know, mother is -- mother is --
THE CHAIRMAN: Sir?
A. Mother is -- I mean, necessity is the mother of invention. And also when it's necessary for you to accomplish something, you certainly get off your seat and try to do something.
I remember very distinctly when I came to Brazil, everybody on the ship was studying their little travel books on Portuguese. What I did was try to get to speak to a few people out in the streets. I knew a little French and that helped out a great deal and within the first week, I got to not only speak, but write Brazilian quite -- quite well.
THE CHAIRMAN: Do you speak any Japanese?
A. I beg your pardon?
THE CHAIRMAN: Do you speak any Japanese?
A. No, I didn't -- I never -- I had a prejudice against the Japanese, I'm afraid, because during World War I when I was a Shanghai, they occupied the city and I've seen some very, very cruel things that they did to the people.
And for many, many years I was so very aggravated with the Japanese, but, you know, time passes and people keep on living and -- and you have to forget, to put these things behind you, but the only reason -- my youngest son speaks fluent Japanese, but I was a little aggravated with them and I just didn't care to learn the language.
THE CHAIRMAN: You tried --
A. I wish I did. I wish I hadn't taken that attitude.
THE CHAIRMAN: Thank you so much.
REPRESENTATIVE HUFF: Mr. Chairman, I would submit he would certainly be able to understand lawyers then that come before the PSC.
A. Yes.
REPRESENTATIVE HUFF: They speak a different language, sir.
A. Yes. It's -- it's going to be a very challenging job. I think the future of the telecommunications as well as the distribution of power is going be a very, very difficult problem with the state to solve. There are -- I -- reading the newspapers, I see that in spite of that fact that utility power companies have boundaries, they still come around and steal the other guy's industrial consumers. And, I mean, is that allowed?
RE-EXAMINATION BY REPRESENTATIVE HUFF:
Q. Mr. Novgorodoff --
A. Novgorodoff.
Q. I think your background is very interesting. I wouldn't mind having dinner with you one evening, but I've got two -- I've got an aunt and an uncle who are in Moscow now as missionaries and our daughter is going over there in the --
A. That's terrific.
Q. -- spring, but in light of what you just said, it is somewhat of a difficult issue sitting as a commissioner to deal with those exceptions particularly when you have certain loads that allow the regulated industries then to compete with each other notwithstanding that fact that they have been territorially assigned to certain areas and then layered upon that are certain corridor rights as well. And I was just curious what your thought process might be to dispose of the differences that might arise as a result of that.
A. Well, I think that the thought process has to develop as we grow into these things, you know, in the time to come. You have to develop and see what is the best for the people, really. What serves the people and act accordingly. It will be a process of development.
THE CHAIRMAN: Thank you so much, Mr. Novgorodoff.
A. You're quite welcome, sir.
THE CHAIRMAN: Thank you.
A. And I was very happy to be here.
THE CHAIRMAN: We're going to try to make one more candidate before lunch.
MR. COUICK: And while you're standing if I could administer the oath to you. Please raise your right hand.
1. Eugene Novgorodoff
Home Address: Business Address:
9120 DeLancey Circle 9120 DeLancey Circle
North Charleston, SC 29406 North Charleston, SC 29406
2. He was born in Harbin, Manchuria on January 6, 1919.
Social Security Number: ***-**-****.
3. South Carolina Driver's License Number: *********.
South Carolina Voter Registration Number: 4 608 707.
4. He was married to Ellen (ne' Chan) Novgorodoff on July 14, 1949. He has two children: Bernard David Novgorodoff, age 45 (Manager of Marketing Research, MILES in Ellchart, IN) and Samuel J. Novgorodoff, age 38 (Technical Managing Editor SONY, Columbia Records in New York).
5. Military Service: He volunteered for service in 1958 but was restricted due to immigrant status and age. He served 4 years with the Shanghai Volunteer Corps (Signals) under the command of the Shanghai Municipal Council (1937-1941). This was a uniformed, armed, military corps organized to protect the city.
6. He attended the Public School for Boys in Shanghai, China from 1924 to 1936 and St. John's University in Shai, China in 1937. He did not complete his degree due to the war situation and family difficulties. He received 3 years of technical and management training with the Shanghai Telephone Company from 1941 to 1944, and has attended various telecommunications and business management seminars and courses, including: the Advanced Telephone Traffic Engineering Conference at Michigan State University (1969); the Internal Management Training Development Program at New York Central System; the Department of the Navy Ship Managers 3-M Course (1975); Western Union's Principles of Supervisory Management Program (1970); and the Dale Carnegie Course in Effective Speaking and Human Relations (1967).
8. In 1991, he was a candidate for the North Charleston City Council, District 8 seat.
9. Through his work for the Shanghai Power Co., a New York based corporation, he attended seminars and took a short course dealing with the costs and management of electric power production using fossil fuel (i.e. coal) for steam-driven generators.
In 1939, he worked for the Public Works Department of the Shanghai Municipal Council in the areas of field engineering; potable water filtering and distribution systems; road construction; and the budgeting and cost control of materials and labor in the construction of the city's first modern sewerage disposal plant.
From 1941 to 1945, he worked for the Shanghai Telephone Company, an ITT subsidiary. This was a 3-year apprenticeship dealing with the engineering, manufacture, installation, and operation of complete telephone switching systems, including wire transmission facilities. He also worked with capital costs, revenues, the formulation of rates, and tariffs of all service categories.
From 1945 to 1949, he worked at the U.S. Naval Port facilities in Shanghai, China. This work involved the installation and maintenance of teleprinter and radio systems; spectrum assignments; and coded data transmissions for the U.S. Naval HQ operations in Shanghai.
From 1959 to 1963, he worked for General Telephone & Electronics, Inc. in Grinnell, Iowa, in the areas of traffic engineering and toll separations for a 3-state area. From 1963 to 1967, he worked for the New York Central Railroad, where he developed and implemented the first nationwide "computerized" data switching center for train information exchange between stations. This technology replaced teleprinters.
From 1967 to 1969, he worked for ITT World Communications, Inc. in New York, where he planned, installed, calculated, and forecast quantities of transmission facilities between the United States and other countries. He also determined the costs of materials, tariffs, and usage fees for the operation of data and voice links via radio and sea cables. This work involved the evaluation of the first satellite systems.
From 1971 to 1973, he worked for MITRE Corp. in Bedford, MA. This work involved the specification and development of the first digitized switching and transmission systems and fiber optic networks (short and long haul). He also developed new concepts and applications for voice, facsimile, and inter-active TV.
From 1979 to 1981, he worked for Bechtel, Inc., on the construction of a Jubail (industrial) city in KSA. This involved the first applications of "digitized" and "computerized" telephone exchanges (e.g. CIT Alcutels B-10 and LME's, AXE-10, and MOTOROLA's cellular telephone networks). His work included specification, bidding, and performance evaluations.
19. In 1990, he worked for the U.S. Agency for International Development, where he supervised AT&T International's installation of a local telephone exchange at Egerton University in Njoro, Kenya. He was also employed by TransAmerica Energy Associates in Atlanta, Georgia.
27. Civic, charitable, etc. organizations: He is a member of the Massachusetts Shanghai Lodge (masonic).
30. Five letters of reference:
(a) Mr. John H. "Duck" Neal
9106 Lafayette Court
Charleston, SC 29406
(803) 764-2930
(b) Mr. Henry M. Proveaux
8830 Salamander Road
North Charleston, SC 29406
(803) 553-5690
(c) Mr. Ralph R. Wetherell
1043 Loyalist Lane
Mt. Pleasant, SC 29464
(803) 884-2610
(d) Mr. Roger M. Young
2179 Ashley Phosphate Road
North Charleston, SC 29406
(803) 572-5566
(e) John E. Bourne
4930 Rivers Avenue
North Charleston, SC 29419
(803) 747-7570
30. He is seeking the position of Public Service Commissioner for the First District.
FURMAN M. REYNOLDS, III, having been duly sworn, testified as follows:
MR. REYNOLDS - EXAMINATION BY MR. REYNOLDS:
Q. If would you share with Ms. Hammond, your driver's license or your voter registration certificate. When ya'll send these wallet, the State paper thinks ya'll are sending money up here.
Mr. Reynolds, your address is listed on your voter registration certificate as 113 Ashley Hill Drive in the city of Goose Creek, South Carolina, 29445. Does that continue to be your address?
A. It does.
Q. Thank you. Would you please state for the record your full name, Mr. Reynolds?
A. Furman Manley Reynolds, III.
Q. Thank you. You received a copy of your Personal Data Questionnaire Summary when you came in this morning and you had an opportunity, I believe, to review it. Were there any corrections that you wish made to that before we enter it into the public part of this record?
A. No. It's correct.
Q. Thank you. Would you briefly for the committee's benefit state what prompted your interest in serving on the Public Service Commission?
A. I've been in public service since the early seventies. I know a great deal about it and I thought I could be of service to the state.
Q. You have served in a number of capacities working with municipal utilities over the years. In fact, at the current time, you are employed I believe it is by the town of Mount Pleasant. Is there a commissioner? Is that it or --
A. No, sir. I'm a Director of Public Service for the town of Mount Pleasant. That's an appointed employee.
Q. What utilities do they offer in the town of Mount Pleasant?
A. The utilities are offered under the -- Mount Pleasant is the water and sewer, it's separate. It comes under the laws of the CPL (phonetic).
Q. And those are not subject to regulation by the Public Service Commission; is that correct?
A. No, sir.
Q. So you've not had occasion to either practice or appear as a witness or whatever before the Public Service Commission of this state?
A. No, sir. That is correct.
Q. Do you own any utility stock, Mr. Reynolds?
A. No, sir.
Q. Does your wife own any utility stock?
A. None.
Q. You list your children, but you did not list on your PDQ their employers. They were of such age, I was not sure whether they were employed by anyone or not. Your son Furman, the IV and it might have been your daughter, I believe, Cheri Galloway, age 21. Are they
employed?
A. My son is in the Army and the daughter is a student.
Q. Okay. What would you consider to be the one or two hot problems or topics or concerns that are confronting the Public Service Commission today, Mr. Reynolds?
A. Maintain an equitable rate system and within that system make sure it's fair to both parties, i.e., consumer and the provider.
Q. And what would be another topic perhaps that would be of concern to you or you think should be of concern to the PSC?
A. As a representative for the State of South Carolina, I would think to provide an adequate and needed service on a continual basis to the citizenry.
Q. Would you have any other employment if you were elected to the Public Service Commission?
A. I'm in the Army Reserves.
Q. In terms of your employment with the Town of Mount Pleasant, what would be your intention with that?
A. If elected, I would go to the mayor and recommend -- and, of course, let her know that this has occurred and what would her -- what would be her feelings about it. And I should imagine that she would have none.
Q. What will your feelings be, though? I mean would -- are you going to continue to serve in that capacity as well?
A. Yes, sir.
Q. Would you see any possibility for any type of conflict of interest in that -- in those dual roles?
A. No, sir.
Q. You are aware of the Consumer Advocate in South Carolina. From time to time, he appears before the commission. What is the role of the Consumer Advocate and what is your role, vis-a-vis, the Consumer Advocate? How should you cooperate?
A. I'm not aware of the role of the Consumer Advocate. I can't speak to it.
Q. Are you familiar with the concept of wheeling?
A. I'm sorry.
Q. Wheeling, w-h-e-e-l-i-n-g?
A. No.
Q. Wheeling? How about lata, L-a-t-a?
A. No, sir.
Q. How about rate base?
A. It would be the rate that the consumer pays for the service.
Q. The rate base would be the rate the consumer would pay for the service. What types of utilities does the Public Services Commission regulate, Mr. Reynolds?
A. Private utilities, electrical, water and sewer and if that occurred, things having to do with open road trucking, telephones.
Q. How about the concept of generational mix for environmental purposes?
A. I'm sorry. Say that again.
Q. Generational mix of fuels for environmental purposes, are you familiar with that?
A. No, sir.
Q. From time to time, there is a trade off to be made in the role of the Public Service Commission between representing the public's interest and the interest of the industry which needs to make a profit. How would you approach those questions?
A. I'm always more interested in the public.
Q. At what point does it become a problem in terms of rate making from a constitutional standpoint or from a legal standpoint to overemphasize the public's interest versus an industry interest?
A. I would say wherein overregulations would diminish the community's ability, one, to have the service and, two, the possibility of destroying that service capabilities.
Q. And that would be destroyed because of?
A. Economics destruction.
Q. Failure to make a profit?
A. Yes, sir.
Q. If you had to pick a type of hat that a Public Service Commissioner wears, would it be more likely to be that of a public relations person, more likely to be that of a traffic cop, more likely to be that of a judge or more likely that it be of an agency official. Which of those hats would you see yourself wearing most often from time to time?
A. Probably the latter two, the judge and the agency official.
Q. What is the role of the PSC staff, vis-a-vis, the role of the commission? What will you be looking for them -- from them? What should they provide to you? What role should they have?
A. Guidance and history relative to whatever subject is afoot at the moment. At the present.
Q. Mr. Chairman, for the benefit of the record, your staff has checked the appropriate reports from SLED and credit agencies, all were negative in the sense that they have no entries noted there.
Are you aware of any activity that would limit your service -- current activity on your part that would limit your service on the Public Service Commission in the sense of -- as I said, we talked about stocks. I want to talk about your employment, is there anything else that would cause you to have to recuse yourself from time to time?
A. No, sir.
Q. Mr. Reynolds, do you have recommendations for improving this screening process that you are only part of the way through, but you don't -- you're a good bit of the initial phrase, what recommendations would you have for improvement?
A. None.
Q. Mr. Chairman.
REPRESENTATIVE WILKES: Thank you, Mr. Couick. Do any members of the screening committee have questions for Mr. Reynolds?
SENATOR COURTNEY: Mr. Chairman.
REPRESENTATIVE WILKES: Yes, Senator Courtney.
EXAMINATION BY SENATOR COURTNEY:
Q. Mr. Chairman. Mr. Reynolds, you're the Public Services
-- Director of Public Services for --
A. For the town of Mount Pleasant.
Q. What are your duties there?
A. We administer the services of garbage trash collections, streets and drainage, building and grounds and street maintenance, that sort of thing.
Q. Does it have anything to do with the water and sewer system there?
A. No, sir.
Q. You mentioned earlier in a question from Mr. Couick that you did not feel that you would have any conflict of interest working for the city and also working as a commissioner?
A. No, sir.
Q. Are you aware that there are situations where municipalities provide water and sewer to the areas outside of the town perimeter?
A. No, sir.
Q. And they would be in competition with private utility companies?
A. There are some communities that have their own water system and a private contractor provides a similar system in nearby outlying areas.
Q. Does your town --
A. Did I describe that correctly?
Q. Well, does your town own the sewer and water system there?
A. The -- are you familiar with the Public Service Commission situation, the town does not. What the town does is they sign a general obligation bond that the Public Service Commission has let to get the money to operate. I function as an employee of the town. It does not intersect that at all.
Q. Do any of the general funds from the municipality go toward keeping or maintaining the water and sewer system?
A. No, sir.
Q. Should a private utility company before you as a commissioner seeking a rate increase, so that they could expand services maybe to an area that is targeted by a municipal system, wouldn't you see that as a potential conflict of interest maybe as to whether or not to grant that increase to provide competition?
A. No, sir. And the reason for that is, again, what I do daily as an employee of the town, I do not get involved in anything.
Q. Some --
A. Frankly, if I may finish, I don't even hear of it.
Q. Are the commissioners of your utility company there, are they any of the town council members?
A. No, sir.
REPRESENTATIVE WILKES: Representative Huff.
EXAMINATION BY REPRESENTATIVE HUFF:
Q. Mr. Reynolds, what utility provides electric service to the municipality that you work for?
A. Two. Primarily it's SCE&G and the secondary one is Berkeley Electric Co-op.
Q. And I would assume that that municipality has a franchise with that particular city, do they not?
A. I'm sure that's the way it operates.
Q. Do you not perceive a problem if you retain your position as an employee with the city and any conflicts that may arise with regard to the franchise or the granting of franchises or the dealing with a cooperative should that city annex into a cooperatively assigned territory?
A. No, sir, for the same reasons I mentioned to this, I just don't deal with them.
Q. But what I'm saying in your role as a Public Service commissioner, certainly you may have, maybe not an opportunity, but maybe a situation arise where the interest of the municipality may be adverse to that of a competitive utility, vis-a-vis, SCE&G and the co-ops, would you not feel that because of your retained position as an employee of that municipality that you could run afoul of a conflict in passing upon any questions that might arise between the cooperative's interest and the utility's interest?
A. It's important to -- in the mayor-council form of government that we have in Mount Pleasant, the council handles those issues directly. Employees of the town, we never -- frankly never hear about it.
Q. But if you're paid by the city and the city has a franchise with SCE&G, don't you think that might give a perception that you're predisposed --
A. It may.
Q. -- to find in the interest of the --
A. It may, but in the actual working of things, that's reaching out a long way to make the connection.
Q. Do you think that the appearance of a conflict may be as important as an actual conflict as the credibility of the PSC may be at issue?
A. The appearance of conflict is an important issue, yes, sir.
Q. And would you not believe that because of an appearance, it might be inappropriate for you to vote in that -- notwithstanding that fact that there may not be a direct conflict, but because there is an appearance of a conflict that you should not vote in that situation should you be on the PSC?
A. I'm not sure how to answer that.
Q. Well, do you think that there must be a direct conflict of interest that would prevent you from voting whereas if there is only an appearance you would not find that to be significant enough not to vote as well? In other words, do you find those to be equal in the importance than -- that an appearance is as equally as important as a direct conflict?
A. I do agree with that.
Q. And if there was an appearance, what would you do? While you examined the situation and certainly found that legally there was no conflict, but there was an appearance of a conflict, what would you perceive your position to be in that situation?
A. Well, where that situation developed, I would abstain.
Q. And understanding that if you retained your role as an employee of a city which subsequently could be involved in that type of situation, do you think it might be a better choice to not be an employee as opposed to retain the employee role and then work on the PSC as well?
A. I would prefer not to do that. I would prefer to stay in the job in the Town of Mount Pleasant also.
Q. If the choice was to have one or the other, which would you keep?
A. The Town of Mount Pleasant.
Q. All right, sir.
REPRESENTATIVE WILKES: Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Thank you. Mr. Reynolds, who do you answer to as the Director of Public Services for the Town of Mount Pleasant?
A. The Town Administrator.
Q. The Town Administrator. In your Public Service Commission, your local Public Service Commission, how are they chosen?
A. They are elected by their own organization. The commissioners of the water and sewer section in the town of Mount Pleasant, it's important to know these are two separate entities all together, not to be identified or associated with each other.
Q. Who decides on the franchise for the town of Mount Pleasant SCE&G or electric co-op? Who would make that decision?
A. Council.
Q. The council?
A. Yes. Elect the commission.
Q. And the council hires the Town Administrator?
A. Yeah.
Q. Who -- you then report to the Town Administrator?
A. Yes.
Q. So do you see that as an apparent conflict if you reported to a town administrator who is hired by the council, that council makes decisions on the services of a utility company that you may regulate?
A. I see where you're heading. That's reaching three or four levels away and -- I see what you're saying, but the answer is no, I do not see that. It would not occur.
Q. Okay. Thank you, sir.
REPRESENTATIVE WILKES: Are there any other questions from the screening committee? Yes, sir.
EXAMINATION BY MR. BILTON:
Q. Mr. Reynolds, why are you apply for this position versus what you're doing now?
A. I've always been interested in the Public Service Commission and what they do in that, and to answer Mr. Couick's first question, I've done this so very long, the Public Service, that I believe I can be of help to the State of South Carolina by serving on the commission.
Q. Did you -- did I understand you wrong that if you -- if there was a choice to be made between the two that you would remain where you are?
A. I'd remain with the town with the Mount Pleasant, yes, sir.
Q. So this is more or less a plus for you in your opinion?
A. Yes, sir.
Q. Thank you.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. Reynolds, is your job with the town of Mount Pleasant a full time position?
A. Yes.
Q. Are you aware that the Public Service Commission often meets two to three days a week?
A. Yes, sir.
Q. So how would you reconcile two full time jobs, so to speak, in one?
A. What I would do in that case is just not accept the pay of the town of Mount Pleasant for the time that I'm dealing with the PSC.
Q. So who would assume your duties --
A. My deputy.
Q. -- in the town of Mount Pleasant while you're here?
A. My deputy.
REPRESENTATIVE WILKES: Thank you. Are there any other questions from the committee? Thank you, Mr. Reynolds, you're excused.
A. All right.
1. Mr. Furman M. Reynolds
Home Address: Business Address:
113 Ashley Hill Dr. Town of Mt. Pleasant
Goose Creek, SC 29445 P.O. Box 745
Mt. Pleasant, SC 29464
2. He was born in Charleston, South Carolina on March 24, 1943.
Social Security number: ***-**-****.
3. S.C. Driver's License Number: *********.
S.C. Voter's Registration Number: 4 478 242.
4. He was married to Thelma Elizabeth Reynolds on July 7, 1979. He has two children: Furman M. Reynolds, IV, age 22; Cherie R. Galloway, age 21.
5. Military Service: US Army Active Reserve, Major, from 1961 to present.
6. He attended The Citadel from 1971 to 1973 and from 1979 to 1981, business management; University of Louisville from 1974 to 1979, business management.
9. He was a tool designer for Lockheed Aircraft Company from 1963 to 1974; Plant Supervisor for Metropolitan Sewer District from 1974 to 1979, Louisville, Kentucky; Superintendent of the Seabrook Island Company from 1979 to 1985, (utility corporation); Superintendent of Summerville Water Systems from 1985 to 1990; Director of Public Services, Mt. Pleasant, SC, from 1990 to present.
26. Professional organizations: Water Pollution Control Federation; Water Pollution Control Association of SC; American Wastewater Association; Reserve Officer's Association.
29. Five letters of reference:
(a) Mr. Hardy
First Federal Bank of Charleston
P.O. Box 10968
North Charleston, SC 29411-9984
(803) 863-9852
(b) Mr. Dennis Harmon
City Administrator, Goose Creek, SC
City of Goose Creek
125 St. James Ave.
Goose Creek, SC 29445
(803) 797-6220
(c) Mr. Emory Mack
108 N. Norfolk
Goose Creek, SC 29445
(803) 572-6719
(d) Van D. Hipp, Jr., Esquire
2138 Ashley Phosphate Road
Suite 201
North Charleston, NC 29406
(803) 764-2474
(e) John A. Skorupski, Jr.
S.C. State Ports Authority
Post Office Box 817
Charleston, SC 29402-0817
(803) 723-8651
30. First District
THE CHAIRMAN: I suggest we go to lunch at 1:00 o'clock and come back at 2:30? Any questions? 2:00? See you back at 2:00. Meeting adjourned.
(A lunch break was taken)
THE CHAIRMAN: I would call the meeting to order. Mr. Couick.
MR. COUICK: Mr. Chairman, our next candidate is Mr. William Saunders. I believe you go by Mr. Bill Saunders, is that right, Mr. Saunders?
A. Yes.
Q. While you're coming forward, I'm going to ask Ms. Hammond to come around and get either your voter registration certificate or your driver's license from you.
Mr. Saunders, while you're standing if you could raise your right hand and take the oath, if you will.
WILLIAM SAUNDERS, having been duly sworn, testified as follows:
MR. SAUNDERS - EXAMINATION BY MR. COUICK:
Q. Mr. Saunders, is it correct that your address -- your current address is 6191 Chisholm Road? It looks like PO Box 36, Johns Island, South Carolina?
A. Yes.
Q. 29455. Johns Island is in Charleston County; is that correct?
A. Right.
Q. You live in the Charleston County rather than the Colleton County part?
A. Right.
Q. Would you please state for the record your full name, Mr. Saunders?
A. William Saunders.
Q. Mr. Saunders, counsel for the committee has several questions that relate to some research done on your -- with credit agencies and also with SLED regarding some noncriminal matters, it would be my request at this time that the committee go into Executive Session to protect your privacy at this point with the option of coming out very soon.
THE CHAIRMAN: The Chairman to entertain a motion?
SENATOR COURTNEY: Mr. Chairman, I would move.
REPRESENTATIVE WILKES: Move.
THE CHAIRMAN: Move into Executive Session. Any objection to Executive Session? Executive Session.
(Executive Session)
MR. COUICK: Mr. Chairman, I've just discussed with Mr. Saunders that what you want to do is go back into Public Session now, have the general interview based on some other questions about his qualifications, but one issue that you want to address is the credit reports and the judgment. He understands that that will happen. I believe you indicated your assent to that?
A. Yes.
THE CHAIRMAN: And also in regards to the letter?
MR. COUICK: Yes, sir, with regard to the letter. Yes, sir.
CONTINUED EXAMINATION BY MR. COUICK:
Q. Mr. Chairman, back in Open Session, Mr. Saunders, you had been previously sworn. I'd like to ask you some questions about your understanding of the operation of the Public Service Commission. Could you please tell the committee very briefly why you would like to serve on the Public Service Commission as a commissioner?
A. Well, I think that my background in broadcasting and being a part of an industry that I saw that -- that was not -- was a regulated industry for a long time and was deregulated. And I was almost destroyed with some of the small broadcasters that I see the possibility of some of these things happening as it relates to regulation or the power industry being deregulated and I think that I have some expertise in that.
I've got a good background to working with people and my history is pretty good in that area and I know a lot about what goes on.
Q. What major topics or major problems or concerns are being confronted by the Public Service Commission or should be confronted by the Public Service Commission? If you had to list one or two areas that you would be concerned about, what would they be?
A. Again, I guess the area of making sure that everything continued to run smoothly and being able to make sure that we have a harmonious state as it relates to the utility companies and telephone company.
Q. What role should the Public Service Commission staff play in the deliberations, Mr. Saunders?
A. I think that the commissioners have to make the final decision, but I think the staff has to play a role in the deliberations.
Q. Mr. Saunders, if you had to pick the kind of hat that you think that you would most often wear as a public service commissioner, would it be the hat of a traffic cop, the hat of an agency director, the hat of a judge or the hat of a public relations person? Which hat do you think you would most be often called to wear?
A. Okay, even if I could add another one to it, I believe also as a mediator sometimes. People that's going to look at some of those things that are going to effect people that already have made some decision of being able to bring them together and have -- have them to make the right decision that's going to be best for the state.
Q. Which one of those hats would you wear most often, do you believe in your day to day work at the commission?
A. I think making some judgements or decisions.
Q. Serving as a judge?
A. Yes.
Q. If that be the case and you were called upon to make decisions particularly about rates that place you deciding something that may effect the public and on the other hand effecting a company which in the free enterprise system needs to make a profit to survive, how are you going to make those judgments? What's going to be your thought process as you go about doing that?
A. Well, we would have to look at both sides. The company has to be able to survive to continue to provide service and we -- the people they serve would have to have -- be able to afford the power or whatever. So we have to look at both sides.
Q. What utilities does the Public Service Commission regulate?
A. The power companies, electricity, the railroad, the water, the telephone, the transportation and that's about it.
Q. Are you familiar with the concept of wheeling, w-h-e-e-l-i-n-g, at all, Mr. Saunders?
A. No, I'm not.
Q. How about the name lata, l-a-t-a? Are you familiar with what lata is?
A. No. Huh-uh.
Q. How about the concept of generational mix --
A. (Witness shakes head in the negative).
Q. -- of fuels?
A. (Witness shakes head in the negative).
Q. Should the Public Service Commission take an active role in making South Carolina's environment cleaner?
A. When you say active, how do you mean that?
Q. Well, I guess I'm asking you if you were going to do it, how active could you be?
A. I don't know. I think that the commission could -- could really be involved in helping the -- the companies that they are dealing with to help them to do a better job that some have been doing and also dealing with -- even with the consumer.
Q. Mr. Saunders, you are a father of ten children, I believe; is that correct?
A. Yes.
Q. And you have significant business obligations, I believe, in terms -- you continue to serve as president of WPAL in Charleston; is that correct?
A. (Witness nods in the affirmative).
Q. What are your plans for your business and family interests and how that would impact on your service on the Public Service Commission?
A. My children are all grown. The youngest one is 24, so they're basically on their own except when they boomerang back home every now and then.
As it relates to my business, I got people that was in my business that runs my business. The young lady that is my station manager and vice president has been with the station longer than I have, so I don't have a problem. My thing in my business is still the decision maker.
Q. How much time would you anticipate spending in -- in your position as a Public Service Commissioner on a weekly basis?
A. I don't know that. I would assume that it would take at least five days or more to, at least, get started with it.
Q. You had indicated on your form that you were an unsuccessful candidate for the State Senate, I believe, in 1980?
A. Yes.
Q. And that you were defeated in the General Election; is that correct?
A. Uh-huh.
Q. Have you pursued elected office since then?
A. No. I was -- at that particular time, we ran At Large and when you lose, you basically lose by yourself. It took me ten years to pay off the debt that I incurred.
Q. Mr. Saunders, what is Gresham Communications?
A. That's just another broadcast communication company that I own.
Q. And what type of work or type of broadcast does it have? Is it -- if WPAL is an AM station providing radio broadcasts, what does Gresham provide?
A. Right now, we're putting on FM.
Q. So this is the getting it off the ground? This is the company getting FM off the ground?
A. Yeah, but I've had it for about a year.
Q. Do you have partners in your business with WPAL or Gresham?
A. Communications?
Q. Do you have -- either one of those, are you in partnership or do other folks own stock in either of those two companies?
A. Yeah, people own stock.
Q. Are any of those other investors actively involved in the utility business?
A. No.
Q. Or are any of those six shareholders municipalities or Public Service Districts?
A. Ask that one again.
Q. Do any of the shareholders -- of the other shareholders in those two companies, are any of them actively involved in the management of a utility company or are any of them owned by a public entity which would be a city or a public service district?
A. No.
Q. Do you own any utility stocks?
A. No.
Q. Does your wife own any utility stock?
A. No.
Q. I believe you mentioned from time to time children boomerang back into your household. Is there anyone living with you in your household that owns utility stock?
A. No.
Q. Mr. Chairman, we had -- as with all candidates asked SLED to assist us in a search of criminal and civil records and also asked for a credit report. We have received a report back both from SLED and from Equifax Credit Information Services.
Mr. Saunders, I had asked you earlier in Executive Session if you had any objection to sharing this information with the committee in public session. I ask you once again, do you have any objection to sharing and discussing that information --
A. No.
Q. -- credit report? And indicating that he agrees to that.
Mr. Chairman, the first matter that came to the attention committee counsel was a confession of judgment dated June 2nd, 1993 from Mr. Saunders to a Mr. John H. Pembroke.
Mr. Saunders, I understand from listening to you briefly that Mr. Pembroke was a shareholder with you in the corporation that ran WPAL; is that correct?
A. Yes.
Q. And that you had a Buy Out Agreement whereby he took your note for payment of his interest, so you were buying his interest. And there was a disagreement as to how much you owed him, but because of some record keeping problems on both of your parts, I believe that you said, but that you had signed this confession of judgment this past June in the amount of $40,000; is that correct?
A. Right.
Q. Has that judgment been paid?
A. No, it has not. We're working on an acceptable agreement between me and him to pay it off. That's --
Q. Was suit brought by Mr. Pembroke before you entered into this confession of judgement?
A. Yeah.
Q. It was brought on the note -- the promissory note that you signed for him in December, 1983?
A. '85, I think.
Q. But he brought suit in order to collect the funds; is that correct?
A. Right, after the disagreement on how much it was supposed to be, but we paid him over $200,000 which was the original loan.
Q. And the monies have not been paid, but you're continuing to try to work that out?
A. Right.
Q. Mr. Saunders, you have a report as we all do pretty much with Equifax Credit Reporting Service, your file has been active since 1975 by their information here. They indicate that you live on Johns Island, that your social security -- the social security number as I gave to you earlier is the same social security number indicated here. I don't care to report it and have it reported in the journal, but you agree that was your social security number?
A. Yeah.
Q. The employment that they indicated here, it was clear to you that they had the right person that they were reporting on; is that correct?
A. Yes.
Q. The entries that were of note and that we had discussed very briefly in Executive Session was an installment loan as indicated by the report with NationsBank. I believe you indicated -- excuse me, an installment loan relationship with GMAC that you indicate was actually a lease arrangement for a car?
A. Yes.
Q. The entry on the GMAC is what is categorized as an I-9. The code on the report says that would be an installment loan and that that 9 number would indicate that it was written off as a bad debt by GMAC. Could you please tell the committee your understanding of where you ended up in your relationship with GMAC on that lease?
A. Okay. Since 1980, we leased cars from the local Oldsmobile dealer in Charleston. And in 1988 when we leased a new Oldsmobile, our payments paid up because normally with those lease agreements your first and your last payment are paid up front, so you're not even supposed to have a payment in the end. So when you turn the car in, I should not even have had a payment at that particular point.
I know nothing about that particular payment, one payment of $349, until 1993 when we checked with the credit record and we tried get them to give us their record on it and they had nothing on it. But we went on and paid them $349 and they gave us a letter clearing that up. We have that record.
Q. Mr. Saunders, if you could --
A. And, again, I would like to also make sure that that car was leased to WPAL, Incorporated.
Q. Mr. Saunders, I had asked you earlier if you had personal guarantied that payment in some way and if you could provide documentation of how that came to be perhaps erroneously entered on your credit record or show that it was a corporate debt, I would appreciate it on the committee's behalf, you supplying that.
Additionally, there is an entry here for South Carolina National Bank for an installment loan which was more or less indicated also to be an open account. That the original loan amount was $80,000. The amount currently due on that account is $54,000. I believe that's their indication here as reported in February, 1992.
The rating given to that relationship is an O-9. O indicating that it was an open account. The 9 being once again that it was written off as bad debt. Are you familiar with that loan?
A. Yes, that's a loan again with WPAL, Incorporated.
Q. Are you aware of any type of collection proceedings brought by SCNB to recover those amounts from you?
A. We're still paying SCN a large note that SCN carried a bank note on our -- on our station at this point.
Q. Are they trying to collect on the $54,000?
A. It will be added to the back end of our note.
Q. So that was the agreement for the refinancing was for you to pick up that indebtedness?
A. Uh-huh.
Q. Could you provide evidence of that to the committee?
A. Okay.
Q. Mr. Saunders, you had at my request provided a copy of a letter that you had mailed out on October 10th, 1993. I'll be glad to provide you with a copy of it. Do you recall this letter, Mr. Saunders?
A. Yes.
Q. Is that your signature there?
A. Yes, sir.
Q. There are some attachments attached to that letter, two pages and I believe labeled "A Synopsis of Resume."
A. Yes, sir.
Q. Was that an attachment you included with the letter?
A. Yes, sir.
Q. Did you draft this letter, Mr. Saunders?
A. Yes, sir. Along with a couple of my daughters.
Q. If you wouldn't mind, I would like to read at least a portion of the letter into the record and include the letter in its entirety later. "Dear" -- and I take this letter was sent to members of the General Assembly; is that correct?
A. And some other people.
Q. "This letter is my formal request to solicit your support for the Public Service Commissioner's position that became available due to the retirement of Marjorie Amos-Frazier." How many members of the General Assembly was this letter forwarded to, Mr. Saunders?
A. 170.
Q. So this letter went to all 170 members of the General Assembly?
A. Yes.
Q. Have you had any correspondence back from any members of the General Assembly?
A. Probably about eight or ten.
Q. In that correspondence, what did it tend to say?
A. It said -- one of them would say to me that after the screening committee, come and see me. One would said to me that we need to make sure that you're doing -- talking to your delegation and make sure that you learn such and such a thing. And I got the kind of support because that's what I think support means and that's what everybody respond back to me.
Q. Did anybody offer a pledge of support in terms of voting for you?
A. No, sir. Everybody talked about after the screening.
Q. Were you aware of provisions in the law that prohibit you from asking for a pledge of support prior to your being screened at the time that you wrote this letter?
A. Okay. You're changes words on me now and I was thinking about pledging of a vote.
Q. But I guess what I'm stating is the law. The law says that no candidate shall seek a pledge of vote from any member of the General Assembly prior to a screening report being issued?
A. Right. And --
Q. Were you aware that the law said that at the time that you sent this letter?
A. No, sir, I was not.
Q. So what was your intention, your intention at the time you sent the letter? What were you seeking from individuals that you mailed it to?
A. I was seeking, number one, for people to know me, who I was and also to give me feedback in terms of kind of things that I should -- could or should be about doing as it relates to the Public Service Commission and things that would be beneficial to me after the screening.
Q. Mr. Saunders, when you -- at least as counsel reads the letter, he attaches some importance to the word -- use of the word "formal.". Why is the word "formal" modifying the word "request" there? What was your intention to use that word?
A. I have no -- I didn't -- I did not put any -- anything on that word. Again, my daughter used that word. I'm not that up with English that it makes that much difference to me.
Q. When you use the word "formal," what does that mean?
A. Formal like formal clothing or formal things likes that, I don't --
Q. Formal in the sense that it's not something that's casual or something that you're likely to change your mind on, is that it?
A. I would buy that, too. One of the -- one of my concerns is still -- it still would have been a concern of mine is that even the timing of the article in the paper run this morning. The timing was just unbelievable.
And there were so many times, I knew some of the things that was happening and there were people saying in this -- especially in this city that I had dropped out of the race all the time and that I wanted to make sure that everybody understood that I was in and that I was going to be in until you guys to decide here today whether I'm going to be in or not.
Q. And the word "support," would you please explain one more time what support you were seeking from -- you said you sent it to 170 members of the General Assembly and to other individuals. What other individuals did you mail this to?
A. Well, I mailed it to some other people that I know that have been involved in the -- in the political arena and that know things about what's going on. I sent it to Lieutenant Governor Nick Theodore. And the kind of support that I was looking for, the Lieutenant Governor called me back and said, "Bill, you know, you have to make sure" -- one of the questions that he raised with me, he said that if you're going to go after this office, you're going to have to spend a lot of time in Columbia, you're going to have to do certain things with your business. That's the kind of feedback and that's the kind of thing that I call support.
Q. What other types of support did you seek? I mean if it were not just somebody that you -- was it more than just getting folks to call you back and say, "I think you're a good man and I think you ought to run?" Were you looking for financial support at all in your race?
A. Not financial support, but I was also looking for negative feedback in terms of, well, I don't think that you're going to be able to make it. I'd like somebody to wrote back or call me back and say you need to know about, make sure that you're looking at who all is going to be in the race, how you're going to come to vote after this screening and those kind of things. That's the kind of education that I need.
Q. Did you say that of all the letters that you received back from members of the General Assembly, no one offered a pledge of their vote?
A. No, sir.
Q. Would you mind sharing those letters, responses back? Have you saved those, Mr. Saunders?
A. I think I did.
Q. Would you share those letters back with the committee? You're welcome to -- or forward it to me. Mr. Saunders, now that you've gone through a good bit of the process, are there any recommendations you have for improving the screening process for election of candidates to the Public Service Commission?
A. I don't know, sir. I guess that there is nothing you can change. I think the people that have been more involved in things are going to have to be scrutinized more and I think that there is no way that you can change that kind of process.
Q. And those people being incumbent commissioners you're talking about?
A. Not just them. Anybody that has been around a long time and been involved a long time, you've been involved, so you might make a lot of friends, but you also made enemies. You also have made mistakes and those kinds of things shows up and I'm hoping that there is a way that you can weigh those kind of things that -- against people that are coming in for the first time that have never done anything at all, so they got a beautiful clean slate, but somebody that's been involved for 35 years will not have that clean slate.
We've made some bad mistakes and -- but also have done some good and I'm hoping that the screening committee at least have an -- at least take a look when this is over at how do you do to ensure that people -- everybody is getting a fair shake and those kinds of things.
Q. Is there anything that you would recommend that would give -- have given you a fairer shake in this process?
A. That would give me a fair shake?
Q. Have given you a fairer shake in this process today?
A. Well, I -- you know, the jury is still out on that. I don't know. But I just -- for the future, that's what I would be concerned about, how these things work because I think that they -- it seems to be the mood in our country today that anybody that has been semi successful or been near doing good are being criticized by everybody.
I watched Admiral Inman and a lot of other people are getting out of the process simply because of all of the negatives. If something is negative, you want it. If it's positive, you don't want it.
Q. Is there anything else that you would like to share with the committee in terms of that you've not been allowed to share in terms of qualifications?
A. No. Thank you for having me.
Q. Thank you. Mr. Chairman, I have no further questions.
REPRESENTATIVE WILKES: Are there any questions of the candidate by the committee? Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Thank you, Mr. Chairman. Mr. Saunders, I want to commend you for being willing to become a public servant and to spend your time serving the citizens of South Carolina. Let me ask you a question as it relates to the letter.
Is it your opinion or is it your belief that this letter served as a formal notification to legislators as well as friends that you are or that your plans are or were at that time to enter this race, so it was a formal notification as opposed to a letter asking for a committed vote?
A. Yes, that's what -- that's what it was. That was -- I'm not asking for a vote at that particular point. I try not to ask anybody for anything unless I -- but what they going to do? And most of the people -- understand the people don't know me, that I want to make sure that they know me before I got to that, so I would have need to have met them face to face before I asked for a vote.
Q. So the word formal was probably more in line of formally saying that you plan to be a candidate for this position considering the fact that you said earlier that there was talk of you not being a candidate in this?
A. Yes, sir.
Q. Okay. Thank you.
SENATOR COURTNEY: Mr. Chairman?
REPRESENTATIVE WILKES: Yes.
EXAMINATION BY SENATOR COURTNEY:
Q. Mr. Saunders, I want to thank you for being willing to answer questions that I know have to be embarrassing to you. It's certainly not easy to ask some of these questions, but you have been involved in the political process over the years it appears.
I think you ran for the State Senate in 1980. And in that you went into a primary race and a run off and then ran in the general election, I believe. And I understand somebody makes mistakes and especially pertaining to the ethics law. Even a lot of legislators, they still don't know exactly how it applies to them and I certainly respect someone who is willing to say that they made a mistake because they didn't understand the law.
My problem is with the letter asking for support and not knowing what support means and you being a former candidate and so forth, I would assume that in a political race or in your political race, when you asked for support, you were asking for votes, aren't you?
A. No. When we just asked for support, we're just basically asking for money or being able to be willing to work in campaign, to help, to ask for -- we used to have a saying one time, we could never prove that you're going to vote for me. Even when you go into the booth, I don't know you're going to vote for me, but if you support me then you help me to do certain things. It had nothing to do with votes.
Q. I can understand that, but I think the law reads more or less that not only can you not seek support, and I use support meaning a pledge or a vote, or even a third party directly or indirectly to seek any support or pledge for you also. And you have some difficulties with your definition of support.
I think you said earlier that you meant feedback when you said support in your letter, but no where in your letter do you ask anyone to call you and advise you about any procedures for you to use, what you should do toward helping to obtain this hearing and like that and just using the words -- or the word "solicit your support" twice in the letter. And, again, you still stand on it that you didn't simply make a mistake and that actually you thought you could go ahead and ask for a pledge, so to speak, at the time that you wrote the letter?
A. No. What you're saying to me and somebody else has said that our definition of what I felt within myself and still feel, I don't mind going on and saying that it was wrong, if you feel that it was wrong.
I did not feel that it was and I didn't do it with the only intent for it to be wrong and that's -- that's the key thing to me. It had no intention of doing anything against the law and I don't want to do that. I have not been in the habit of doing that and I will not do that. That was not my intent.
Q. I believe that and I'm -- that's what I'm trying to ask, were you really just confused as to what the law was at the time and maybe were seeking pledges and you just simply made a mistake because you didn't understand the law?
Are you still saying that by asking for support, you weren't asking -- actually asking for pledges?
A. I was not asking for votes, but I did not understand that. I didn't even know the law in the beginning, but still when I went back and read -- I don't want to get into an argument about the definition because people seem to have different definitions for what it is and what -- I come from a part of the country that we even speak a different language altogether. Something called Gullah (phonetic).
There is a lot of times when I go do something, I go and put a word up on the board and when I say this word this is what it means and I guess I don't mind even accepting that as a mistake that I should not have done it in that form. I don't have a problem with that.
But the only thing that I would have a problem with anybody saying oh, he was feeling that I had some devious method of doing something devious in mind because that was not my intention.
Q. Yes, sir, and I say I believe that. Mr. Saunders, let me ask you, you said that the debts of -- mostly were debts of your company, WPAL?
A. Yes.
Q. Aren't you the owner, president and general manager of WPAL?
A. Yes.
Q. Are you the person responsible for maintaining the books and paying the debts of WPAL?
A. Yes, sir.
Q. And you have been since 1981, I believe?
A. Not until 1985, '86.
Q. Asking you again about your political involvement, have you been involved in any political campaigns? There is nothing wrong with that, but political campaigns in the last four or six years as far as donating to any candidates, to present members of the General Assembly or helping in their campaigns?
A. No, I haven't.
Q. That's all I have, Mr. Chairman.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. If I may, I'm going to maybe try to expound a little bit back to the letter again, and, admittedly there are vagaries in the law and in the English language as well.
In reading directly from the statute, Section 813-930, it does not mention the word support. It says, "No candidate for an office elected by the General Assembly may seek directly the pledge of the member of the General Assembly's vote until the qualifications of all the candidates of the office have been determined appropriate by the review committee."
The word"formal" to me in this letter is more of a mitigating word than it is a condemning word in that I like Senator Jackson, it -- initially feel like this is a formal announcement of my candidacy and I -- and you don't say directly seeking anyone's vote.
If it was not your intent to ask for a vote, then I certainly can accept that that was what was in your mind. Making -- also making you aware that this is very close to a request for a vote, but I will say not necessarily a request for a vote.
Would you tell us, would it be fair to say that this was more your formal announcement of your candidacy and you're asking for people to help you in any way that they can without regard to votes or anything else, but just support? In other words, could I support your candidacy without pledging my vote? I think I could probably do that. I could say, yes, I support your right to be a candidate without telling you that I'm going to give you a vote. So if this letter were directed to me and I received it in that vein, would I be on the same wavelength with you?
A. Yes, sir. You know, I've done -- well, petitioned candidates, for instance, in order to run, they need a signature. I'll support by signing his petition, but I'm not going to vote for this -- for that person but he has the right to have a petition. That's the kind of thing that I meant. It was a formal candidacy for me. That's what I meant.
Q. All right, sir. May I ask you a few questions again about the debts, specific questions. There was a mention of an IRS lien that was filed against WPAL, Incorporated. Was that for income taxes due or was that for payroll trust withholding payroll taxes?
A. It was payroll tax.
Q. Payroll taxes. But you did subsequently settle that?
A. Yes.
Q. Are there any outstanding debts to the Internal Revenue Service from WPAL at the present time?
A. Yes, sir.
Q. Or to the South Carolina Tax Commission?
A. There are some.
Q. Can you explain to us?
A. I don't know how -- it's nothing -- there is nothing big outstanding, but there are some that are owed to the IRS and the State tax.
Q. Would that also be in the payroll trust withholding area?
A. Yes, sir.
Q. Is WPAL, Incorporated solvent now? Is it making its debt service and making its payroll?
A. It is making it. It is not making a profit at this time. An AM station -- and again, I alluded to the deregulation and that some of the problems that came along with that. It is not doing that well, but it has
-- we have enough assets to cover anything like that.
We have 33 acres of property, prime waterfront property that goes around WPAL, Incorporated and some other things there that we could liquidate if we had to, so we are in a pretty solvent position in that area.
We're looking at some of that -- the other thing that's important to us right now is the FM station and the combination of the two stations.
Q. If you were to be elected to the Public Service Commission, Mr. Saunders, what would your continuing relationship be with WPAL, Inc.?
A. How do you mean that, sir?
Q. Would you continue to retain your ownership? Will you --
A. Yeah.
Q. I guess the point I'm trying to make or the question I'm trying to ask, would it be such a distraction to you given the financial difficulties and maybe the struggle that you now have with the company, would it be a distraction to you if you were to become a member of this Public Service Commission?
A. Not at all, sir. And I gave that a lot of thought before I got involved in this. That would not be a distraction at all.
Q. So would these debts, then would they settle themselves? I mean it seems that if you are the chief executive officer and the general manager of the station, then you have a fiduciary responsibility to that corporation to make sure that its function is continued to be carried out, that its debts are paid and its payroll is made and its taxes are paid. So are you going to make sure that all of those things are done and taken care of prior to your election as a commissioner or will it continue to be something that will nag at you or require your attention or is there someone else that could step into your shoes and take that responsibility?
A. Well, there is some -- and I mentioned a little bit earlier, there is lady there that's been in that position longer than myself. And also we would bring in somebody else, but most important part of this whole thing with the radio business is sales, which I don't do.
And changing our sales to an FM station and bringing a couple more people and that would be someone bringing in the money. That's something I would like to keep on doing, but it would not be a problem for me at all, sir. It's --
REPRESENTATIVE WILKES: Is there anything else? Does anyone have a question for this candidate? Mr. Couick.
RE-EXAMINATION BY MR. COUICK:
Q. Mr. Chairman, one follow up. And I'm sorry, I misunderstood a comment earlier about the IRS lien and would ask more about it. The $26,976 lien that was established in May, 1991 and recently verified by the credit reporting agency in April of last year, what is the annual payroll of WPAL?
A. I think it's about 230,000 or something like that.
Q. So the payroll taxes are approximately $27,000, which I'm sure includes some interest and penalties. What period of time does that represent nonpayment of payroll taxes?
A. That one from -- you're talking about probably two quarters or something like that.
Q. And the two quarters would be sometime prior to May,
'91. Do you recall the time?
A. That was before '90. It really was the time going back when we started having problem with the Hugo. But Hugo is when we really end up in a pretty bad situation.
We were the only station on the air after Hugo. Business just went to hell after that because there were no people to advertise, so it was back during that particular time that we weren't able --
Q. And one final question, Mr. Saunders, do you receive advertising from public utilities? Does SCE&G or Southern Bell or anything like that advertise with you?
A. Yes. SCE&G advertises sometimes. Southern Bell, sometimes. And those advertisements, again, does not come directly to us. Southern Bell, for instance, have an ad agency that come out of New York or out of Atlanta. SCE&G comes from some place else. There are salespersons that handles those things.
Q. Would there be -- would you consider it would be a conflict of interest if you were serving on the Public Service Commission and, I take it, the largest shareholder of WPAL as president, as a compensated officer, receiving advertising dollars from regulated utilities?
A. No, sir.
Q. How about if -- how much does Southern Bell, for instance, spend now on advertising a year with WPAL?
A. They used to spend probably about three to $4,000 a year.
Q. If that -- if you were elected tomorrow and come July, you took your seat and that shot up to be $50,000 a year, would that cause you any concern?
A. Yes, sir.
Q. What do you think is your role to make sure that there is no conflict?
A. That is something that we could not accept. You're talking about something changing like that, that would not be accepted. We just would not accept that financial --
Q. Would that be something that you feel like would be necessary to report on your financial interest statement that sort of thing?
A. Well, however the reporting system is, that would be reported. But we would not even accept that. I would make that a part of my station policy.
Q. Thank you, Mr. Chairman.
SENATOR JACKSON: Mr. Chairman?
RE-EXAMINATION BY SENATOR JACKSON:
Q. Mr. Saunders, let me follow up with what counsel just asked you here. In fact, if you run into a problem as a commissioner with the utility company that's regulated by the commission, would you be willing to give up the advertising dollars that that utility company is putting into your radio station to avoid the appearance of a conflict of interest?
A. Yes.
Q. So you would be willing to it give up?
REPRESENTATIVE WILKES: Are there any other questions from the committee? Ms. Hatton.
EXAMINATION BY DOCTOR HATTON:
Q. I came in a little late, but I would like to know from all of these involvements, sir, what consultative advice you might seek to assist you in your role as a commissioner if you were elected?
It seems to me that there have been matters of interpretation and compliance with regulations that have been problems over a period of time. What consultative advise might you seek and from whom to assist you in playing the proper role as a commissioner if you were elected?
A. At this point, ma'am, I don't know. I would -- I'm assuming that there are people that is already set up to do those kinds of things. Again, that's the kind of supportive role that I'm looking for that somebody -- and listen in the State Carolina to help commissioners do those kinds of things.
REPRESENTATIVE WILKES: Thank you. Are there any further questions for the candidate? If not, Mr. Saunders, thank you so much for your time and you may be excused.
A. Thank you.
1. William "Bill" Saunders
Home Address: Business Address:
P.O. Box 36 1717 Wappoo Road or
Johns Island, SC 29455 P.O. Box 30999
Charleston, SC 29407
or 29417
2. He was born in New York on February 14, 1935.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *********.
S.C. Voter Registration Number: 0 195 448.
4. He married Henrietta J. Saunders in March, 1968. He has 10 children: William Reginald Saunders, Jr., age 38 (Lt. Colonel and Air Force Pilot); Sharon L. Saunders, age 37 (Account Executive, WPAL, Inc.); Loretta J. Saunders, age 36 (Teacher, James Island High School); Kathleen Saunders Green, age 35 (Teacher, Summerville Elementary); Alphea Saunders Adams, age 31 (Teacher, Happy Times); Clinton J. Saunders, age 26 (Student and Pinkerton Security Guard); Gary Saunders, age 33 (Student in Japan); Byron Saunders, age 35 (Army Captain); Myra Saunders Perez, age 31 (Chemical Technician, Albright & Wilson); Tamara Saunders, age 23 (Student and Receptionist, WPAL, Inc.).
5. Military Service: He served in the Korean War as an Army Staff Sergeant (1951-1954). He was honorably discharged.
Serial #: 14402936.
6. He graduated from Laing High School (Mount Pleasant, SC) in 1956; completed a Medical Ethics course at the College of Charleston in Summer, 1973; studied Business Management Training at Southeastern Business College (Charleston, SC) in 1974; and studied Vocational Education through Southern Illinois University's Charleston Extension from 1977 to 1978.
7. He has worked with the following public boards/offices: Office of Economic Opportunity (1966-1970); South Carolina State Human Affairs Commission (1971-1979); Governor's Commission on Emergency Preparedness (1990); Victim Assistance Advisory (1987-present); and the Charleston County Board of Assessment (1990-present).
8. In 1980, he was a Democratic candidate for the South Carolina State Senate, in an at-large race representing Charleston and Georgetown counties. He won the primary and run-off elections but was defeated in the General Election.
9. He worked as a foreman for Weils Mattress Factory from 1956 to 1975 and in Community Relations for Brothers Broadcasting with WPAL, WXVI, & WWWZ from 1971 to 1980. He has worked with the Committee on Better Racial Assurance (COBRA), a human service agency, since 1971 and is the agency's current Executive Director.
10. He has been the President/General Manager of WPAL, Inc. since 1980 and has been the President/General Manager of Gresham Communications, WPAL-FM since 1993.
13. A tax lien procedure relating to his position as President of WPAL, Inc. was instituted by the Internal Revenue Service.
14. He was sued by his former partners in a suit involving WPAL, Inc.
26. Professional organizations: President, South Carolina Broadcasters Association (Member, 1981-present); Trident Chamber of Commerce (1979-present); and President, Rotary International Breakfast Club (Member, 1983-present).
27. Civic, charitable, etc. organizations: Trident Technical College Foundation (1983-present); Charleston Southern University Board of Visitors (1990-present); President, Charleston YMCA (1991); Cities in Schools (1989-present); University of South Carolina Partnership (1990-present); Poverty and Deprivation Advisory Board (1990-present); Spoleto Festival Board of Directors (1990-present); Trident Urban League (1993); Blue Ridge Institute for Southern Executives (1973-present); Lay Speaker/Sunday School, Superintendent for Wesley United Methodist Church on Johns Island.
28. He believes that his work as president and general manager of a broadcasting business that has survived deregulation by the federal government, his political exposure, business affiliations, and human service involvements have given him the skills and experience needed to render him qualified for the position of Public Service Commissioner.
29. Five letters of reference:
(a) Mrs. Marjorie Amos-Frazier
361 Ashley Avenue
Charleston, SC 29403
(803) 723-0054
(b) Mr. Montez C. Martin, Jr.
176 Peachtree Street on the Ashley River
Charleston, SC 29403
(803) 722-1942
(c) Mr. John B. Holloway, Jr.
Senior Vice-President, South Carolina National Bank
P.O. Box 700
Charleston, SC 29402
(803) 724-5018
(d) Mr. David L. Rawle
2 Beaufain Street
P.O. Box 1117
Charleston, SC 29402-1117
(803) 577-7327
(e) Mr. Hugh C. Lane, Jr.
President, The Bank of South Carolina
P.O. Box 538
Charleston, SC 29402
(803) 724-1500
30. He is seeking the position of Public Service Commissioner for the First District.
REPRESENTATIVE WILKES: Our next candidate screening is Mr. Charles E. Schuster.
MR. COUICK: He's on his way down. Mr. Chairman, would you like to take a five-minute a break?
REPRESENTATIVE WILKES: We'll stand in recess for five minutes.
(A short break was taken)
REPRESENTATIVE WILKES: We call ourselves back into order. Mr. Couick.
MR. COUICK: Thank you. Mr. Chairman, the next candidate is Mr. Charles E. Schuster. Mr. Schuster, if you would please stand and take the oath.
CHARLES E. SCHUSTER, having been duly sworn, testified as follows:
MR. SCHUSTER - EXAMINATION BY MR. COUICK:
Q. Have you already shared your driver's license with Ms. Hammond or do you have that, Mr. Schuster?
A. I have it.
Q. Mr. Chairman, I have a South Carolina driver's license indicating an address of 27 North Basilica Avenue in Hanahan, South Carolina, 29406. The same address is indicated on the voter's registration information card.
Mr. Schuster, Hanahan is in Berkeley County; is that correct?
A. That's correct, sir.
Q. That is south of Moncks Corner, I guess towards Charleston by some, what, 10, 15 miles?
A. It's exactly 13 miles south of Moncks Corner. The sort of area where I live is -- you got the Seaboard Coastal Railroad tracks and it's Hanahan and then you've got Charleston County right next to it and I live about 12 miles from Northwoods Mall. So it's in the Northwoods area, but it's in Berkeley County.
Q. So prior to 1990 or 1992, when you voted for congressional candidates, you voted in the First Congressional District?
A. That's correct, sir.
Q. Thank you. Mr. Schuster, if you would please state for the record your full name.
A. Charles Edward Schuster.
Q. And as we said you live in Hanahan, South Carolina?
A. That's correct.
Q. And you're currently employed, I believe, with the South Carolina Department of Agriculture?
A. That's correct, sir.
Q. Could you briefly describe your duties with the department?
A. Yes. I'm in the laboratory division of the South Carolina Department of Agriculture and I'm responsible for enforcing the ten -- ten laws that are South Carolina laws pertaining to food protection, sir.
Q. What types of food protection laws do you enforce?
A. The Food and Cosmetic Act of 1972, the Richland Act of 1962, the -- let's see, we have the Egg Grading Act of -- I'm not sure exactly what year.
Q. So you would tend to inspect at the wholesale level or do you inspect --
A. Yes. Yes, wholesale manufacturers and warehouse in southeast.
Q. So you're not an inspector of grocery stores and that sort of thing?
A. Well, the -- yes, sir, the only time I get involved with grocery stores is when we have consumer complaints and we have a problem, I'll go out to the grocery store. The Weights and Measures Division of our agency primarily inspects grocery stores.
Q. You have been employed at the department since 1974, I believe?
A. That's right.
Q. If you were to be elected to the South Carolina Public Service Commission, what would be your intention as to your employment with the department?
A. Well, since the Public Service Commission is a, I understand, a full time job, I would have to resign, sir.
Q. Mr. Schuster, do you own any utility stock?
A. No, sir, I don't.
Q. Does anyone in your household including your wife own any utility stock?
A. No, sir. My mother, I think, has stocks in -- I think it's 1500 shares in SCANA Corporation.
Q. And she does not live with you?
A. No, sir, she doesn't.
Q. Your wife, I believe, is Ms. Karen Schuster; is that correct?
A. That's correct, sir.
Q. And where is she employed?
A. She's employed at Santee Cooper.
Q. What are her responsibilities there, sir?
A. She's a drafter and she's drafts and designs electrical substations for Santee Cooper.
Q. Do you understand that Santee Cooper is a wholesaler to some degree of electrical power in this state?
A. Yes, sir. They sell -- yes, I do.
Q. Who do they tend to sell power to?
A. Mostly to the -- the 15 electric co-ops in the state. They also sell to people like Georgetown -- the city of Georgetown and they do sell some of it to South Carolina Electric and Gas and also Carolina -- Carolina Power and Light. The primary customers is 15 electric co-ops of South Carolina.
Q. And what are her responsibilities with Santee Cooper, did you say?
A. She -- she is in the Design Section and she designs electrical substations.
Q. She has no responsibilities as it relates to the buying or selling of wholesale electricity?
A. No, sir. No, she does not.
Q. Are there any other relationships or ownership interests in property or stocks that you feel would be appropriate to disclose to this committee that could at least raise the question or the inference of perhaps a conflict of interest?
A. No, sir. I would say that in 1902, my grandfather helped build the Reading River Electrical plant, but he died in 1931, so I --
Q. The statute of limitations has run out.
A. Yes, sir.
Q. What prompted your interest in serving on the commission?
A. Well, first off, I feel like I'd do an excellent job. That was my primary interest. I thought that I'm qualified and my work I deal with a lot with companies who, of course, use the utilities and I see their problems and I feel that my insight -- I could better understand and do a better job as a commissioner.
Q. What type of hat do you think you would typically wear on the job as a Public Service commissioner? Would you be a traffic cop, a public relations expert, a judge or an agency director in terms of personnel director? What hat would you typically wear as a PSC commissioner?
A. I think as a judge quite frankly because we -- as a commissioner you sit just like you are and the different clients or firms being regulated come before you, so I would say being a judge would be primarily my responsibility and the hat that I would wear.
Q. What does public service on the Public Service Commission to mean to you? I mean when you sit there as judge, what's your obligation to the public versus your obligation to the public utilities that appear before you?
A. Well, the first thing is that the -- we, the South Carolinians, want good reliable service from the companies that are being regulated and to do that, there has to be -- companies have to be, let's say, profitable. Let's say they have to know -- have people work there who know what they're doing and carry out their responsibilities. If -- like up in -- our friends up north right now, say, in Washington, DC, they have no electricity and they had to shut down the US government.
Obviously, something went wrong in their utility regulatory program, the same exact with New Jersey and Pennsylvania. So to really have good service, I think it's tantamount, the first responsibility of the Public Service Commission.
Q. What topics do you consider to be the most important at the PSC right now? Where do you think are some cutting edge problems that are going to confront --
A. Well, first and foremost is we must be competitive in doing business in the State of South Carolina. We must be competitive with other states and other nations if businesses are to come here and those that are here are to stay here, so that's the number one consideration.
If we become no longer competitive and the Public Service Commission does have a great deal of response and responsibility in this area, then, you know, businesses will not grow, will not stay here and in the long run every one, utilities and the public, will be at a disadvantage.
Q. Santee Cooper offers a range of rates to various utility customers that use it, whether it be the electric co-ops whether it be a company like Valu-max (phonetic) or whether it be the residential consumer that may buy directly in that area. Is it appropriate for a utility regulated by the PSC to offer a broad band of rates in order to be more competitive to attract industry in South Carolina?
A. Well, let's just take Valu-max, that's 900 people who are working in the area right near where I live at and those employees in the area that enable people to come here, increase the payroll, I think, two million dollars a year. And if it hadn't been for that special rate, that 50 million dollar a year payroll would not be here in the area where I live.
And there has been many spin-off jobs. It's sort of a gut-wrenching decision making process to give industry a special rate. And I don't think it should be given. It has to be given with the idea to some surgical precision, but if we don't do that, then we don't have employment and then we're all going to be worse off. So I feel that, yes, it should be based on job creation and specific requirements, but I think it is something that needs to -- it should be done.
Q. Do you recognize the term generational mix as it relates to fuel sources?
A. Yes, that'd be like nuclear power, coal, oil, fire boilers, hydroelectric.
Q. What -- how would that impact environmentally? How would you -- and what role would you see the PSC taking in those areas in terms of requiring or encouraging certain generational mixes?
A. Nuclear power has a -- and the only problem with nuclear power, quite frankly, is the fact what are you going to do with the disposal of the waste. Of course, presently, it's coming to Barnwell County, South Carolina.
But beyond that situation and the thought maybe the threat of a nuclear accident, it is an excellent source of power and when things -- when the power demand goes down, for instance, SCE&G runs -- they shut everything else down, they keep running the Duke Sumner nuclear plant.
Q. Mr. Schuster, speaking a little more generically rather than trying to identify what's clean power and what's not, I guess my question I would like to focus on is it appropriate where something may be more expensive, but a cleaner burn to opt for the more expensive, cleaner approach to generation of power as opposed to the most -- to the least expensive generation of power, to mandate that as a Public Service commissioner?
A. Well, I think quite frankly in that situation, we at the PSC should touch base with the health departments, the environmental quality control and work together and really just make a decision.
If they feel that is an air pollution problem, then you -- the power that we have over the utilities, tell them, you know, yes, we're going to have to go to this, but we also know it is going to cost more and ultimately the rates will go up.
But I don't think the PSC should be legislating by itself air quality control standards. I think they need to really talk especially to people who really know what they're doing which would be the environmental section of DHEC.
Q. Are you aware that the Public Service Commission has environmental authority when it comes to the siting decisions as it relates to new plants?
A. No, I did not know that.
Q. A couple of short questions, are you familiar with the concept of wheeling as it relates to the wholesale distribution of power?
A. No, I don't.
Q. What other types of utilities does the PSC regulate other than electricity generated power?
A. Well, you have private water systems, private waste water systems, we have, of course, natural gas. You have transportation, highway and railroad. It also regulates, of course, the safety aspects of truck driving in this state.
Q. Thank you. And I don't believe that I've mentioned yet for the committee's benefit, Mr. Schuster, that your credit reports and SLED reports were positive in that there were no negative entries. I wanted to be sure that was on the record.
Then, finally, would you have any recommendations for this committee as it would relate to the screening process itself to improve it?
A. Well, it seems like it was a little longer like, for instance, we first met and then you had to decide whether or not on whether to have all of the candidates or not, maybe get that resolved. But you need have a thorough process, you know, in doing this for the candidates.
Like I said, I -- in the letter I sent you speaks for what I feel about what the Public Service Commission stands for. I guess all the members got that, so that's really -- you know, you have a really -- a very important responsibility and I appreciate your consideration. And I think you have a lot of candidates here. You have a tough job ahead of you.
Q. Thank you. Thank you, Mr. Chairman.
REPRESENTATIVE WILKES: Would any of the screening committee members like to ask questions of the candidate?
SENATOR COURTNEY: Mr. Chairman?
REPRESENTATIVE WILKES: Senator Courtney.
EXAMINATION BY SENATOR COURTNEY:
Q. Mr. Schuster, I just want to ask you a couple of things. I notice in your summary that you submitted -- that you also have been involved in the political process before in running for public office?
A. Yes, sir.
Q. And I just want to ask you if you have in the last four to six years been involved in either directly or indirectly, contributing money or helping someone with their political campaign?
A. Yes, I have. I have a State Senator Bill Mescher, State Senator Mike Rose, State Representative Sandy Walker. Those are the three that are in the General Assembly. Do you want others also?
Q. Thank you.
A. Sheriff Isgett, Berkeley County.
Q. Just the legislators is all I was concerned about.
A. Okay.
Q. When you're talking about setting rates and all by the Public Service Commission --
A. Right.
Q. -- you have to look at things -- particularly, you have to look at expenditures by the utilities and so forth. There has been some controversy about utilities using funds to invest in things that are not actually related to generating power or water or sewer service. Do you have any problem with them doing that?
A. Yes, I do. I have -- if you look at -- I read a book,
"The Down -- The Collapse of the Penn Central Railroad," and that was a utility who invested its money not back in the railroad, but instead they spent it in real estate and other ventures because they were making more return instead of getting the utility, the railroad, straightened up and in the end the doggone -- you know, the whole system collapsed.
So we -- you need to make sure that they are keeping the utility up to par. You know, first rate, first rate people, first rate facilities and --
Q. Assuming that the investments that they make are good investments, money making investments, that don't detract from their overall financial situation, is it all right for them to use money generated from their utility service to invest in other areas even though that may reflect on their need for an increase in rates?
A. So in other words if because of their putting money into other investments requires them to go up on the rates, is that your question?
Q. Yes, sir.
A. I'd look very unfavorably upon that, Senator.
Q. Thank you. Thank you, Mr. Chairman.
REPRESENTATIVE WILKES: Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Mr. Schuster, let me ask you a question, are you familiar with the South Carolina Consumer Advocate's Office?
A. Yeah, Mr. Hamm, I think is the director.
Q. Right. How do you think that office fits with the Public Service Commission and what do you see the role of the Consumer Advocate?
A. I think he can be or she can be a very -- the department can be a very good source of information to, say, a utility rate or regulating any entity, you need to have as much input as possible with as many people as possible. And as a commissioner, I would listen to everybody and I feel that he/she can really bring in some good views that I haven't listened to and I would -- so that's -- you know, I would welcome it.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. Schuster, since you've indicated when you were answering Mr. Couick's questions a few minutes ago that the hat that you would most likely wear as a commissioner would be that of a judge, I feel like it's only fitting maybe that I ask a few questions about your temperament and how you perceive yourself.
If I were to ask you are you emotionally driven or logically driven or somewhere in between, how would you respond to that?
A. Logically driven.
Q. That's an unqualified answer. All right. How about --
A. I was told I have a -- I'm as serious as a heart attack.
Q. How about the development oriented versus environmentally oriented? We seem to be living in a time of extremes in adversaries sometimes, so --
A. I would have to -- you can have good development and be environmentally sound. It's possible with the proper planning, it can be done, so I would say -- I could -- I'm not going to say -- it's not either or. I think with the proper planning, we can do both.
Q. So you would strike a balance then?
A. Yes, sir.
Q. How about if I were to pose this scenario, urban oriented versus rural oriented?
A. Again, one of the big fallacies we're having in this state and nation is the fact that central urban areas are decaying and we're going out urbanizing the rural areas. I think what we really need to do is do what Oregon has done by the way is restricting growth around the cities, so you can develop within this area and not develop outside of that and then really spend our time and effort redeveloping our urban areas because we're sort of going off in all directions and our urban areas are sprawled and becoming environmentally unsafe and unsound.
At the same time, we are becoming more -- it takes more energy just to do merely the things that we want, so I feel that we should be -- urban areas should remain urban and rural areas should remain rural and we should plan -- work to keep it that way or the best we can.
Q. If as a commissioner you may have to make a decision sometimes that might adversely effect a rural area or vice versa, so do I understand you to say that if -- that maybe we don't need to look at economic development particularly in the rural areas as far as, let's say, extending infrastructure at the cost of the rest of the state possibly to underdeveloped or undeveloped rural areas?
A. Well, we have a bunch of -- well, it depends on how you determine rural. A lot of people -- I think the classification I always remembered was a town of 500 people is rural, but actually that's a small town.
What I'm saying is that if we want to -- if we let -- small towns and central cities of this state are decaying, so if we develop, why not develop the small towns or the central city areas and the rural areas, but not just, say, if someone wants to develop something four miles out in the woods somewhere, that's rural, but it's probably if we could do it around an urban, existing small town or urban area.
So what I'm trying to say is that we should try to direct our growth, so that we don't have urban sprawl which costs a lot for utilities to service the areas and also it costs a lot of good farmland and stuff.
Q. Thank you.
REPRESENTATIVE WILKES: Any other committee members have a question for Mr. Schuster? If not, Mr. Schuster, thank you for your time and you may be excused.
A. Thank you very much.
1. Mr. Charles E. Schuster
Home Address: Business Address:
27 North Basilica Avenue P.O. Box 11280
Hanahan, SC 29406 Columbia, SC 29211
2. He was born in Greenville, SC on April 9, 1951.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *********;
S.C. Voter's Registration Number: 1180028.
4. He married Karen Reynolds on March 24, 1989. He was previously married to Sarah Ballard Duvall from 1985 to 1987. They divorced in Charleston County in 1987. He has one stepson: David Corey Scott, age 16, student.
6. He received a B.S. in Food Science from Clemson University 1972, and a M.B.A. from the University of South Carolina in 1978. He has completed 28 hours of short courses between 1973 and 1993.
8. He was defeated in a 1980 bid for State House District 99.
9. From 1974 to present, he has worked for the S.C. Department of Agriculture as a food and cosmetic inspector.
19. From 1974 to present, he has worked for the S.C. Department of Agriculture as a food and cosmetic inspector. His supervisor is Thomas W. Brooks.
22. He estimates having spent approximately $20 on telephone calls and $52 on typing.
26. Professional organizations: Alpha Zeta Honor Agricultural Fraternity; Gamma Sigma Delta Professional Agriculture Society.
27. Civic, charitable, etc. organizations: Berkeley County Historical Society; Berkeley County Republican Men's Club (officer); Berkeley County Republican Party (officer for 12 years); Clemson University Alumni Association (past area representative); Hanahan Arts Council; Hanahan High Parent Teacher Assoc.; Otranto Civic Club; St. Philip's Episcopal Church; Toastmasters International (officer for 10 years); University of South Carolina Alumni Assoc.
29. Five letters of reference:
(a) Sheriff Ray Isgett
Berkeley County Sheriff
300 California Avenue
Moncks Corner, SC 29461
(803) 761-8190
(b) Wade C. Arnette
Berkeley County Coroner
300 California Avenue
Moncks Corner, SC 29461
(803) 761-8178
(c) Janet Brown Jurosko
Berkeley County Auditor
223 North Live Oak Drive
Moncks Corner, SC 29461
(803) 761-6900 ext. 4036
(d) James K. McMillan, Jr., Esquire
P.O. Box 488
Sumter, SC 29151-0488
(803) 775-2455
(e) Jill Galdier
South Carolina National Bank
8599 Rivers Avenue
North Charleston, SC 29406
(803) 724-5148
30. First District.
MR. COUICK: Mr. Tyler I believe is coming in the door. Mr. Tyler, please come forward and take the seat on your extreme left. Mr. Tyler, while you're putting your things down, if you would take out your driver's license or your voter registration card, whichever is most convenient.
MR. TYLER: I have both of them.
MR. COUICK: Did you by chance receive the letter?
MR. TYLER: Yes.
MR. COUICK: Good. Mr. Tyler, if you would raise your right and be repeat the oath or take the oath.
HUBERT TYLER, having been duly sworn, testified as follows:
MR. TYLER - EXAMINATION BY MR. COUICK:
Q. Mr. Tyler, your South Carolina driver's license indicates that you live at Route 3, Box 472, Ridgeland, South Carolina, 29936. Your voter registration card indicates the same address. I believe that Ridgeland is in Jasper County; is that correct?
A. Yes, it is.
Q. And you have been a resident of Ridgeland for some period of time, I take it?
A. Life.
Q. In fact, you were a math and science teacher for 31 years; is that correct?
A. Yes.
Q. Just retiring, what, three years ago? Three or four years ago?
A. In 1990.
Q. And you've also served on the Jasper County Board of Education for close to, what, 20 years or getting close to 20 years?
A. Well, 17.
Q. You've been very active in education. How do you come to have an interest in the Public Service Commission?
A. Well, sir, after having served as a public school teacher, as a public servant, as a member of the Jasper County Board of Education, I always wanted to serve my country.
I served honorably in the United States Army for three years and as a Board member for 17 years and I feel that now it's time for me to move onto larger or to more diversified group of individuals.
Q. Aside from your service on the Jasper County Board of Education, do you have any other outside interest right now other than just being retired? Do you have any other employment or any other business interests at this time?
A. Yes, I -- at the present, I have a part time position with the United States Postal Service as a rural carrier in Hardeeville, South Carolina, which is in Jasper County.
Q. And I believe that's as a substitute; is that correct?
A. Yes, it is.
Q. How much control do you have over the hours you spend in that position?
A. None whatsoever. It's set.
Q. I guess my next question is would you anticipate that if you were elected to the PSC that you would have to relinquish those responsibilities as a substitute carrier?
A. Yes, I would.
Q. Mr. Chairman, in our research with SLED and a credit bureau, we found that both indicate very positive reports on Mr. Tyler. No negative entries reported by credit or judgment search. What would you think would be one or two major issues confronting the Public Service Commission at this time, Mr. Tyler?
A. Well, I think one of the major issues would be fuel consumption and the natural fuel that we use to generate electrical entities or whatnot. We'll have to look at some alternative sources simply because our natural resources is going to soon run out if we continue to use it.
Q. You indicate from your answer, and maybe I'm reading too much into it, that the solution is one of expanding the pie rather than narrowing the pie in terms of reducing usage, in terms of working on the demand side rather than the supply side or vice versa, that you would rather find more supply rather than reduce the demand?
A. Right.
Q. Is that true?
A. Yes, I certainly would.
Q. Have you heard of a concept of generational mix as it relates to fuel sources?
A. Generator --
Q. Generational mix?
A. No, I'm not familiar with that.
Q. How about wheeling of wholesale supplies of power? Wheeling, W-h-e-e-l-i-n-g?
A. No, I have not.
Q. How about a company's rate base?
A. Rate --
Q. Rate base? Rate base, b-a-s-e? Rate base?
A. Have I heard of the rate base?
Q. Base, yes, sir.
A. The only thing that I am familiar with that you -- I would get a printout of the basic rate from the electrical company that serve me and --
Q. What types of utilities does the Public Service Commission regulate? Other than electrical power, what other types of public utilities does the Public Service Commission regulate?
A. Use of gas, natural gases and also to a certain extent regulate use of public transportation, some forms of transportation.
Q. Mr. Tyler, the Public Services Commission often has the Consumer Advocate appear before it. What do you think your role is with him when he is there? Is it a cooperative role? Are you an advocate for the public as well? What's your role there as a Public Service commissioner?
A. Okay. Certainly, I would be an advocate of the public at all times. I think any commissioner should always have an open mind at all times. Positive open-minded at all times.
Q. If you're sitting there, what type of hat do you think you're most often going to wear? Is it going to be a traffic cop or a public relations expert or a personnel director in terms of being over the personnel of the commission or as a judge? What type of hat do you think you're most often going to be called upon to wear for the Public -- as a Public Service commissioner?
A. Well, I -- I would think that it would be more in the line of a judge. A judge or a jury where you simply gather all of the -- you would hear all of the information and then you would have to make the decision based on the information that you have gathered.
Q. Is affordable power and gas and transportation something that would be important to you as it relates to the public? Would that be something that you would seek?
A. Certainly, it would be.
Q. And how about as to the environment, would you think it would be part of your role to make sure that we keep the environment as clear as possible?
A. Yes, we would certainly have to -- have to do that.
Q. I think both of those are very laudable from a personal standpoint, but at what point do you have to balance those two desires of affordable, clean energy with the right of a company to make a profit? How are you going to balance those things?
A. Okay, the question is how will I balance the two, the environment versus --
Q. Well, the environment and the desire to have affordable power or fuel on one hand and with the need for a company whether it be SCE&G or whomever to make a profit?
A. Okay. Okay. Number one, I understand that companies are in business to make money. Okay, but at the same time they have to look out for the environment because if you don't, eventually you're not going to have a customer out there to deal with.
Q. Mr. Tyler, do you own any utility stock?
A. No.
Q. Does your wife or anyone in your household own any utility stock?
A. No.
Q. I believe -- is your wife retired as well now?
A. No, she's still working.
Q. And she is employed by whom?
A. The Jasper County Board of Education.
Q. In addition, Mr. Tyler, you had an opportunity today to review your PDQ summary, I believe. Have you reviewed that, your Personal Data Summary that we supplied to you this morning?
A. No, I did not -- I did not get a copy of it.
Q. We need you to do that after you leave here to make sure that we include it in the record. Would you agree to once you've had an opportunity to review and correct it for it to be a part of this record? Would that be fine with you?
A. Yes.
Q. Thank you. Mr. Chairman, I have no further questions at this time.
THE CHAIRMAN: Any questions from members of the committee?
SENATOR COURTNEY: Mr. Chairman?
THE CHAIRMAN: Senator Courtney.
EXAMINATION BY SENATOR COURTNEY:
Q. Mr. Tyler, looking over your questionnaire summary, I notice you have a strong background in mathematics and I think that's important for someone sitting in the position that your seated. Would you briefly go over the types of courses and all that you've had as far as mathematics are concerned?
A. Okay. I've had high school and high school mathematics. And then in college, I've had the college algebra. I've had calculus. I've had trigonometry and I've had some differential calculus. And I've also had statistics.
Q. You have taught mathematics and science in the school level, I believe; is that correct?
A. Yes.
Q. How long have you taught those subjects?
A. For 31 years.
Q. What particular courses have you taught in mathematics?
A. Okay, I've taught algebra and general math.
Q. What level was that?
A. This is the junior high and middle school.
Q. Mr. Tyler, you have also been involved in politics. Apparently you've been involved in the Democratic Party it shows and you served as chairman some time.
Have you been involved in any political races in the last four to six years as far as being directly or indirectly involved in political campaigns, helping someone or donating funds to campaign for anyone in the General Assembly?
A. No, I think I may -- okay, I resigned from the Party in 1990 because of the postal job that I was about to take. I was chairman up until that point.
Q. Is there anyone sitting in the Assembly at this time, though, that you have helped as far as their political campaign is concerned?
A. No.
Q. In the General Assembly?
SENATOR JACKSON: In the General Assembly as a whole?
A. No. Wait, wait, wait, back -- back up again, I want to make sure. Okay, when you said help --
Q. Work in their campaign and donated money to their campaign or anything like that? There is nothing wrong with it. I'm just asking --
A. Well, I'm trying to -- I have not worked directly in the campaign of Representative White, Kennedy. And if I donated money, it would not have been a substantial amount. I don't recall.
Q. None of us give substantial amounts. Mr. Tyler, you mentioned earlier or I think I understood you to say that you would be a strong advocate for the consumer in South Carolina?
A. Yes, I --
Q. If you had a scenario where a utility company came before you and showed a definite and clear need for a rate increase, but at that particular time it was may be a down turn in the economy, personal bankruptcies were up and more or less a recession, the consumers are having a hard time, do you know what your leaning would be in a situation like that?
A. Would you repeat that scenario again?
Q. I don't know if I can. I'm just asking you, you said you would be a strong advocate for the consumer and if a utility company came before you with a clear and definite need for a rate increase, but at the same time it was a bad time in the economy that jobs were -- unemployment rate was up and consumers were having a hard time, bankruptcies were up and so forth, what would be your leaning as far as an increase in the utility in a situation like that?
A. I would have to lean -- after having -- understand this now, I'm going to have to, along with the other commissioners, take all the facts that are there, okay. And if it comes out favorable, okay, to the consumer, okay, to the consumer, the economy is to a point where it will be detrimental, okay, then I would have to deny or cut down on the amount that's being asked for.
Q. Do you see a need to balance the needs of the utility company with the problems that the consumer has, though?
A. Would you repeat that?
Q. Do you see a need to balance as far as the --
A. Yes. And then again we have to clearly understand that even if timing is bad, if the company cannot produce or do not have the funds to produce the electrical energy, then you're going to have to clearly look at that.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. Tyler, you are currently serving on the Jasper County Board of Education?
A. Yes.
Q. Some 18 years now?
A. 17.
Q. 17. That's certainly commendable. What would be your plans as to that elected position if you were elected to the Public Service Commission?
A. I'd have to resign that position.
Q. Thank you.
THE CHAIRMAN: Any other questions? Thank you so much?
A. Thank you.
THE CHAIRMAN: Thank you. You may be excused. Next.
MR. COUICK: Mr. Chairman, Mr. F. Lamarr Wiley is on his way down.
(Mr. Tyler agrees to admitting PDQ).
1. Mr. Hubert Tyler
Home Address:
Route 3 Box 472
Ridgeland, SC 29936
2. He was born in Ridgeland, SC on May 23, 1934.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *******;
S.C. Voter's Registration Number: 569468.
4. On September 15, 1957, he married Jessie Wright. He has three children: Yasmin Tyler-Hill, age 35 (medical doctor); Kahn Tyler-Smith, age 33 (teacher); and Khandra Y. Tyler, age 17 (college student).
5. Military service: U.S. Army, Rank E5, Discharged in 1954.
Serial #: RA14402943.
6. He graduated from Savannah State in 1959, with a B.S. in mathematics. He received a M.S. in education from Savannah State, Armstrong State Graduate Center in 1976. He attended S.C. State in 1961, Virginia State College in the summers of 1962, 1963, and 1964, and the University of Vermont in the summers of 1967 and 1968.
7. He has served on the Jasper Board of Education from 1976 to present.
8. He has been defeated previously for a seat on the Public Service Commission.
9. He taught mathematics and science for the Beaufort County Board of Education from 1959 to 1990.
19. He was employed with the U.S. Postal Service in Hardeeville, S.C. as a substitute rural carrier in 1990. His supervisor was Michael Sibilio.
26. Professional organizations: S.C. Education Association (retired); National Education Association (retired).
27. Civic, charitable, etc. organizations: V.F.W. Post 6559 (commander for 12 years); NAACP Ridgeland Branch; Shiloh Masonic Lodge #92; Craddle-Simmons Consistory #360; Jasper County Board of Education (chairman for the past 6 years); St. John A.M.E. Church; Beaufort-Jasper Career Board; Jasper County Democratic Party (chairman for 10 years).
29. Five letters of reference:
(a) Dr. Curtis Brantley
P.O. Box 527
Hardeeville, SC 29927
784-6431
(b) Dr. William Singleton
P.O. Box 848
Ridgeland, SC 29936
726-7205
(c) Ms. Andrea W. Smallwood
P.O. Box 848
Ridgeland, SC 29936
726-7220
(d) Ms. Helen Rivers
Palmetto Federal Savings
Ridgeland, SC 29936
726-8186
(e) Mr. J.N. Malphrus, Jr.
602 2nd Avenue
Ridgeland, SC 29936
726-3175
30. First District.
MR. COUICK: Come around to the seat here on the far left, the witness box and if you would go ahead and pull out your driver's license or your voter's registration certificate. And while you're standing there, Mr. Wiley, and you're putting that up, please go ahead -- I'm sorry. While you're standing there, I'll administer the oath to you. Raise your right hand please.
FLEMISTER LAMARR WILEY, having been duly sworn, testified as follows:
MR. WILEY - EXAMINATION BY MR. COUICK:
Q. Mr. Wiley, I'm looking now at your driver's license and it indicates that you reside at 7 Glenwood Avenue, Charleston, South Carolina, 29403 and that your voter registration indicates the same address. Is that the correct address?
A. That is the correct address.
Q. Thank you. Would you state for the committee your full name please?
A. F. Lamarr Wiley.
Q. I'm sorry. We're barely hearing you, Mr. Wiley. You might pull that mike just a little closer to you. Thank you.
A. Can you hear me now?
Q. Yes, sir. Please state your name again, if you will?
A. Excuse me?
Q. Please state your name again for the record?
A. F. Lamarr Wiley.
Q. F. Lamarr Wiley. Thank you. Mr. Wiley, what is your interest in the Public Service Commission? What has propelled you to run for the Public Service Commission? What causes you to want to serve there?
A. This is a job that I need. In coming to South Carolina almost 33 years ago, I came with a mission and that mission was to serve South Carolina. For the past 22 years, I have served Charleston County as the Park and Recreation commissioner.
I have served in various capacities of that commission and with the experience as the commissioner at the county level, I can very easily bring that experience to the state level.
Q. What is your present employment situation, Mr. Wiley?
A. I am employed with the Marriott corporation at the Medical University of South Carolina.
Q. The Marriott supplies food and catering services there or --
A. Food and catering and service industry. It -- I am the management service division.
Q. How long have you been with the company?
A. I've been with Marriott almost five years now.
Q. The reason I ask you the question is there is in it -- a question on your statement of economic interest form as to receiving income fees or payments from a governmental source. I take it that the money you receive your payment is actually from Marriott as opposed to MUSC; is that correct?
A. That's correct.
Q. Thank you. I appreciate that.
A. We contract -- we're contracted at MUSC.
Q. Mr. Chairman, as with all candidates, we have made a review of the SLED report and the credit report, both indicate positive in that there are no negative entries. I would like to have that put on the record.
Mr. Wiley, I believe earlier today you might have gotten a copy of your Personal Data Questionnaire summary and had an opportunity to review it?
A. Yes.
Q. Are there any corrections you would like made prior to it being made a part of this record?
A. None other than the fact that my daughter is 10 years old instead of 11.
Q. Okay. Thank you. As to your employment with the Marriott Corporation there at MUSC should you be elected to the Public Service Commission, what would be your intention as to that employment?
A. My intention would be to leave the Marriott Corporation and devote full time to this commission.
Q. You would have no other outside business interest at that point?
A. None whatsoever.
Q. Do you own any utility stock, Mr. Wiley?
A. No, sir.
Q. Does your wife or anyone else in your household own any utility stock?
A. No, sir.
Q. What would you think would be the one or two major crucial issues facing the Public Service Commission at this time?
A. One or two --
Q. Major issues or public policy issues facing the PSC?
A. I don't know. The major issue that would be facing me was to get acclimated to the PSC's method of operations. I have no idea what --
Q. Yes, sir. I understand.
A. -- PSC --
Q. What types of utilities does the Public Service Commission regulate, Mr. Wiley?
A. All major utilities in the state. Electricity, railroad, gasoline.
Q. And when you would sit as a Public Service Commissioner, you obviously would have a number of responsibilities. But if I handed you the analogy of wearing hats and one hat was being a public relations expert and one hat was for being a Personnel manager for the employees of the agency, another hat would be someone that would be responsible for being a judge, perhaps someone else would be -- somebody would be responsible for being a traffic cop, which hat would you envision yourself wearing most often as a commissioner?
A. I think the public Service because that individual would be the one that citizens of this state look to to give them the service that they look --
Q. I'm sorry if I misspoke. I meant to say public relations. It would be either public relations, a judge, a traffic cop and a personnel supervisor. Public relations, judge, traffic cop or personnel supervisor, which one of those four hats would you wear most often?
A. Judge.
Q. And in the capacity of being a judge, you would often be called upon to make decisions that would impact not only a company that had shareholders across the state, but also the public in terms of the rates they would pay. What would be your approach to making those decisions? What is your basic orientation? Are you a consumer advocate? Are you an advocate for reasonable return to shareholders? Are you an environmentalist? What are you going to be looking for when you make those decisions?
A. I would be looking for basically the consumer advocate's role because in the Parks and Recreation -- as a commissioner with the Parks and Recreation Commission, we just last year, in the last election, general election, came through a 34 million dollar bond referendum and there were four other referendums on the ballot.
Our referendum was the only one that was passed and in putting that package together -- we put it together. I was chairman of the commission at the time. We put it together with the citizens of Charleston County in mind and we kept a close eye on what they wanted as -- in regards to what we wanted and got. And we kind of brought those two together.
Q. Would you anticipate continuing your service on the Charleston County Recreation Commission -- Parks and Recreation Commission if you were elected to the PSC?
A. I would think that would be a conflict of interest and I would have to relinquish that.
Q. And finally, Mr. Wiley, do you have any recommendations to this committee to improve its screening process? Is there anything that you've noticed going through it that you would say let's change that and make it better?
A. No, sir. This is my first appearance before you and on a first time basis, I could make not a recommendation.
Q. Thank you. I appreciate that. Mr. Chairman.
THE CHAIRMAN: Yes, sir.
Q. No further questions.
THE CHAIRMAN: Any questions from any members of the committee? Thank you so much. We appreciate your coming, you may be excused.
A. Thank you.
1. Mr. F. Lamarr Wiley
Home Address: Business Address:
7 Glenwood Avenue 171 Ashley Avenue
Charleston, SC 29403 Charleston, SC 29425
2. He was born in Blakely, Georgia on June 5, 1939.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *******.
S.C. Voter Registration Number: 1 049 122.
4. He was married to Bertha Hollinger Wiley on October 15, 1960. He has one child: Jamilyn LaMarshia Wiley, age 10.
5. Military Service: USAF, Rank A/3C, from 1956 to 1960, Honorably Discharged.
9. He worked as a general insurance agent for 25 years.
26. Professional organizations: Past Secretary, Treasurer, Vice-Chairman, and Chairman, Charleston County Park and Recreation Commission, 22 years service; National Recreation and Park Association.
27. Civic, charitable, etc. organizations: Westside Civic Club; Azalea Drive Church of Christ.
29. Five letters of reference:
(a) Mr. Frank McElveen
P.O. Box 70519
Charleston, SC 29415
(803) 744-1082
(b) The Honorable Joseph P. Riley, Jr.
Mayor, City of Charleston
P.O. Box 652
Charleston, SC 29402
(803) 577-6970
(c) First Federal of Charleston
P.O. Box 10968
Charleston, SC 29411-0968
(803) 724-0955
(d) Tim Eubanks
1664 Seignious Drive
Charleston, SC 29407
(803) 766-8676
(e) Carl Boone
5 Glenwood Avenue
Charleston, SC 29403
30. First District
MR. COUICK: Mr. Chairman, the next candidate is Mr. Dibble for the Second Public Service Commission District. He should be down shortly. We are now changing -- we have screened all the candidates for the First Public Service Commission District.
Mr. Dibble, please come over to the far left chair in the witness box. And before you would sit down, if you would take out your driver's license and/or your voter registration certificate.
Mr. Chairman, as I mentioned, we're now moving into the Second Public Service Commission District. The first nominee is Mr. Robert Dibble from Orangeburg, South Carolina. Mr. Dibble, if you would raise your right hand when you're ready and take the oath.
ROBERT BUFORD DIBBLE, SR., having been duly sworn, testified as follows:
MR. DIBBLE - EXAMINATION BY MR. COUICK:
Q. Thank you. Please have a seat. Mr. Dibble, looking at your driver's license, you have one of the new ones, I see. You live at Route 5, Box 785 in Orangeburg, 29115 and you're -- it looks like your voter registration certificate indicates the same address. It says Route 5, the North Road in Orangeburg; is that correct?
A. That's correct. Sir.
Q. Would you please state for the record your full name?
A. My name is Robert Buford Dibble, Sr.
Q. Yes, sir. Mr. Dibble, have you had an opportunity to review your Personal Data Questionnaire summary?
A. Yes, sir. I've reviewed over it and there is only one correction on there and that would be my first letter of recommendation where it says Linda Odell and it should be Mr. Butch Blackwell.
Q. Is that a substitution you would like the committee to take?
A. It would be fine, yes, sir.
Q. Yes, sir. There was actually a letter from Ms. -- you said Linda --
A. Odell.
Q. -- received, but you would like to substitute those?
A. Well, did she ever -- did she send one in?
Q. We'll verify that. Thank you. We did receive her letter. Thank you. Mr. Dibble, what causes you to run for the Public Service Commission? What has compelled you to offer your candidacy?
A. Oh, gosh, really, this country has been real good to me and I've served in the United States Army and the State of South Carolina has been good to me and I think that I would like to serve it in some way or fashion something similar to this. That's one of the reasons I've decided to run and I'm able to do it.
Q. You have worked for -- in public service before you, I believe.
A. That's right.
Q. You were with the City of Orangeburg?
A. I was with the City of Orangeburg for 18 and a half years.
Q. And lately, you've gone to, I believe, a wholesale agriculture business with roses; is that correct?
A. No, sir. That was --
Q. Prior to that?
A. That was prior to that, yes, sir.
Q. What -- the nursery business you're in now is what type?
A. We're a wholesale and retail type nursery. We operate about 35,000 square feet of greenhouse area. We have -- we also do landscape contracting and we also have a garden center and floral shop operation.
Q. When you were with the city, I believe you were the Director of Parks and the City Administrator; is that correct?
A. I was Director of City Parks and I answered to the City --
Q. The Administrator?
A. He was my boss. That's --
Q. Do you have any other employment at this time other than the self-employment you have with your greenhouses, Mr. Dibble?
A. No, sir.
Q. Do you own any utility stock?
A. No, sir.
Q. Does your wife or anyone else in your household own utility stock?
A. No, sir.
Q. Mr. Chairman, as with all other candidates, we have reviewed the report of SLED and the credit report. Both were positive in that there were no negative entries on the report, for the benefit of the committee.
Mr. Dibble, what would you think would be the one or two most important issues facing the Public Service Commission in South Carolina today?
A. Well, I look at the Public Service Commission as sort of a balancing act. I realize that the utilities in the state of South Carolina have got to stay healthy. They've got to make a profit, but at the same time, that profit has got to be legitimate. At the same time, we look out for -- keep the utilities healthy.
We also have got to look out for the interest of the citizens of South Carolina, the commercial establishments for South Carolina and we've got to look out for the industry of South Carolina. It's sort of a balancing act is the way I look at it.
Q. In your role ensuring that there is a proper balance, what part do you take in insuring there is a proper balance? Are you more of an advocate or devil's advocate, as I should say, or are you more often the judge that makes sure that both cases -- both sides have an opportunity to present a fair case?
A. Well, I'm going to tell you like this, I'm a real good listener and I'll listen to both sides and then if I'm given adequate information of which I can build my decision upon, that would be my process of doing it.
Q. If someone were to take or question you closely about your stance on the environment and what role it would have in your deliberations, you say you are a good listener, what part would it take? I mean is the PSC responsible for keeping the environment clean and green?
A. The environment is very important to me because like in the type of business I'm in, we are very environmental conscious. I've got to -- being in the nursery business, you got to keep up with all kind of regulations concerning use of insecticides, pesticides and fungicides and things of that -- fertilizers and things of that nature, so concerning the utilities, utilities should be geared to the point where they are accountable for the environment as well as anyone else.
Q. What utilities does the Public Service Commission regulate?
A. Which ones do they regulate?
Q. Yes, sir.
A. The major utilities, electric. I believe they would also regulate some of the natural gas and also some of the truck.
Q. The City of Orangeburg is in engaged in the, I believe, the production of electrical power; is that correct?
A. To a certain extent, yes, sir. I recall that it's -- it's on -- offset some of the -- when they have peak demands, I think they have their own generating plant. There are units that they can kick in and cut down on some of the --
Q. And they also are a retailer of electrical power, I believe? They buy wholesale from SCE&G, I believe, and they sell it retail?
A. I don't know.
Q. Would they ever be before you?
A. Pardon me?
Q. Would the City of Orangeburg ever be before the Public Service Commission?
A. Would they?
Q. Yes, sir.
A. I imagine they possibly could be.
Q. Do you receive a pension from the City of Orangeburg?
A. No, sir, I do not.
Q. Do you recognize the terminology of wheeling, wheeling of wholesale electricity, w-h-e-e-l-i-n-g?
A. No, sir, I don't.
Q. How about generational mix?
A. Huh-uh.
Q. How about the role of the staff of the Public Service Commission, how would you see them helping you, Mr. Dibble?
A. There again, I don't know that much about the commission, but I look at -- they would be responsible for furnishing us or the commission members with accurate information and giving input into us helping to make the decisions that we need to make.
Q. How about the term rate base? Do you recognize that term, Mr. Dibble?
A. No, sir, I don't.
Q. A company's rate base? If you were to be elected to the Public Service Commission, would you presume it to be a full time job to the extent that you would relinquish your greenhouse business or do you have someone else to help you take that on in your absence or --
A. My wife, she is in partnership with me and I would relinquish all ties with Dibble Nursery.
Q. Has she volunteered to do all that hard work?
A. Yes, she did. We're to a point where we are well automated and she can take care of all the decision making and all that. I would take it on to be my full time responsibility.
Q. And, finally, Mr. Dibble, as we have asked each of the candidates, do you have any recommendations for this committee to improve its screening process, so we can do a better job?
A. Well, I've been waiting all day and we've -- you know, I believe the problem is set up a definite time schedule for the candidates would make it a little more easier on some of us.
Q. Yes, sir.
A. But other than that, I see no problem.
Q. Thank you. That's all, Mr. Chairman.
THE CHAIRMAN: Any questions from the members of the committee?
REPRESENTATIVE WILKES: Yes.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. Dibble, as a small business person and somebody involved in the horticulture industry, I'm a small business person myself, by the way, and I am also a rosarian, so we have some things in common, but you -- you know what it's like to have to make a payroll, right?
A. Yes, sir.
Q. And I think everybody in the state government ought to have that experience once in their lifetime, don't you?
A. I agree because it makes you think about it before you spend a dollar.
Q. Yes, sir. Do you feel like that you could, given the roles that you've played in your life, give a fair hearing in a utility case where the profit motive of the industry is on one side and the environment possibly on the other or another scenario where you may have a urban versus a rural issue? How do you feel about your judgment on issues like that? Are you a person who tends to go to extremes or are you more of a centrist or logical thinking person or a reactionary, emotional person? How would you classify yourself?
A. I'm not an emotional type person. Like I said, I'm a good listener and I listen to all sides of a story and I hope that whoever is giving us the information is giving us some true and actual and factual information. And I think with the help of the good Lord himself, I feel that I can make any decisions that may come before the commission.
Q. And your business now you feel is successful enough that you could turn it over to your wife with the automation that you have and --
A. Yes.
Q. -- run and --
A. I think --
Q. -- it would not distract you in your role as a commissioner?
A. No, sir. It would have no -- play no role in it whatsoever.
Q. Thank you.
SENATOR COURTNEY: Mr. Chairman?
THE CHAIRMAN: Senator Courtney.
EXAMINATION BY SENATOR COURTNEY:
Q. Mr. Dibble, other than working as the Parks Director for the City of Orangeburg, did you ever have any experience with their utility system?
A. No, sir.
Q. How do you plan to prepare yourself for considering complex requests and so forth from utility companies from South Carolina? How do you plan to prepare yourself for that job? Who would you turn to and how would you study?
A. Well, it wouldn't be a utility company for one thing. I would -- I would do the research on my own and I would believe that the research staff is connected with the -- with the PSC Commission would be able to guide us and help us and at the same time furnish us with types of information that we really need.
Q. Thank you.
SENATOR JACKSON: Mr. Chairman?
THE CHAIRMAN: Any other questions? Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Mr. Dibble, a couple of years ago in the City of Orangeburg, there was a conflict between Jones (phonetic) Cable and the City of Orangeburg. Are you familiar with that issue as it relates --
A. No, sir, I know what you're talking about right now. What I read in the paper, that's all.
Q. What's your opinion of that as it relates -- as it related to the cable industry, in particular now that this -- the Informational Highway and the expansion of the cable television to maybe public utilities?
A. My personal opinion is that the City of Orangeburg entered the cable industry would be that it is something that they don't need to get into. I look at it like this that the City of Orangeburg is a public utility and I think that they need to stay out of that private enterprise operating in a fair marketplace.
Q. What is your opinion on the, say, telephone companies getting into the cable industry?
A. I don't think they should be into it.
Q. Do you strongly believe that they should not be into it?
A. No, I don't strongly, but they can prove to the point where they'd be making more getting into it would be -- and that's like a utility. They can get into it and then -- if they can do a better job, that'd be fine.
THE CHAIRMAN: Any other questions from any member of the committee? Thank you so much, Mr. Dibble. You may be excused.
A. Okay, I thank you for your kind consideration.
1. Robert Buford Dibble, Sr.
Home Address: Business Address:
Rt. 5, Box 785 Rt. 5, Box 785
Orangeburg, SC 29115 Orangeburg, SC 29115
2. He was born on December 29, 1935.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *********.
S.C. Voter Registration Number: 0 751 610.
4. He was married to Shirley Jean Summers Dibble on July 18, 1965. He has 2 children: Dianna Summers Dibble Todd, age 26 (Horticulturist for Dibble Nursery) and Robert Buford Dibble, Jr., age 23 (Student at Central Wesleyan College and part-time shoe salesman at Belk-Hudson Co. in Orangeburg).
5. Military Service: He served from July 7, 1958 to July 6, 1961, when he was honorably discharged.
Serial #: RA 14681858; Rank: E-5.
6. He graduated from Orangeburg High School in 1954 and graduated from Clemson University in 1958 with a B.S. in Horticulture.
9. He was a Wholesale Grower of Cut Roses at Green Farms Rose Co. in Westport, Conn. from September 1961 to December 1962. He served as Director of Parks for the City of Orangeburg from January 1963 to May 1982 and has worked with Dibble Nursery since May 1982.
19. He worked as Director of Parks (City Administrator) for the City of Orangeburg from January 1963 to May 1982.
26. Civic, charitable, etc. organizations: Alpha Zeta, Honorary Agricultural Fraternity (1958-present); President of Post O for the Travelers Protective Association; Men for Christ Club at St. Paul's United Methodist Church.
29. Five Letters of reference:
(a) Mrs. Linda Odell
Vice President, First Union National Bank
100 Russell Street, N.E.
Orangeburg, SC 29115
(803) 533-4400
(b) Mr. Robert A. Bates
455 Brewton Street, N.E.
Orangeburg, SC 29115
(803) 536-2565
(c) Rev. Ernest M. Heape
1321 Broughton Street, N.W.
Orangeburg, SC 29115
(803) 533-0557
(d) Mrs. Dorothy B. Sells
373 Livingston Terrace
Orangeburg, SC 29115
(803) 536-1837
(e) Rev. Carl N. Harris
First United Methodist Church
1001 Fifth Avenue
Conway, SC 29526
(803) 248-6642 (H)
(803) 248-4251 (W)
(f) Grayson L. Blackwell
Orangeburg National Bank
Orangeburg, SC 29115
(803) 533-3400
30. He is seeking the position of Public Service Commissioner for the Second District.
THE CHAIRMAN: I'm sorry we couldn't get to you earlier, but some of these candidates just talk a little longer than others.
A. Okay. Thank you.
MR. COUICK: Mr. Chairman, there are certain matters as with an earlier candidate that would probably be best to discuss briefly and initially in Executive Session and counsel would recommend at this time that we -- that you --
THE CHAIRMAN: The Chair will entertain a motion for Executive Session.
REPRESENTATIVE WILKES: I so move.
THE CHAIRMAN: Move for Executive Session. Any objection? There is none. We'll now go in executive session
(Executive Session)
MR. COUICK: Mr. McIntosh, if I could ask you to pull out your driver's license and/or your voter registration certificate and hand it to Ms. Hammond.
MR. MCINTOSH: Do you need both or just one?
MR. COUICK: Both preferably if you have them both. Mr. McIntosh, your driver's license indicates that you live at 862 -- is it Stebondale?
MR. MCINTOSH: Stebondale Road.
MR. COUICK: In Columbia and the zip code is 29203?
MR. MCINTOSH: That's correct.
MR. MCINTOSH: The same address is indicated by your voter registration certificate?
MR. MCINTOSH: That is correct.
MR. COUICK: If you would please raise your right hand, I'd like to administer the oath.
CARL F. MCINTOSH, having been duly sworn, testified as follows:
MR. MCINTOSH - EXAMINATION BY MR. COUICK:
Q. Thank you. Mr. McIntosh, would you briefly review for the committee your employment history, so that they have an idea of your experience.
A. My -- you're saying review --
Q. Your employment history.
A. Just present to them what is my employment history?
Q. Yes, sir.
A. Currently, I am an attorney, a senior attorney with the South Carolina Department of Consumer Affairs. I've been an attorney with the Department of Consumer Affairs since the Fall of 1987 and I've serve continuously since the fall of 1987.
Prior to my employment with the Department of Consumer Affairs, I served as a legislative aide -- I served in a number capacities -- let me back up. Prior to my employment with the Department of Consumer Affairs, I was an Assistant Solicitor with the Second Judicial Circuit which covers the counties of Aiken, Barnwell and Bamberg counties. And I was briefly an assistant solicitor out of Aiken, but serving those three counties for about six months.
Prior to that, I served in a number of capacities with Congressman Butler Derrick who represents the Third Congressional District of South Carolina. And I was employed in his office, I'm going to have to review that in front of me.
Q. Was it '82 through '87?
A. That's correct, and employed in a number of capacities in his office. My final job included legislative aide and special projects directly.
Prior to working for Congressman Derrick, I'm going to have to review this real quick.
Q. You can just generally lay that out. I believe you were employed as a University professor at Howard University?
A. Well, now, that was during my employment with Congressman Derrick, I did serve in that capacity for one semester at Howard University. And if you -- you may have the information readily available in front of you, but I --
Q. And that's fine. I believe you've given the committee the gist of --
A. But there are a number of other jobs that I had held while I was an undergraduate --
Q. Right.
A. -- at Yale University.
Q. During your term of employment with Congressman Derrick, I believe you attended Georgetown University Law school; is that correct?
A. That is correct. And I think you've got one of the dates is incorrect.
Q. You say you received you Juris Doctorate in February, 1986, and it looked like you attended Fall of '81, Spring of '82, Fall of '83?
A. Fall of '85.
Q. '85?
A. I actually completed my coursework in December of '85. And there was no December graduation. The degree was confirmed in February of '86.
Q. Mr. McIntosh, you're employed by the Department of Consumer Affairs; is that correct?
A. That is correct.
Q. Do you recognize any individual in this room now as being also employed at the Department of Consumer Affairs?
A. I do.
Q. Were you present this morning at approximately 10:00 o'clock?
A. I was.
Q. Did you understand the admonition of the Chairman and of the counsel for the committee that any person affiliated with a candidate here in terms of similar employment should not be present in the room during the course of the hearings today?
A. I understood that.
Q. Have you spoken with the other employee --
A. I have not.
Q. -- at all today?
A. Other than to say hello when I walked in and saw him in the building.
Q. Do you work with him from time to time?
A. I do work with him.
Q. Do you know his name?
A. Yes, I do.
Q. And what is that name?
A. Elliott Elam.
Q. Okay.
THE CHAIRMAN: Do you want him to leave?
Q. Is he here today on business of the Department of Consumer Affairs?
A. I have no idea.
MR. COUICK: Mr. Elam, if you would please stay, just stay with us for a while. We may have a couple of questions.
MR. ELAM: Thank you.
Q. Mr. McIntosh, what interested you in serving on the Public Service Commission?
A. Well, as you can see from the information I provided, my current employment, I've been an attorney with the Department of Consumer Affairs almost six years. During that period, I've argued cases before the Commission. I've argued cases in many areas including communications, electrical power, water and sewer, those cases that involve the setting of rates, terms and conditions of service for those various utility companies. Also transportation companies.
During that period of time, I don't know if you've followed any cases that I have been involved with or the Department has been involved in, there has been some major issues that have been presented. Our office has positions in those and on numerous occasions, those positions have been rejected by the commission. We've taken some of those cases up on appeal and many times we've been able to get those positions reversed.
And throughout that period, it has concerned me that there needs to be a commissioner or commission composed or the variety of individuals, especially individual -- an individual, at least one, that represents the consumer interests and at this point or at this time, I believe that it was a golden opportunity for someone with that background and I guess someone with my particular background that could be a member of the commission and add that type of experience and bring that type of experience to the commission.
I think in reading the legislation -- or the legislation or the Reorganization Act, it states that the Legislature should strive to get a diverse commission and it particularly says the commission or individuals with the background in Consumer Affairs and that is specifically in the legislation and I think I possess those qualities, that type of background in addition to my other -- my educational experience and my other experiences -- work experiences.
So I think I'm uniquely qualified to serve.
Q. Mr. McIntosh, what do you think are the one or two crucial issues pending before the commission at this time? Not specific cases so much, but you mention that they need consumer expertise or consumer representation, but other than that, what are one or two issues that you feel are very important?
A. Well, it's hard to just pick one or two. There are so many before the commission right now, but I think probably the one that most people are concerned about or that you read about every day in the newspaper is probably what's going on in the telecommunications field.
As you're probably aware --
Q. Could you state specifically what you're talking about --
A. That's what I'm going to --
Q. Telecommunications?
A. As you're probably aware, there is a movement afoot in Washington to come up with or gather some concept called an Information Highway and that's a glorious term I think which pretty much means that the telephone system as you and I probably know it would be used to provide all sorts of information to end users, those telephone subscribers. There is quite a bit of movement afoot in Washington to get to that point, but what we're looking at is a deregulation of certain existing --
Q. At the current time give, is much of that responsibility given to the South Carolina Public Service Commission?
A. No, it's not. Our -- I'll take that back. The area is real cloudy right now. Right now, you've got pending legislation before Congress. We don't know exactly what form this is going to take.
Q. But right now where is cable television regulation resorted to?
A. Cable television pretty much is unregulated as we know it.
Q. Is it not regulated by franchise ordinances and by the FCC?
A. Well, the Franchise Ordinances pretty much just regulate it as far as what cable company serves what community and what their franchise territory is.
Q. They can't regulate customer --
A. As far as --
Q. -- service standards and franchise ordinances?
A. They can, but as far as there is very little of that going on. As far as rates, rates are pretty much deregulated except for basic service which local franchise authority has.
Q. I thought there were benchmark rates for even for that expanded hearings?
A. There are benchmark rates, but even with those benchmark rates there is a lot of leeway in there to -- for companies to raise their rates. But, again, I think the commission has no authority there. But --
Q. So in the area of telecommunications, where would you have an immediate impact?
A. The immediate impact would be hopefully helping to shape that legislation in Washington. It -- the legislation -- if telephone is deregulated, I think the State would lose a lot of control over the rates that you and I now pay for it.
Q. Let me stop you there because it's interesting about what you're saying, but I take it as a consumer advocate on the Public Service Commission, you would envision one of your responsibilities or one of your capabilities would be at lobbying to shape the Federal legislation?
A. That is correct and I think there needs to be a --
Q. Let me ask you --
A. -- federal-state partnership.
Q. Let me ask you one other question on that, if Falcone Hawkins was dissatisfied with the Federal Sentencing guidelines, should he go lobby the Senate Judiciary Committee to have that changed?
A. I don't work in that area. I can specifically tell you what goes on in the telecommunications industry.
Q. But I mean is it appropriate as a person in a quasi-judicial position to be lobbying a legislative body to change the shape and form of the laws that they're called upon to enforce and interpret?
A. I won't call it lobbying, but as far as providing information and as far as providing what the experiences in South Carolina, those who are in the know, I think, have a responsibility to let those decision makers know what the experience is or what the consumers need, the ordinary citizens in those particular states are up against.
Q. Are you not in the best place to do that now, Mr. McIntosh?
A. I don't think so. I think as a member of the Public Service Commission, you have certain authorities that I don't currently have. Right now, I just basically am there to represent the consumer's interests. As a Public Service Commissioner, you're actually a regulator. You actually will determine what the terms and conditions of that particular service is, what the rates are and actually have a key role in making the decisions and setting law. I have no authority as far as making law at this time.
Q. Let me ask you this, perhaps we, and this is my own personal viewpoint and not necessarily the viewpoint of the committee, but perhaps we disagree upon the function of these folks that serve on the Public Service Commission. Are they activists or are they quasi-judicial officials?
A. They are, but as far as if you get back to your issue of lobbying, they currently have an association, a national
-- National Association of Regulatory Utility Commissioners. And that national organization actually lobbies Congress.
They are a member of a national organization that has a lobbying wing and actually proposes resolutions that are submitted to members of Congress.
Q. Do you think it would be appropriate for you to be in Washington lobbying on an issue perhaps not even --
A. Well, I wouldn't be in Washington lobbying. It would be the national association, but you have input into the national association and direct them to carry out whatever the goals and aspirations of the members of the body.
Q. How about the concept of wheeling, what would be your position on that?
A. Are you talking --
Q. Wheeling to the retail level?
A. You're talking wheeling in the terms of electric power?
Q. (Nods in the affirmative)?
A. That's an issue that has come up in our agency. It's something that's being debated on a national level. Generally, what that is for large industrial users, in the first instance, it would give them the power to choose a particular power company that may be outside its service territory to obtain electric power from. Say, I'm in industry here in Columbia --
Q. What would be your position on that, though?
A. I think it's a good concept. I think there should be greater competition among the power companies. I think --
Q. Do you think the residential --
A. A greater choice.
Q. And the reason -- I'm not trying to interrupt you, but we're trying to move forward quickly.
A. Okay. But it's a complicated issue.
Q. If an industry has that option and residential consumers don't, isn't someone going to lose in that and the person that's going to lose going to be the residential consumer?
A. That's why the regulator has to be very careful with retail wheeling as you're describing it. In some instances, you're going to have stranded investment. Right now, you've got utility companies are investing to serve industrial customers, residential customers. If that industrial big user should purchase power from another company, you've got stranded investment. And who pays for that stranded investment, that's something that the commission has to seriously consider. There is a lot of national debate on that.
Our office has been involved in it. I don't have a firm position. I'm in favor of wheeling if it can be on a retail level to industries and individuals. I think that would be fine, but those are issues that are left for the commission and if you can do it in such a way that it is fair for all parties and give the end user that power, just as the end users you have right now on the telecommunications.
You have a choice of long distance service, even the small long distance user has a choice. I think the same thing should apply in the electric services. If the big customers have a choice, the smaller customers should have that choice also. I think the technology is moving in that direction, so that will ultimately happen and everyone would have a choice. But right now there is a big question of stranded investment and who pays for that.
Q. And, Mr. McIntosh, in terms of fiberoptic technology and telecommunications, I believe you participated or probably your department has participated in cases that were related to inclusion of that in the rate base?
A. That is correct.
Q. What is your position on that?
A. If the fiberoptics is used or if it has -- if it's used or useful to the end user, then the end user should pay for it. If fiberoptics is only going to benefit, say, a big customer as is the case right now. We've got several subdivisions around the state even here in Columbia where the builder wanted fiber in the subdivision, Bell Telephone has told the subdivision builder or the contractor that it will bring fiberoptic in if the contractor pays for it, if the individual home owners pay for it.
In a case like that, that's fine because the actual user of it is paying for it, but if you've got fiber to the home that an individual is not using, I don't think that individual should pay for it. The cost causer should pay the cost of the service.
Q. But isn't the theory behind the fiberoptic cable is to allow telecommunications to grow and if we had decided 50 years ago that we were not going to allow telecommunications to grow --
A. Well --
Q. -- there still may be an operator in every other home?
A. Well, I think if you look at the research with a copper wire, a lot of things that you can do with fiberoptics can be done with the current copper system and even video signals can come across the copper. And in many instance you don't need fiber in the home to provide the same services that many companies are saying you must have fiber to provide.
So the commission has got to really look at that and as I said, the cost causer should pay the cost of the technology. But if copper wire can give you the same benefits as fiber, why do we need to bring copper (sic) in the home so fast? We've got to be real careful because the cost of fiber is enormous.
You've got copper wire in the home, let's exhaust all possible uses of what's already available before we sink a lot of money into it or force individuals who may not use that new technology to pay for fiber. But my bottom line is let the cost causer pay for it.
Q. What is the environmental role of the PSC?
A. Well, I guess we -- in the environmental role, we may have to go water and sewer. On the water and sewer side, those are the big environmental issues right now. As far as the PSC is concerned, it regulates rates, terms and conditions of service of water and sewer companies. On the environmental side, there is quite a bit of testing that's been mandated by the Environmental Protection Agency and Department of Health -- and Health and Environmental Control in South Carolina.
Q. What is the role for the PSC directly whether it be water, sewer, electric or whatever?
A. Well, let's look at water and sewer, the role of the PSC would be to analyze what are actually those costs that are being borne by that particular water and sewer company and why with those regulations -- and if those costs are being borne, rates must be set to pass those costs on to the customer.
But we have to be very careful because there are certain technologies that will bring you beyond what are the minimum requirements by the Environmental Protection Agency and DHEC and then there are certain costs to be in minimum compliance, so you've got to determine what is the best -- and, again, that's water and sewer, but we can go -- if you want to go into it by industry, I can do that.
Q. Well, let's stop at water and sewer. Is it ever appropriate to go into demand side management for environmental purposes with water and sewer?
A. Well, demand side management and environmental -- that's possible. We haven't done much of that in South Carolina, but I think there is going to move -- be a movement to do that.
In the demand side management in water and sewer, there might be some things like requiring customers to purchase low shower heads. Use less water therefore creating less waste to be treated. So I think that would be appropriate, but our commission hasn't moved in that direction.
Q. Would you feel that would be appropriate if you were a commissioner?
A. I think it would. It's just something that has not been explored by our -- to my knowledge, by our commission. It's been more on demand side management on the electric --
Q. How about --
A. -- side and natural gas.
Q. How about rate setting to dissuade use or overuse of water?
A. I think we've got that right now. And if you look at some of the private utilities, they generally have the highest rates in South Carolina. And from my involvement with homeowner associations, every time those rates go up, they're use goes down, so rates do have an impact on demand.
As -- I mean you have that demand elasticity, as the price of the service goes up, but it decreases --
Q. But in that case, rates are not risen with the expressed purpose of managing demand side, is it not?
A. It's -- it's not a primary purpose, but it is, and I think any economist -- and I have a background in economics. Any economist knows for certain goods, if the price goes up, demand is going to go down and in talking with many of the executives with these water and sewer companies, they realize that.
Q. But would you advocate a position that you would make rates punitive enough that there would be less waste of water by residential consumers?
A. Oh, no. What we have tried to do in my office, if you look at the water and sewer companies regulated by this commission, generally they've got some of the highest rates in the state and some of the poorest quality of service in the state. And something that I've taken upon myself in many instances is to find or if the utility company -- water and sewer company is close to a municipal company, we've tried to work out arrangements whereby municipal would take over those customers and in every instance, we've been successful. Rates have gone down, the quality of service has gone up.
Q. Have those rates been subject to regulation by the Public Service Commission?
A. They are not.
Q. Who is the oversight mechanism then?
A. The --
Q. What happens ten years from then, will they go up?
A. When they're no longer regulated by the Public Service Commission?
Q. Right. Who --
A. You've got city council's. You've got --
Q. Who is the oversight then?
A. Excuse me?
Q. What is the method of oversight then?
A. What type of oversight? I'm not following you.
Q. For rates in a municipality, if it's not regulated by the Public Service Commission?
A. Currently, those rates are regulated by the mayors and town councils and --
Q. How do folks have an impact on that?
A. Well, if they live within the city limits, we have situations -- I've had several -- have had several situations where you had a private water company operating inside the city limits.
Q. How about if your folks like in the County of Orangeburg where your electrical power is supplied by the City of Orangeburg, but you don't have any participation?
A. That's an issue that's before the General Assembly and I get calls about that all the time that individuals who live out in the county and they are served by a municipal system, they have -- they call it taxation without representation.
There have been bills -- I think that's a function of the General Assembly. There was a bill, I know last year that would have -- those rates would have been regulated by the Public Service Commission, if they were passed.
But I know the large municipals, including the City of Columbia, most of their customers live outside the City of Columbia and I know they put up with something like that.
Q. Would it be part of your job as a Public Service Commissioner who is also a consumer advocate to lobby for passage of those laws or laws like that?
A. Well, if the General Assembly should request someone from
-- or an opinion of the commission and I know they request opinions of the Department of Consumer Affairs if all we would do was need to supply -- I would be in one of seven to formulate what the agency's opinion is, and if I were called or a staff member were called to testify, they would testify as to what the agency's position is. But it's left up to the members of the General Assembly to formulate legislation in our form of government.
Q. And maybe I misunderstand that, Mr. McIntosh, but I take from your earlier testimony that you're an agent for change and agents for change don't wait for consensus, they make things happens?
A. Well, sometimes change can make things happen. Sometimes change can improve what you're already doing.
Q. I know, but are you going to be the single person willing to come forward if you're elected --
A. Oh, no.
Q. -- to the Public Service Commission --
A. No.
Q. -- despite six other folks voting against you to come over here?
A. Oh, no. No, no, no. And I think they work as a consensus right now and what I would hope to do would be there able to build a consensus, and -- but I'm bringing to the group some unique circumstances whereas each of the seven members are bringing different perspectives to the same issue, and with those different perspectives, I think you can hammer out a consensus among the seven.
Q. Do you believe in majority rule?
A. I do believe in majority rule.
Q. What branch of government does the Public Service Commission fall under, Executive, Judicial or Legislative?
A. It's one of those as you said earlier, quasi-judicial branch, but under the way it was created, the setting of rates, terms and conditions of services for utilities was in the hands of the Legislature, so this is an extension of the Legislature. The Legislature has given the Commission this permission like in other areas, the Legislature has that responsibility, but it has chosen to create the commission as an expert body to hear such cases and to rule on those cases.
Q. What role would the PSC staff play after you got there?
A. Pretty much the same role that it plays right now. It advises the commission. Also it acts as a participant or a party in proceedings before the commission.
Staff actually has a set of attorneys, professional engineers, accountants, people with other backgrounds who actually present cases and present testimony by -- expert testimony before the commission. So they present their own position, but at the same time, which is I think quite unique, they also advise the commissioner, so they have dual hats.
Q. And some housecleaning matters very quickly, do you own any utility stock?
A. I do not.
Q. Does anyone in your household own any utility stock?
A. They do not. Now when you say utility, I mean I have mutual funds and there may be utilities in the mutual funds.
Q. Do you have a mutual fund that is oriented toward the holding of utility stock?
A. I do not.
Q. Mr. Chairman, we've reviewed Mr. McIntosh's credit and SLED reports. They are both -- indicate no negative entries. Have you had an opportunity to review your Personal Data Questionnaire Summary, Mr. McIntosh?
A. Briefly. Briefly.
Q. Were there any errors or --
A. Yeah, there was one error. You have Spring, 1985 for my law degree. It was actually Fall '85 when I finished the program.
Q. Do you have any plans to seek other office if -- should you be elected to this position or would you serve the full term?
A. I would serve the full term. No plans to run for any other elected office.
Q. And, finally, do you have any recommendations for improving the current system of screening for election to the Public Service Commission, what you're participating in today?
A. None that I can think of.
Q. Thank you, Mr. Chairman.
THE CHAIRMAN: Any questions? Representative Wilkes.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. McIntosh, I'm impressed with your obvious knowledge of this area.
A. Thank you.
Q. And also with the zeal with which you've approached this hearing today. One question does come to my mind that I would ask you to think about and answer and if the answer is no, then elaborate on that for me, if you would, please and the question is, is the ultimate consumer advocate, the ultimate business adversary?
A. No. No. They both can work hand in hand and I think if you look at my resume, I've worked both the consumer side and I've worked on the business side. There is one entry that -- in my fact -- the facts that are presented before you, when I worked for Congressman Derrick, I did a lot of industrial development work and Anderson County actually named a street after me for work in the industrial development area for attracting industry to South Carolina.
And I think in my role as a consumer advocate, we played a major role, I think, in the economic development of South Carolina by keeping rates low which has attracted industry. It's made it a good climate for industry to come in.
Q. So you don't think that your training as a consumer advocate would in anyway effect your objectivity in hearings before this commission --
A. Not at all.
Q. -- for the good of the whole state sometimes in the areas of industrial development?
A. I think it's for the good that I have a very varied background. I grew up on a farm. As you see, I'm still a one-fifth owner of our family farm and I go down there on the weekends.
So from that background, growing up in a rural area of South Carolina, I know the problems of the poor people of the state. I have worked in the business area. I know what the business environment is like. I've worked with consumers from poor consumers to the wealthiest consumers in South Carolina.
We represent all spectrums and I think I have a good handle as to what the people of South Carolina want and I think I have that to bring a balance to the commission having worked -- having a varied background.
Q. A long those same lines, in your service in state government, have you noticed as I have noticed a polarization of urban versus rural within this state and within this General Assembly possibly? And if so, what would your position on the commission be in matters that would effect this relationship?
A. Well, the -- I think the key issue in utility regulation, one area you have most of our residents -- most of your rate payers with big utility companies live in urban areas. Let's say, your electric companies, you've got a number of individuals in a rural area.
Years ago I think there was a commitment on the federal level and the state level, and I will give one example, the telephone industry that every household in America would have a telephone. That meant those individuals in urban areas and those in rural areas.
I don't think -- I think whatever services that folks in the urban areas are getting to as much as possible I think those in the rural areas should be offered it also. And that I think it goes --
Q. At comparable cost?
A. Excuse me?
Q. At a comparable cost?
A. At a -- well, at a comparable cost, when the commission regulates rates, we look at the -- they look at the total body of rate payers and they apportion the rates currently industrial customers and residential customers. I don't think we need to get in a situation where we have residential urban customers and residential rural customers. Right now, I think the commission is on the right path and that proper balance is there and everyone is treated fairly.
Q. Thank you.
SENATOR COURTNEY: Mr. Chairman?
THE CHAIRMAN: Senator Courtney.
EXAMINATION BY SENATOR COURTNEY:
Q. Mr. McIntosh, that's -- I would like to say that your appearance here, even at this late hour, has made an impression and I'm strongly impressed with your responses to the questions you've had?
A. Thank you.
Q. Would you just tell me in your opinion, if you feel comfortable doing that, how you feel the Public Service Commission has been as far as its flavor in the last few years? It is pro utility? Is it mutual pro consumer?
A. When I first started working for the Department of Consumer Affairs, I was shocked at how pro utility the commission seemed to be, but I think over the years there have been some changes in the membership of the commissioners.
We've moved more towards the center. And I think there has got to be a happy balance between setting rates, terms and conditions of service to keep the utilities operating in a reasonable mode, in a mode that is profitable or a reasonable profit, but at the same time providing that service to customers in a way that you don't overburden them because this is not a wealthy state.
Q. If I had any concern at all, not that it's any real concern, it would be expressed by Representative Wilkes about your ability to be for the utility, would that be a problem for you as you view those people coming before you?
A. It would not. I mean the commission has to operate on the facts and evidence that's presented to the commission and as a decision maker, you make your decision based on the facts as they -- that's my concept of being a decision maker. And whatever is presented, you weigh the facts and you make a decision based on the facts.
You don't go outside the record in front of you. And I think that has been a problem in what I've seen in my practice before the commission. Some of the orders -- if you look at the orders that have been reversed on appeal, the Supreme Court has said that that's --
Q. Thank you.
THE CHAIRMAN: Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Mr. McIntosh, I also want to thank you for being here today, waiting all day for this. Let me ask you a question similar to what Representative Wilkes asked and what Senator Courtney just asked. In your opinion, how do you view the relationship between the Office of Consumer Affairs and the Public Service Commission? Try to be as objective as you possibly can.
A. Well, I'll -- and I'll restrict that to my role as an employee of the Department of Consumer Affairs and how I approach what cases that I've argued before the department, my responsibility and I think the Department's responsibility has been to listen to the customer, find out what his or her aspirations are, or what is in his or her best interest and present that to the commission, but at the same time realize that there is a utility company there that's providing the service to that individual and that utility company has to have enough revenues to provide that service.
We hire experts in various fields to testify before the commission. They understand that and they advise us as to what is a reasonable level of rate to insure that the customers are able to pay and as well to ensure that the utility is able to continue to function as an ongoing concern. I think that has happened. I can't think of any cases that we've argued or that I've argued before the commission has the company has claimed that I've been unreasonable. The commission has claimed that I've been unreasonable and the rates that they're currently operating under have allowed them to continue. I don't think there is any utility in my memory, but since I have been at the Department of Consumer Affairs that was --
Q. Let me ask you briefly on this, if you can just respond quickly to me. How do you think -- what is your opinion of the Public Service Commission's opinion of the Consumer Advocates office? How do they view you guys?
A. I think some of them appreciate us being over there, but I mean that's just from the orders that I've read and the language in the orders some -- in many instances, they accept the positions that we put in front of them. So I will interpret that to say that they appreciate what we put before them, since they accepted our position on a number of items.
But as any attorney when you lose an issue -- lose a point, you may think sometimes that they may be biased against you. But as long as the commission uses the evidence in front of it and makes a decision based on what's presented to it, I have no problem with the decision maker and no -- no opposition to the decision maker.
Q. So they would not be nervous to hear that someone of your qualifications or background could possibly be on his way to the commission?
A. I don't think so. And as I said, we -- there is some new members on the commission and that I've been very comfortable with from the decisions or the types of questions that they asked during the proceedings makes me believe that they have a more balanced approach to utility regulation instead of being in favor of utility.
THE CHAIRMAN: Any other questions? Mr. Baker (sic), tell us, in your employment with the Consumer Affairs, do you do any other work with that agency other than appear before the Public Service Commission?
A. I've appeared before --
THE CHAIRMAN: Do you do any other type of work for any other consumer complaints?
A. I handle consumer complaints. I get one -- we're flooded --
THE CHAIRMAN: Mobile homes and those kind of things?
A. Excuse me?
THE CHAIRMAN: Complaints against mobile home dealers and those kinds of things?
A. I don't handle that area.
THE CHAIRMAN: I'm going to send some people to you, I believe.
A. I'll point them to the right division.
THE CHAIRMAN: I feel comfortable sending them to you.
REPRESENTATIVE WILKES: I think so.
EXAMINATION BY DOCTOR HATTON:
Q. You know, my colleagues have been so impressed with your extraordinary knowledge of this area, they haven't asked their typical questions. All day they've been asking questions of these candidates that I'm enjoying hearing and one of the them has been the temperament question, which has not been asked of you because we are all so very, I think, pleased to see you handle these questions so well and you really have been very extraordinary.
THE CHAIRMAN: We don't have to feel sorry for you.
Q. No, indeed not. But the temperament question is one that comes up because of what you do.
A. Right.
Q. You're an adversary, you're a lawyer and I have to ask the question of how you think your live is going to change if you move from the role you have now to the commissioner's role? How would you change the way in which you judge effectiveness? It's part of the question that's been asked around the edges of.
How would you change the notion of what it means to be effective in your new role and what kind of temperament style changes would you have to try to effect and how comfortable are you with the need to do that?
A. I understand your concern. A part of my role -- I don't think I placed it in my application. I think I may have overlooked it. As an employee with the Department of Consumer Affairs as an attorney, I've also served as a hearing officer, but not in the utility area.
Our agency also regulates pawn brokers and several other industries that are nonutility regulators, so sometimes attorneys in my division have to sit as hearing officers. Steve Hamm is the administrator and a hearing officer generally, but if he's not available, one of the attorneys is assigned.
So I've been in that situation where I have had to be the impartial regulator and make a decision based on what has been put in front of me. I've been in a situation where the advocate has been a fellow attorney in the office that I deal -- in another division, but that I know personally and the company has been represented by attorney from the outside. And it's -- I won't say a peculiar situation, a unique circumstance when you're put in that role and you've got to listen to both sides.
You've got to put all your prejudices behind you and make a decision based on the facts in front of you and not bring anything that's not brought in -- into the proceeding. I think I'm able to do that. I've been in situations where I have had to do that. But it -- it's
-- in some ways it can be difficult because we all bring personal backgrounds and individual prejudices to any environment or any type of situation that we're in when we're trying to weigh the facts when we have two adversarial parties.
My father was a school principal and I can remember growing up many times, you'd have one child saying one thing, the other child says another thing and you just have to step back and just find some type of inner strength to leave those biases somewhere else and just concentrate on the facts in front of you and I think it's a difficult question, but I go back to just my varied background that I've had experiences in numerous areas. And I think with that I'm able to divorce myself from my role as an advocate and become the impartial hearing officer, impartial judge.
Q. Right. I think it's less like being a judge because you're not a solitary decision maker. You're working with a body and that's the area --
A. The one --
Q. -- in which the change would be required much more so as a collaborator and a colleague. And I hear you grappling with the question and this is I think --
A. Well, I would bring a -- something unique to the table, but each of the seven commissioners will bring something unique.
Q. Right.
A. And they all will have to be mindful of being unbiased, but at the same time you're an individual and you bring certain individual qualities to the table. But I think in that collaborative process, the give and take among the seven individuals, a consensus, I think, can be made and built. As you see in my background, I know how the commission works.
Q. You do.
A. I've worked with the staff members over there. I've worked with all of the current commissioners. And I think we have a very friendly relationship. They know generally what our position is on various issues. The witnesses before the commission are generally the same. You don't find too much change in the witness -- the experts that appear. There are not that many utility experts nationwide, so they're generally the same individuals. And everybody is -- it's pretty much a family type environment because everyone knows each other.
I think I can -- again, I come from a different background, but in any type of decision making -- a situation like that, I understand that I've got to leave those biases at home and just make a decision based on the facts in front of me.
Q. Thank you.
MR. COUICK: One short question from staff, if I could, Mr. McIntosh.
RE-EXAMINATION BY MR. COUICK:
Q. Have you ever made a motion for recusal of any member of the PSC?
A. I never have.
Q. Would you see that if there was a member that had formally worked for SCE&G, would you make a motion for that person to recuse himself or --
A. It depends on what type of work they've done.
Q. If they were an attorney for SCE&G or perhaps a CEO for SCE&G, would you ask them to recuse themselves for a rate making case involving SCE&G?
A. If it's a case that they have some type of direct involvement or had some direct involvement, I would have to strongly consider that, but I'd have to see the facts of the situation.
Q. We've debated this issue of whether PSC commissioners are judges or not. I ask the question of the Canons for Ethics for judges, they are called upon to recuse themselves any time a former partner or associate in their law firm appear before them even if that's a public agency.
In fact, Judge Goolsby recused himself from a whole lot of cases involving the State for about five or six years there. Would you have to recuse yourself every time the Consumer Advocate appeared before the PSC?
A. What I would do would be to ask the Attorney General's office for an opinion.
Q. Probably get two.
A. Excuse me.
Q. You probably could get two.
A. But I mean that's how I would handle --
Q. What's your opinion, though?
A. I've not -- never thought about that until right now.
THE CHAIRMAN: Don't think about it.
A. I would seek help from someone who has greater knowledge about this issue than I do before making the decision, but on its face, I would be very skeptical of having someone who has worked very closely on this issue actually making a decision on it.
Q. Thank you.
SENATOR JACKSON: Wait until '95, the Attorney General will have to recuse himself on everything.
Q. Mr. Chairman, that's all for this witness we have.
THE CHAIRMAN: Thank you so much, Mr. McIntosh.
A. Thank you.
THE CHAIRMAN: I hope they haven't dealt too severely with you. Next.
1. Carl F. McIntosh
Home Address: Business Address:
862 Stebondale Road S.C. Dept. of Consumer Affairs
Columbia, SC 29203 2801 Devine Street
Columbia, SC 29250
2. He was born In Fairfax, South Carolina on June 29, 1959.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *********.
S.C. Voter Registration Number: 6 566 083.
4. He is single.
6. He graduated from Allendale-Fairfax High School in 1977; attended S.C. Governor's School at the College of Charleston in Summer 1976; completed 2 undergraduate courses as a student in the summer pre-college program at Hampton Institute (Hampton, Virginia) in 1977; completed 9 undergraduate credit hours of economics at Yale (New Haven, CT) as part of the American Economics Summer Program in 1980; completed 3 undergraduate Arts and Sciences courses at Fisk University (Nashville, TN) in Spring 1981; attended Vanderbilt University (Nashville, TN) from Fall 1977 to Spring 1981 and received a B.A. with a double major in economics and political science; attended Georgetown Law School (Washington, D.C.) from Fall 1981 to Spring 1982 and Fall 1983 to Spring 1985. He received a Juris Doctorate in Fall 1985.
9. He was a substitute teacher for Allendale County Schools in May 1978 and May 1979. He assumed all responsibilities of teaching grades 3-12. He was an Assistant Debate Coach for Allendale County Schools from Fall 1980 to Spring 1981. He performed as a judge during debate tournaments and assisted students in preparing debate cases and evidence.
He was an intern for The Honorable Strom Thurmond in Summer 1979 (Washington, D.C.). He assisted staff members in various office activities.
He was a Teaching Assistant for an introductory economics course in the Department of Economics at Vanderbilt University (Nashville, TN) from Fall 1980 to Spring 1981.
He was a clerk at S.C. Occupational Information System, Columbia, SC in Summer 1981; an intern with The Honorable Ernest F. Hollings, U.S. Senate, in Summer 1982; and a professor at Howard University in Washington, D.C., where he taught an undergraduate speech and communications course in Spring 1987.
He was Legislative Aide and Special Projects Director for The Honorable Butler Derrick, U.S. House of Representatives, from September 1982 to September 1987. He coordinated research and the preparation of correspondence and advised Representative Derrick on potential orders and rules promulgated by all federal agencies. He also advised Representative Derrick on issues pending before the House Judiciary Committee and the Committee on Transportation and Public Works.
He was an Assistant Solicitor for the Second Circuit from October 1987 to March 1988 and has been a Senior Attorney with the S.C. Department of Consumer Affairs since April 1988. He litigates telecommunications, natural gas, electric power, water, sewerage, and transportation retail rate cases before the S.C. Public Service Commission and S.C. Appellate Courts. He also litigates electric power wholesale rate cases before the Federal Energy Regulatory Commission and represents the Department in proceedings before Congress, the S.C. General Assembly, the S.C. Insurance Commission, and the Federal Communications Commission.
10. He is a 1/5 owner of the family farm located in Allendale County.
19. Please see answer to Question 9 for this information. The following served as Mr. McIntosh's supervisors:
S.C. Department of Consumer Affairs: Nancy Vaughn-Coombs
Second Circuit Solicitor's Office: Robert Harte
Office of The Honorable Butler Derrick: Leo Coco
Howard University: Mary Myers-Montgomery
Office of The Honorable Ernest F. Hollings: Ralph Everette
S.C. Occupational System: Carol Kososki
Vanderbilt University: Professor Burkhouser
Allendale County Schools: Joseph Siren and Charles Harney
22. In seeking the office of Public Service Commissioner, he has spent $31.50 for clippings from The State, $3.10 for Kinko's fax service, $5.00 for Downtown Printers' fax service, and $248.33 for Kinko's typesetting and printing.
26. Professional organizations: S.C. Bar Association and the Columbia Lawyers Association.
27. Civic, charitable, etc. organizations: He serves as a trustee for St. Paul Baptist Church in Winnsboro, South Carolina.
28. He has practiced before the S.C. Public Service Commission for the past 5 and 1/2 years as a Senior Attorney with the S.C. Department of Consumer Affairs. During that period, he has successfully argued cases that resulted in saving South Carolina rate payers millions of dollars. He has also attended numerous seminars sponsored by the National Association of State Utility Consumer Advocates and the National Association of Regulatory Utility Commissioners. These courses have kept him apprised of all national trends in the field of utility regulation. He is currently a member of the National Association of State Utility Consumer Advocates' Natural Gas and Water Committees. In 1987, the Anderson County Industrial Development Board named a street in his honor for his assistance in achieving its industrial development goals.
29. Five letters of reference:
(a) The Honorable Ernest F. Hollings
126 Russell Senate Office Building
Washington, D.C. 20510-6121
(b) The Honorable Butler C. Derrick, Jr.
221 Cannon House Office Building
Washington, D.C. 20515-4003
(c) The Honorable Steven W. Hamm
Administrator, S.C. Department of Consumer Affairs
2801 Devine Street
Columbia, SC 29250-5757
(d) Susan Berkowitz, Esquire
Co-Director, South Carolina Legal Services
P.O. Box 7187
Columbia, SC 29202
(e) Patricia S. Sanders
Vice-President, S.C. State Credit Union
800 Huger Street
Columbia, SC 29202
30. He is seeking the position of Public Service Commissioner for the Second District.
MR. COUICK: Sir, go ahead and take our your driver's license and --
MR. MOSELEY: I made a copy of all that for you. Is that okay?
THE CHAIRMAN: That'd be fine.
MR. COUICK: Mr. Moseley, if you would please raise your right hand.
C. ROBERT MOSELEY, having been duly sworn, testified as follows:
MR. MOSELEY - EXAMINATION BY MR. COUICK:
Q. Mr. Chairman, in reviewing Mr. Moseley's driver's license, it indicates that he lives at 137 Jefferson Place, Columbia, South Carolina, 29212. His voter registration card indicates the same place of residence. I believe that is a Columbia address, but a Lexington County residency; is that true?
A. Yes. Irmo area.
Q. Mr. Chairman, we have had the opportunity to review Mr. Moseley's credit report and also the report from SLED. Both were negative in the sense that there was no negative information on the reports.
Mr. Moseley, please state for the record your full name?
A. Charles Robert Moseley.
Q. What is your interest in running for the Public Service Commission?
A. To serve the area, the community and the state.
Q. What are the one or two major issues that you would see being before the Public Service Commission or should be before the Public Service Commission at this time? What issues do you think are important? What would you like to accomplish?
A. Well, I think we need to have a fair representation for the public taxpayers and also for the corporations on the other side to come before the Utility -- of the Public Service Commission.
Q. Mr. Moseley, do you own any utility stock?
A. No, sir.
Q. Does your wife or anyone in your residence own any?
A. No, sir. If you remember my statement, I think I sold -- and I sold everything in the last week. I think you've got an amendment to that now.
Q. I hope you sold at the right time.
A. Well, I took a loss.
THE CHAIRMAN: You sold your stock after you decided to run for the Public Service?
A. Yes. I think it's all attached to that.
Q. Mr. Moseley, you indicate on your Personal Data Questionnaire that from 1979 to the present, you serve as the president and CEO of the Irmo Insurance Agency; is that correct?
A. Yes, sir, that's correct.
Q. And before that time, you had worked in banking in various capacities including Southern Bank, the Hampton County Bank and before that with the South Carolina Board of Financial Institutions as a bank examiner; is that correct?
A. Yes.
Q. And before that you were with South Carolina National Bank as a customer service representative?
A. That's correct.
Q. So you've been involved in banking or insurance since 1960?
A. That's correct.
Q. What areas of expertise aside from your business expertise would you bring to the committee today that would suit you well for service on the Public Service Commission? You obviously have extensive business experience --
A. Yes, sir. Well --
Q. -- in addition to --
A. -- being able to communicate with people in the public I deal with every day and my background in church and civic groups and everything. My contact with the public, people.
Q. The Irmo Insurance Agency that you serve as president and CEO are there any other partners in that?
A. I own 100 percent of the stock. My son is 25 years old. He's a licensed insurance agency -- agent and I have, you know, ample staff in there, too.
Q. Do you plan to continue to work in that agency should you become elected?
A. No, sir, I would plan to devote my full service to the Public Service commissioner.
Q. Would you maintain ownership of 100 percent of the stock?
A. I would sell it to him or give it to him. He's my only son.
Q. Do you insure any utility companies at this time?
A. No, sir.
Q. Have you been actively involved within the last three or four years with any political campaigns, Mr. Moseley?
A. I'm a friend of Rick Quinn.
Q. Okay. Any other campaigns?
A. No, sir. I was trying to get a fellow elected to the town council for Irmo, but we didn't do too good.
Q. Are you related to any person -- a member of the General Assembly or any employee of the General Assembly?
A. No, sir. I'm the only child.
Q. Mr. Moseley, are you familiar with the concept of wheeling for wholesale sale of electrical power, wheeling w-h-e-e-l-i-n-g?
A. Repeat that question.
Q. Are you familiar with the name or the concept of wheeling, w-h-e-e-l-i-n-g, of wholesale electrical power?
A. No, sir, I am not.
Q. Are you familiar with the term lata, l-a-t-a?
A. No, sir.
Q. As it relates to telephones?
A. No, sir.
Q. If persons who are on the Public Service Commission wear various hats and one of those hats being perhaps traffic cop, one being administrator over the personnel of the agency and the other one being public relations and the final one being judge, which one would you see yourself wearing most often in day to day affairs of the commission?
A. Oh, that would be a tough question.
Q. Well, that's why we ask it.
A. It would be -- I would think it would be part judge, part public relations and try to weigh the facts on every day decisions.
Q. In terms of being a judge, what particular responsibilities do you have to the public and to the utility industry? How do you weigh those difficult decisions?
A. I think that you have got to be fair to the public in representing them and also you've got to be fair on the other side to the utility companies that come before you. It kind of puts you in the middle there, but you have to be fair to both sides. Fair.
Q. On environmental matters, what would be your approach on that and how important is the environment to the extent that it may effect the rates of the cost of service offered to consumers?
A. You have got to look at the environment and how it effects us in our every day lives. But you have -- try to correct it and see that we all live in a clean environment and everything. And on the other side, you've got to monitor the other side that they're including --
Q. Mr. Moseley, have you had an opportunity to review your Personal Data Questionnaire Summary?
A. Yes, sir. Well, I got it today at 3:00 o'clock. I didn't get it this morning because you told me I didn't have to.
Q. Right. Have you had an opportunity to review it?
A. Yes, sir.
Q. Are there any corrections you would like made on it for the permanent record?
A. Well, when I presented my Personal Data to you, down at the bottom, Number 14, that's supposed to be Unisun Insurance Company.
Q. That's U-n-i-s-u-n?
A. Yeah, Insurance Company. And then, see, you've got a South Carolina Department of Consumer Affairs, it should be Consumer Credit which is an advisory status.
Q. Do you have any recommendations for this committee so as to improve the current system of screening for candidates for the Public Service Commission?
THE CHAIRMAN: That's hitting below the belt.
A. Yes, sir. This is the first time I've ever been before any type of screening committee like this, so I just -- you know, I don't know how they operate. I mean this is the first time I have been in this, so I would -- I appreciate you telling me not to be here until 3:00 o'clock.
Q. You're the only one that asked.
A. Well, it's a long, long drive from Irmo.
Q. Thank you, Mr. Moseley. I appreciate it.
THE CHAIRMAN: Any questions from any members of the committee? Mr. Wilkes. Representative Wilkes.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. Moseley, in your capacity of -- or when you wear your judge's hat, obviously temperament comes into play in this and it is a very important personal quality to have. When issues of advocacy and adversely come out, do you consider yourself an emotional person or a logically driven person?
A. I think logically driven. If you're in the insurance business and you have claims like I have, you're on both sides of the fence and you have to keep people happy and you can't get upset. You've got to service them and satisfy them.
Q. Have you given any thought to issues in the state that would -- that might set the urban and the rural areas against one another? And if so, have you ever given any thought as to what your position might be? If you had to make a decision that was either going to benefit one or the other, do you feel that you could be objective? Have you ever lived in --
A. Yes, I've lived in --
Q. -- a rural area?
A. Varnville, South Carolina which had about 1100 people and I grew up in Columbia, so I've been in a small area and a large area.
Q. And you feel like then you could be objective about in --
A. Yes, small town --
Q. -- looking at small town situations?
A. -- and large city, yes, sir. I have no problem with it.
Q. Thank you.
THE CHAIRMAN: Any other questions by any members of the Committee? Thank you, Mr. Moseley. You may be excused.
A. I appreciate it.
THE CHAIRMAN: Thank you. Sorry we kept you -- it took so long?
A. No problem. I just didn't want to -- I didn't know how ya'll would be.
1. Mr. Charles Robert Moseley
Home Address: Business Address:
137 Jefferson Place P.O. Box 147
Columbia, SC 29212 Irmo, SC 29063
2. He was born in Augusta, GA on October 30, 1940.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *********;
S.C. Voter's Registration Number: 6144882.
4. On October 24, 1992, he married Lisa Van Austin. He has one child: Robert Scott Moseley, age 25, insurance agent.
5. Military service: S.C. Air National Guard, Rank Airman 2nd Class, Honorably Discharged in 1967.
6. He graduated from Eau Claire High School in 1959, and attended Columbia College from 1960 to 1962. He graduated from South Carolina Bankers School in 1971, and graduated from the Louisiana State University School of Banking in 1973.
7. He served as Business Manager for the Town of Irmo in 1979, and on the Council of Advisors of the SC Department of Consumer Affairs from 1990 to present.
9. He worked in customer service at SCNB from 1960 to 1964. He was a bank examiner from 1964 to 1969. He was a loan officer from 1969 to 1972. He served as Vice President and City Executive for Southern Bank and Trust from 1972 to 1979. From 1979 to present, he has acted as president and CEO of the Irmo Insurance Agency, Inc.
10. He is currently president and CEO of the Irmo Insurance Agency, Inc., the sole shareholder of Lexington Insurance Agency, Inc., a 50% partner in New Gibbes Partnership, the owner of the land and building for Irmo Insurance Agency.
14. A small claim ($588) for automobile damages was incorrectly placed against the Irmo Insurance Agency. The correct defendant is the Unison Ins. Co. (An attorney's letter is attached to questionnaire).
22. He has spent $175 on stationary, $58 on postage, and $25 on telephone calls.
26. Professional organizations: Independent Insurance Agents of South Carolina; Independent Insurance Agents of Greater Columbia (board member 1993); Home Builders Assoc. of Greater Columbia.
27. Civic, charitable, etc. organizations: McGregor Presbyterian Church of Irmo (elder); Council of Advisors, Department of Consumer Affairs; First Citizens Bank - Irmo Advisory Board; Irmo Ruritan Club (program chairman); Lake Murray/Irmo Rotary Club; Woodmen of the World Lodge #2; Ballentine Fire Commission (founding chairman); Irmo Planning Commission (former member); Central Midlands Regional Planning Council (former member); Columbia Area Mental Health Center (former board member); Ballentine Civic Assoc.
29. Five letters of reference:
(a) Dan S. Judd
P.O. Box 68
Irmo, SC 29063
781-2103
(b) Raymond S. Caughman
P.O. Box 8
Lexington, SC 29071
359-5111
(c) John Gibbons
P.O. Box 343
Irmo, SC 29063
781-2223
(d) Charlene Meetze
P.O. Box 1577
Irmo, SC 29063
781-7894
(e) Dan Randall
P.O. Box 2207
Irmo, SC 29063
781-1540
30. Second District.
THE CHAIRMAN: Thank you. All right, ladies and gentlemen, see you back in the morning about 10:00 o'clock.
(The proceedings adjourned at 6:05 p.m.)
THE CHAIRMAN: Mr. Couick.
MR. COUICK: Mr. Chairman, we'd like to have the committee call Ms. Margaret Reese to the stand as well. Mr. Chairman, while she -- Ms. Reese is coming forward, if you could repeat some of the ground rules the committee had laid out yesterday.
Ms. Reese, please take the chair on the far end of the witness box here. It'll probably be more comfortable. And if you would take out your driver's license and/or your voter registration if you have it with you. Ms. Hammond will take those from you.
MS. REESE: Do you want them?
MR. COUICK: Yes, ma'am. Ms. Hammond will get them. Anyone who is present that is affiliated with a candidate, they will need to recuse or sequester themselves this morning as well as other candidates. If we could have -- Ms. Reese, if you would raise your right hand.
MARGARET B. REESE, having been duly sworn, testified as follows:
MS. REESE - EXAMINATION BY MR. COUICK:
Q. Good morning.
A. Good morning.
Q. Ms. Reese, I'm reviewing your driver's license now and it indicates that you live at 430 Yachting Road in Lexington. That's 29072. Your voter registration lists the same address; is that correct?
A. That is correct.
Q. And that is in Lexington County?
A. Yes.
Q. And you've applied for the Second Public Service Commission District seat?
A. Correct.
Q. Ms. Reese, would you -- you've had an opportunity to review your Personal Data Questionnaire Summary this morning. Was it correct? Were there --
A. Yes.
Q. -- any things you'd like to correct on it?
A. No. It is correct.
Q. Would you have any objection to that being entered as a part of the permanent record of these proceedings?
A. No, I would not.
Q. Thank you. Please tell the committee what has brought you to the point of applying to be elected to the Public Service Commission? What's propelled you to --
A. There are several things I would like to accomplish as a commissioner. I want to make sure that utility companies do prosper financially and have the resources available to attend to future needs. This cold weather --- and I read that some utilities are having to cut back. I'd like to make sure that we are assured of continued warmth.
I also would like to prevent the crises that we experienced in the seventies, that situation. I am representing the middle class. The majority of my bills that come in each month are regulated by the Public Service Commission and I would like to represent the middle class.
Q. Ms. Reese, you have had a very broad education. I believe you attended Converse College. You completed your baccalaureate studies, I believe, at USC and also received a master's in education I believe at USC; is that correct?
A. Right.
Q. And you have spent most of your employment as a public school teacher, I believe?
A. Correct.
Q. For approximately 21 years?
A. Correct.
Q. Are you now retired from education?
A. No, I'm not.
Q. Are your currently teaching now?
A. Yes.
Q. What subjects do you teach and at what school do you teach?
A. I teach at Irmo High School. I teach English. I have taught other subjects.
Q. You at one point owned and managed a children's clothing store. Do you have any other business interests at this point? Do you have any ownership interest or investment interest in other businesses?
A. No, I do not.
Q. Do you own any utility stock?
A. No.
Q. You're married, I believe, to a Mr. Michael Seigler; is that correct?
A. Correct.
Q. Does Mr. Seigler own any utility stock?
A. He does not.
Q. What is Mr. Seigler's employment?
A. Cameron and Barkley hired as a salesman, outside salesman.
Q. Cameron and Barkley is what type of business?
A. Industrial electrical supplies.
Q. Do they from time to time sell anything to a regulated utility?
A. He's in the industrial division. I think the electrical side would sell to South Carolina Electric and Gas, for example. He is not involved in the electrical side.
Q. I'm going to say that one more time, he is not involved in electrical sales?
A. Correct.
Q. Would any part of his salary be dependent upon commissions that would be derived from a sale of electrical products to SCE&G or some other regulated utility?
A. No. He is on commission, but he does not deal with the electrical division.
Q. Please tell me once again, what does he sell at Cameron and Barkley?
A. Industrial supplies. Drills and saws and --
Q. I understand now. What would you say would be the one or two major issues confronting the Public Service Commission at this time?
A. I think the telecommunications battle that's brewing is going to be troublesome. We've gone through so many facets and antiquated laws that date back 20 or 30 years that do not cover what we're now seeing. The Information Highway that's available, I see that as a problem.
Q. Yes, ma'am. Is there a second issue that you would see as a major issue?
A. I'd like to concentrate on that one.
Q. What -- how -- what type of legislative authority does the Public Service Commission have today that they're either utilizing or not utilizing to properly regulate telecommunication utilities? I believe you said there were antiquated laws.
A. None have been passed, I know that. And I just know that changes have been made and we have so much more available to us today. The optic fiber --
Q. Right.
A. As far as the regulations is the only thing that comes to mind now because I'm nervous.
Q. I see. Would you like a glass of water or coffee or anything?
A. No. It would be the antitrust laws. I cannot answer.
Q. Yes, ma'am, I understand. And please understand that part of the interview's purpose is to kind of plumb your experience and that's not to say that you don't have certainly enough experience because we're looking for a broad experience not necessarily a specific experience.
A. Thank you.
Q. What role should the PSC staff play in not only rate regulation, but other matters that come before the commission?
A. Just to see that the services are carried out, the bookkeeping, the facilities, issuance of securities. Did I answer your question?
Q. Yes, ma'am. You wear lots of hats in the classroom. I know, my wife is a teacher. My mother was a teacher for 38 years. And you're sometimes traffic cops, sometimes you're instructor, lots of times you're a friend and I would imagine that Public Service Commissioners wear lots of different hats. Some that come to mind are traffic cops again, some are public relations hats that they wear from time to time, others are that they may serve in the position of being an agency director or executive managing the agency and the other would be as a judge. Which hat do you think you would be most often called upon to wear in your services as a Public Service Commissioner?
A. I think my communication and negotiating skills, research skills.
Q. So you would see yourself in terms of time commitment most often doing public relations work on the --
A. I see that as the ombudsman's position of taking inquiries and complaints. Also investigating compliance.
Q. You mentioned a few moments ago that you kind of saw yourself as sort of a quintessential consumer. I'm not trying to put words in your mouth, but that was kind of the gist, I believe, of what you said. You came from that background. You bought electricity now and you would go on the commission with the strong feeling of being consumer driven. Is that fair summary of --
A. You might want to call me a Tweener.
Q. All right.
A. I'm some -- I also want the utilities to prosper in order that we prepare for the future needs.
Q. Mr. Wilkes has asked an interesting question from time to time and I'm going to steal it from him for the purpose of your interview. In hard economic times, those times effect both individuals and corporation and it's kind of like, you know, the chicken and the egg which comes first. Sometimes it's hard to tell.
If you had a rate increase request from a utility, let's call it SCE&G for simplicity, and they needed a rate increase that was justified to the extent that they were not going to be able to make money, the proper amount of money in return for their investors. But at the time they made the request, it was hard economics in South Carolina in their service area. Folks were being laid off and folks were having a hard time because the economy was not strong. What would be your thought process as you went about deciding whether to grant the rate increase or not?
A. I would have to remember that the middle class is employed by corporations and if it were needed -- a rate increase were needed to keep the power going, whatever company that might appear before you, I would have to consider that first. Only in Columbia, we, State employees throughout the state are dependent on the corporations.
Q. Mr. Chairman, for the benefit of the committee, a credit check and SLED check have been made of Ms. Reese and they both came back negative in the sense that there were no negative entries on either one.
Ms. Reese, is there anything else that you would like the committee to know about you that would tend to convince them that you're the right person to serve on the Public Service Commission at this time?
A. You're probably all wondering why I'm here. It seems to be totally out of my field. I am looking for a challenge. I've taken challenges before. You note on my record that I did start a business in the seventies. I started with $500. In a year's time, I was paying bills over $5,000 a month and taking home a salary. I am successful. I am a successful person. I took over the running of the yearbook knowing nothing about knowing art, nothing about photography. In two years time, my book won the highest award possible in South Carolina.
Q. Congratulations.
A. I'm a success oriented.
Q. Thank you. I've had a note passed up here to me from one of the committee members that I wrongly attributed my question on hard times to Mr. Wilkes when, in fact, it was Senator Courtney. Senator Courtney wanted credit for that.
A. You stand corrected.
Q. And, finally, Ms. Reese, do you have any recommendations for this committee to improve its screening process? While you're in it, have you noticed anything that you would like improved?
A. If I'm going to be asked technical questions, I would like access to them, but so far I haven't been asked. It bothered --
Q. Would you like some technical questions.
A. -- me in coming in here this morning.
Q. And I'll be glad to ask you the technical questions?
A. That's all right. But I do have the ability to find the answers.
Q. Yes, ma'am. I understand that. I had inquired somewhat earlier in the technical aspects of it, didn't really delve much deeper. I appreciate it. Mr. Chairman, that's all of your counsel's questions.
THE CHAIRMAN: Is there any question from any other members of the committee? Senator Courtney.
EXAMINATION BY SENATOR COURTNEY:
Q. Thank you, Mr. Chairman. Ms. Reese, being a school teacher, what level do you teach? High school?
A. Yes.
Q. If you had to explain to your class what the Public Service Commission was and what the commissioners do, how would you explain that to them?
A. That the commission is comprised of seven commissioners who care about the development of the state and care about the individual. They care about corporations. They care about utilities and they stand as a referee in disagreements.
Q. What kind of disagreements?
A. Rate increases. Development, such as I mentioned in the telecommunications and power. They are there to oversee. Not police, but to oversee.
Q. What responsibility does the Public Service Commission have to do with protecting the environment?
A. The environment? Part of the -- we do -- you do enforce
-- the Public Service Commission enforces at Data (phonetic) Safety Act, the boundaries and we're concerned about the nuclear aspect of utilities.
Q. Let me ask you some other questions related to your husband's employment. You said he did not sell electrical parts and so forth, that he was in industrial supplies. Does he sell industrial supplies to any regulated utilities?
A. Can I get back to you on that? I do not know.
Q. Okay. That's fine. You also mentioned the antiquated laws and Mr. Couick asked you about that. And I think I heard you say antitrust laws. Would you just explain that a little more deeply? What do you mean by antiquated laws and what changes need to be made? What do you mean by antitrust laws?
A. I don't believe I can answer that question to your satisfaction. I had an article I was reading and if I brought it with me, may I refer to it?
Q. Sure.
A. Companies that have been responsible for some services are now going to be faced with other options, the video aspect. I don't know of any law that regulates such because that was not in existence 10, 15, 20 years ago.
Q. So you're talking about --
A. I do not have a particular law that I'm concerned about, if that's what you're asking.
Q. We need to update our laws, is that what you're saying to make sure we're covering --
A. We're going to have to --
Q. -- new technology and all? You also mentioned, I think you did, responsibility of securities, issuance of securities or did I misunderstand you?
A. When I was asked the function of the PSC?
Q. Yes, ma'am.
A. On the information that I was sent or available in one -- one of the handouts. It reads that the Commission is responsible for the regulation and supervision of investor owned electric utilities as to rates and charges, practices and issuance of securities.
Q. What was your concern, though, about the responsibility for the issuance of securities? Is there something that you've seen that causes you concern or you're just saying that is just a part of your responsibilities?
A. I thought I was answering that question as part of the responsibilities.
Q. That's fine. And, Ms. Reese, one final question.
It is something we have asked everybody and I notice in
your questionnaire that you, say, stress your uninvolvement with politics, but do you or have you had any involvement with any member of the legislature as
far as helping in their campaign the last four to six years, working in campaigns or contributing to any candidates who are current members of the General Assembly?
A. I have not.
Q. Thank you. Thank you, Mr. Chairman.
THE CHAIRMAN: Any other questions from any other members of the committee?
MR. BILTON: I have one, sir.
THE CHAIRMAN: Okay.
EXAMINATION BY MR. BILTON:
Q. Ms. Reese, you mentioned back in the seventies you didn't want the same problems to reoccur. Was there anything in particular?
I was still in school in the seventies and I don't remember.
A. Well, I was a divorced mother of two trying to pay bills on a school teacher's salary and I couldn't pay the utility bill. It was sky high for my income.
Q. You were speaking primarily about the economy then more or less?
A. I think the economy was greatly influenced --
Q. I know interest rates were high and everything else back in those days.
A. So were the utility rates.
Q. I agree. One other question, I don't think Mike asked you, if you were elected, what would you do with your present job? Would you continue or would you --
A. No, I would not.
Q. Thank you.
A. I see this as a full time job with much research to be done.
THE CHAIRMAN: Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Ms. Reese, let me thank you for agreeing to offer
as a public servant. Let me ask you one question as it relates to the information on your Personal Data Questionnaire. You stressed your uninvolvement in politics. Why was it necessary in your mind to stress your uninvolvement in politics, do you think?
A. I was searching -- I am squeaky clean. I think that is a merit.
Q. You don't think politics is squeaky clean, is that --
A. You didn't have to investigate me.
Q. Okay. Thank you.
THE CHAIRMAN: Any other questions? Thank you very much, Ms. Reese.
A. Thank you.
1. Margaret B. Reese
Home Address: Business Address:
430 Yachting Road Irmo High School
Lexington, SC 29072 6671 St. Andrews Road
Columbia, SC 29212
2. She was born in Anderson, South Carolina on February 25, 1942.
Social Security Number: ***-**-****.
3. South Carolina Driver's License Number: *******.
South Carolina Voter Registration Number: 0 652 833.
4. She married Michael S. Seigler on September 7, 1986. She has two children: Margaret L. Reese, age 31 (Professor at St. Olaf in Minnesota) and Jesse Timothy Reese, age 29 (insurance sales).
6. She attended Converse College from 1960 until her marriage in 1962; received a B.A. at the University of South Carolina (1968-1969); and received a M.Ed. from the University of South Carolina in 1983.
9. She was the owner/manager of a children's clothing store from 1975 to 1977 and a public school teacher for 21 years, from 1971 to 1993.
26. Professional organizations: National Education Association; National Council of Teachers of English.
27. Civic, charitable, etc. organizations: PTA (Irmo schools); Columbia Shag Club.
28. She stresses her un-involvement in politics, her ability to learn and research, and her simple financial status.
29. Five letters of reference:
(a) Ms. Pat King
438 Yachting Road
Lexington, SC 29072
(803) 957-6494
(b) Ms. Linda Sligh
308 Century Drive
Columbia, SC 29212
(803) 772-6833
(c) Becky Costner
Branch Manager, Columbia Teachers FCU
P.O. Box 5846
Columbia, SC 29250
(803) 732 2348
(d) Ms. Lisette Johnson
1425 Saluda River Drive
West Columbia, SC 29169
(803) 796-9556
(e) Robert L. Rollings
240 Jamil Road
Columbia, SC 29210
(803) 798-8757
30. She is seeking the position of Public Service Commissioner for the Second District.
THE CHAIRMAN: I think you've done a -- next.
MR. COUICK: Mr. Scott, if you'd raise your right hand.
CHARLES DUKES SCOTT, having been duly sworn, testified as follows:
MR. SCOTT - EXAMINATION BY MR. COUICK:
Q. Thank you. Please have a seat. Mr. Chairman, in reviewing Mr. Scott's license, I see that he lives at 6413 Pinefield Drive, Columbia, South Carolina, 29206. His voter registration card also lists that same address. Mr. Scott, I understand that's in Richland County?
A. Yes, sir.
Q. And you've lived there for some period of a time, I take it?
A. Since 1978, yes, sir.
Q. Mr. Scott, we've had an opportunity to review your documents including a report from SLED and from the credit bureaus and find no negative entries on either one. Also for the benefit of the committee, I'd like to ask you, do you currently own any stock in a publicly regulated utility?
A. No, sir.
Q. Does your wife or anyone else that lives in your household own any utility stock?
A. No, sir.
Q. You earlier reviewed a copy of your Personal Data Questionnaire Summary?
A. Yes.
Q. Did you see any corrections that need to be made on that?
A. There was a question mark as to my first wife and her name was Debbie. She was Deborah Ann Seabrook when I married her.
And I've had some additional expenses, I think maybe 30 or 40 dollars expenses --
Q. Okay. Well, you can --
A. -- for the campaign, but other than that --
Q. -- certainly update those with the Ethics Committee.
A. I have -- I had filed that, yes, sir.
Q. Okay.
A. I sent them a letter.
Q. All right. That's a perfect way to do it. Mr. Scott, I can certainly run through a list of terms and everything with you relating to PSC responsibilities such as generational mix, wheeling, latas, construction work in progress and some other things that we've talked about with other candidates, but I would assume the presumption would be that you could handle all those things handily since you --
A. I would love for you to assume that.
Q. But I would think that at least some significant concern to the committee would be your ability to successfully transition from being an employee of the commission to being a successful commissioner.
A. Yes, sir.
Q. How would you -- what differences do you see between the role you serve now and the role you would serve as a commissioner?
A. As a commissioner, it would be a different relationship in one respect to the commission staff. As deputy executive director, the staff reports to me and I report to Mr. Ballentine, the executive director. But I'm involved in the day to day operations of the staff and as a commissioner, I would not be able to do that.
I would be one of seven as far as direction of the staff and one of seven would be to instruct Mr. Ballentine to carry out the policy of the commission.
As an employee, I carry out the policy as set by the commission. As a commissioner, I hopefully I would be involved in setting the policy.
The transition I think would be a smooth one. I have in the past served strictly as executive assistant to the commissioners. For example, from 1986 until 1987, I was executive assistant to the commission. I had no staff responsibility other than for the commissioners' secretaries, but other than -- but no staff responsibilities at all.
I was advising the commission on policy, so I have been in the role where there was no line authority, if you will, for the staff, so I think that my experience as executive assistant to the commissioners will help me move into a policy making role and give up the day to day supervision of the commission staff.
Q. Mr. Scott, I realize that the question I'm getting ready to ask you may seem a little bit pointed particularly in view of the fact that you have a continuing relationship until you're elected as a commissioner with the commission, and I'm not asking you to criticize necessarily personalities or whatever on the commission, but what I ask you is what would you do new at the commission?
What improvements would you make? And without that being condemning of what practices are there now, what improvements would you like to see at the commission?
A. Yes, sir. I appreciate your concern about that because although the commissioners aren't in here, I imagine they'll have access to this.
Q. Yes, sir. They asked me to ask you this.
A. But, in fact, it's an easy -- it's not difficult because I have a great deal of respect for all the commissioners and that's a question I have given some thought to.
One thing as a staff member, for example, in the national organization, the Southeast organization, that national organization has a lot of input in Congress and they testify before Congress and can relate some state concerns to the Congress.
As a staff member, you cannot be on a main rule committee. They have subcommittees that are made up of staff people, but the commissioners are on those committees. And that would enable me -- I hope to be one to be able to assign, to go to Washington at times when necessary. I'm not on -- just going traveling, but to try to explain positions that the states are in because sometimes, you know, we got rural counties here and some things that Washington thinks don't exactly fit and so I think --
Q. Could you give an example of what -- of a topic where you feel like there is a necessity for federal action to either relieve a burden of a current federal law or some necessity for federal legislation to assist in South Carolina?
A. Well, one concern I have is, and it's a good thing, but, you know, this informational infrastructure. I think the states need some input in that to be sure that all the states and all the people within the states get the benefit from that.
It's not going to be difficult to link up the Medical University of South Carolina with Richland Memorial Hospital and there is nothing wrong with that. But with this infrastructure, a doctor will be able to take an x-ray in Richland Memorial and talk to a doctor who is going to be looking at that x-ray at the Medical University of Charleston.
That's going to be -- that's going to be one of the first link-ups probably there is, but people in Winnsboro also are going to need that, people in Bowman, where I have some family, outside of Orangeburg is going to need that and I think -- and Vice President Gore, to his credit, mentioned that states were going to have some input in that. So that's one issue I think that we need to be sure that the rural counties are not left out.
This open access to -- and when you mention open access, you talk about electric and you talk about natural gas and you talk about telephone. You know, that's good. And it has some valid points, but when you do that, you've have got to -- I think we've got to keep in mind that we've got some small customers out there who may have some costs shifted to them.
It's estimated that Article 636 out of the Gas -- Federal Regulatory Commission is going to cost 1.2 billion dollars in restructuring costs. And where is that 1.2 billion dollars going? It's going to go to the customers who can't transport their own gas. And who is that? That's the residential customers and small commercial customers. And I'm not -- I understand that 636 has some benefits. I mean what's good for industry is not necessarily bad. I understand that, but we need a voice to make sure that these costs that Washington -- that came out of the FERC.
Down here at the commission level, we've got to be concerned -- but we need to be sure that as far as 636 goes in effect, that these costs are shifted. That we've got some protection there for the small and the retail customers, those firm customers. And it's estimated that Southern Natural which supplies a lot of gas to our customers in South Carolina, that's 200 million dollars. And that 200 million dollars is being -- in restructuring costs is being shifted. Shifted where? It's shifted to the small customer who can't transport his own gas.
Q. Let me ask you one question related to that and you -- there's been a lot of talk about deregulation. And one aspect of deregulation, there seems to be a lot of talk about wholesale wheeling of electrical power?
A. Yes, sir.
Q. And if you apply that to the next level and totally open up free enterprise, you would have retail wheeling?
A. Right.
Q. Talk about that a little bit. Are there -- what problems are inherent in that and --
A. Yes, sir.
Q. -- is that a concept where free enterprise can make things cheaper and folks have a choice who they buy from?
A. Everything that you read about does generally benefit and for every benefit, there is usually a disadvantage and this is where -- again, I think the states have got to stand up.
Wholesale wheeling is in the hands of the FERC. The Energy Act of, what, 1992, it was a year or two ago, gave the FERC the power of wholesale wheeling. Now wholesale wheeling is basically taking it from a generator of electricity to another electrical utility who is going to resell it, the wholesale aspect of it. And the Federal Energy Act created what's called exempt wholesale generators of electricity.
We ended up with another key word of unbundling in the past. And you hear that word, you hear it in gas, you hear it in the telephone, you hear it in the electric area. In the past we used to -- the same company bundling electric service. I mean it's all in one neat package. Ms. Masse, who used to be chairman of the commission, she died in 1990. We kept talking about unbundling in the telephone industry. She ordered me not to mention that word again because she got tired of hearing about unbundling.
But we packaged it all together, you've got the generation, the transmission and the distribution altogether. There was one exception, the wheeling station down in Charleston is now a separate corporation from SCE&G.
Generally, that's the way we've been doing it. Well, what they're trying to do is make competition available in the wholesale generation of electricity. Now, I think there is some benefit to be there, but one of the issues you need to be concerned about, I'm not necessarily trying to tell ya'll what you need to be concerned about, but I think we need to be concerned about is the reliability of the generation. As the companies plan for the future and meet that load, they -- like yesterday or the day before yesterday, Duke Power Company reached 16,000 megawatts of demand. That's a record for Duke Power Company. That's more then they reached on July 29th of last summer on that real hot day when everybody passed it, too.
Well, when that day comes, South Carolina -- and CP&L reached a record, too, now. SCE&G for some of the people because they got more capital. But I say all that, you need to be sure that when you give up the control of the generator, that is, when the distri--- the LDC gives up control of that generator of electricity, you need to be sure that when you need 16,000 megawatts of electricity that that person is going to give it to you. And if you don't own it and you don't regulate it, there is no way to guarantee that. Of course, there is no guarantee on any of them. A nuclear plant can go down, we know, but you got more control over it. So there is a downside to it and how much you can depend on the wholesale dealer. I'm not arguing against the wholesale generators. I do think they have a place, but as I said for every advantage, there is a disadvantage.
So when you get these wholesale generators, you might have a wholesale generator build a plant here in Columbia, but SCE&G may not need the electricity or they may enter into a contract Santee Cooper. Well, you've got to get the electricity from Columbia down to Moncks Corner or Santee Cooper. Well, how do you do that? You wheel it and that's wholesale wheeling.
When you take from that generator and you put it on the lines and actually it's basically just placement because you can't follow the electricity, but they call it wheeling the electricity from here over the SCE&G's lines. They might have to interconnect with another carrier down to Santee Cooper. That's a wholesale wheeling.
Now retail wheeling is a horse of a different -- a different horse. You've got retail wheeling is where you wheel it actually to the end user. You wheel electricity from one service area to the other to the actual end user. And that's the real issue here.
Now the Energy Policy Act, and I commend Congress on this, they left that to the states where it belongs because under the Energy Policy Act, there was some talk about giving that to the FERC, too, the Federal Regulatory Commission, but they didn't do that.
They left that to the states and that's why. Why? Because when you talk about retail wheeling, you talk about some real adverse effects on some small customers again.
Retail wheeling would be a large business that uses a lot of electricity and I don't know that I'll name any particular, but you think of the largest user of electricity you can think of and what they do would -- on a retail wheeling is you -- they would put out for bids, the electrical powers.
Q. So it gets to be more or less an economies of scale type situation where you have adverse selection like insurance where your big customers may wheel out and leave the mostly costly to service?
A. That's correct, so when you get this big customer, who -- the utility is already built to meet his demands. He's got -- so you get this big customer and he -- and they put out -- now I don't want this to be taken that I'm going to vote against wheeling. I'm just saying that there are some issues there. I would --
Q. Mr. Scott, I'll stop you there because I understand your reluctance to get too far into specifics.
A. Right, but I would tell you --
Q. What I think the committee would like to see is just the analysis that you were going through and I think that's appropriate.
A. Okay.
Q. One other concern to the committee aside from the technical side of a commissioner's responsibility is that they have a broad life experience, on a more general level, they understand and appreciate the problems of consumers and of industry?
A. Yes, sir.
Q. You've certainly been on the technical side for the past, I believe, 11 years with the commission?
A. Well, I got a total of 11 and a half years, yes, sir.
Q. What other experiences do you have or what would you point to to say that I'm prepared to understand the problems that folks have economically or that companies have or whatever that will enable me to sit there and not just be a dispassionate technocrat, but I can actually be a public servant?
A. Yes, sir. Well, you know, I mean I've got family that lives in rural areas. I know the problems of rural areas. My father grew up in a rural area. I know the feelings of a father without work and some struggles that families make. I have tried to be a good church member.
And in the past, but not in the last five years, but one time, I was in the Rotary Club and tried to -- we tried to be good civic servant in that regard. I have raised, not my own children, but two children that Judy had by a previous marriage. I know the trials and tribulations of raising children and wondering where they are and wondering, you know, about the cost of education.
I have a broad background as far as friends are concerned. I have friends with -- on that have problems with issues and talk to them. And I think that I'm a people person. And I think that background would help me in making -- to make any decision.
Q. Mr. Scott, you mentioned earlier that you were some -- in some degree responsible for personnel policies and the administration of personnel at the commission; is that correct?
A. Yes, sir. The personnel director reports to the -- the controller who reports to me and we act with personnel.
Q. But you are actively involved in the setting of personnel policies --
A. Yes, sir.
Q. -- and standards?
A. Yes. Now I'm active in presenting policy to the commissioners for their approval.
Q. Right.
A. But they approve all the personnel.
Q. To what specific -- specifically could you point as successes that you had or encouraged the commissioners to have in minority hiring or equal Employment opportunities?
A. We have Affirmative Action plans in place and approved from Commissioner Clyburn when he was a commissioner and not congressman, came to visit the commissioners and the commission and the staff. I was in there and he was generally complimentary of us. I think --
Q. How many minority employees do they have currently?
A. Are you talking about gender or race?
Q. Both.
A. Right now we have fifteen -- a recommendation was made to Mr. Ballentine who made the recommendation to the commissioners who accepted it wholeheartedly was when I was general counsel of the commission, I had a lady in the office, Ms. Caroline Nelson, who was a secretary in our office. And when I became acting deputy, I proposed that we make Ms. Nelson the Personnel Director and she's a black lady who is very conscientious. And I think that that's probably one of my key successes as far as posts and when I say that, Mr. Ballen---
Q. Do you have any other African-Americans or females that are in policy setting positions at the commission?
A. She's the top policy maker at this point in time. We've got accountants. We have black lady accountants. I'm trying to think. We had black male accountants, but they have left. I think the last one got a job with the federal government and left, the last man. We've got -- we had -- we were doing real well with our law enforcement, but we were concentrating on safety and we had a black female who was a lieutenant, we had a white female, we had several black male officers and they got transferred to Department of the Public Safety. So we lost those last five.
Q. Somewhat artificial loss?
A. Sort of an artificial loss. I think we can honestly tell you that we made some progress there and I can tell you Mr. Ballentine and all the commissioners embrace Affirmative Action.
Q. You mentioned in your documents filed with the committee that you have dual employment with the state government?
A. Yes.
Q. Currently you serve not only the Public Service Commission as its executive -- associate executive director and deputy executive director, but also you're an advisor to the State Energy Office which is an adjunct of the Budget and Control Board and you've served in that position, I believe, since 1992; is that correct?
A. Yes, sir.
Q. What responsibilities do you have in that position?
A. They are changing. Right at this point in time, I serve as a consultant there. I do it on my own time. I use annual leave. I help draft documents for them. I review policies which the State have instituted and I attend meetings with them. And the present contract expires June 30th.
Q. At the expiration of that contract, do you know if it's open for renewal or not?
A. I would be open for renewal if they are and depending on if I get elected commissioner, that may -- that may dissolve that relationship.
Q. What would be your feeling if you were elected commissioner, would it be appropriate to serve in that role?
A. I think that -- yes, sir. I think it would be unless and until there was a decision made that they needed to intervene and act before the Public Service Commission. That decision may have a -- they haven't made that decision at this point in time and I certainly would have to resign.
Q. Which of the --
A. I don't know that they -- I think that there is some feeling that if I'm elected commissioner, I don't think that -- I think there is some feeling that they would rather me not serve.
Q. Which of the three branches of government does the Public Service Commission fall under?
A. Well, we're in the Executive branch. We're in the Executive branch of the government, but we -- the court said you're a quasi-judicial body, but you're not a judicial body. And, in fact, back years ago in the seventies, there was a circuit judge over there who presided, consequently the Supreme Court found that they -- that that would be a separation of powers problem.
We're not part of the Judicial branch, but we do quasi-judicial work and we're created by the Legislature. So we're a quasi-judicial body created by the Legislature in the Executive branch of the government.
Q. The reason I ask that question is you would wear a number of hats if you were elected to the commission. I guess one of those would be as you said quasi-judicial. Do attorneys employed by the commission ever take an adversarial role before the commission?
A. Adversarial.
Q. Adversarial to persons appearing for utilities.
A. Yes, sir.
Q. Would you feel that you would be called upon to recuse yourself at any point since you have had the employment relationship with any of these attorneys that have been there at the commission?
A. You mean that work at the commission now?
Q. Yes, sir.
A. No, sir. When you say adversarial, I'm saying different. We don't consider -- and we don't consider that the staff is to be adversarial in the sense that they're trying to win a point. It's adversarial in the sense that sometimes they propose things different than the utility, but it's -- what the staff is trying to do is to basically present the matter to the commission in their testimony generally speaking in a manner consistent with prior commission orders.
And I might have used the wrong term when I said adversarial to the utility. It is different than the utility. Whereas the utility might be or an intervener might be trying to get the commission to change its position on a particular issue, so it may be different. But the staff doesn't have a role in the sense -- they can't appeal the commission's orders.
Although they present testimony and cross-examine, we -- the past general counsel wrote an opinion that they weren't technically a party of record. So the -- I mean the staff -- and once the commission makes a decision even if it's different than what staff had proposed, the staff is going to be in court defending it because our staff lawyers defend the commission in court.
We're a little different than, say, Workman's Comp. Commission where they make a decision and go to court. I don't think the Workman's Compensation Commission or Industrial Commission actually defends the order.
We actually defend the -- we being the attorneys there defend the order of the commission. So they're not adversarial in the sense that they're trying to win a position. They are there as to present the information to the commission, but they don't -- but they're not -- whether they win or lose is not an issue.
Q. Let me ask you more generically then if you were the attorney for Southern Bell and you were appearing before the commission and you were serving on the commission -- and you were elected and serving on the commission, would they have a valid point that perhaps those attorneys have a leg up on them since they had a close personal relationship?
A. That issue has come up, not necessarily with a utility, but it has come up about the staff and the role of the utility. And that's when the opinion was written that the staff was not a party of record and that they were -- didn't have really an interest in the outcome as far as monetary interest or otherwise.
Q. Are you a part of that staff that would -- currently, are you a part of the staff that litigates or defends through litigation orders of the commission?
A. I don't go to court anymore. No, sir.
Q. Maybe I misunderstood.
A. I mean I go to court and observe. I don't --
Q. Maybe I misunderstood, but I took your position to be more advisory to the commissioners as opposed to being a part of the staff that actually tried the case. Did I misunderstand you?
A. That's true, but the staff does report to me, but generally -- and that's one reason for the executive assistant to the commissioner was that -- and the parties had a valid point.
You know, you have a staff lawyer there in the front, someone can make an objection and the commissioners want legal advice on that objection and the staff lawyer would give them that advice. So one of the reasons that they created the executive assistant to the commission position was that you separated that. It used to be that the staff lawyer would get up and say, "I'm Duke Scott and I'm here representing the commission and commission staff."
During the proceedings, they say, "I represent the commission staff," so we do have a dichotomy in that respect and it's been well received. But you have a valid point. There is some uncomfortableness in some of that, but I think the executive assistant to the commission has taken some of that uncomfortableness away as far as --
Q. So the structure that ya'll adopted is --
A. The structure that we have adopted, yes.
Q. Mr. Chairman, we have reviewed the credit report and SLED report on Mr. Scott. They are both -- no negative entries on either one of those. And one final question, if I might, Mr. Scott, before the committee can ask questions, if you had to critique the commission's performance over the past three or four years as to whether it's industry oriented or consumer oriented, what would that critique be and where on the spectrum of 1 to 10, 1 being industry and 10 being a consumer, not being a qualitative spectrum, but just which way is it oriented, where would you put the commission?
A. Well, I would put the commission in a 1 to ten at 5. Now, and reason I say that is I think the commission has done a tremendous job of balancing the interests of the consumer and having good reliable utility and motor carrier service, too.
The commission regulates motor carrier service, also, at reasonable -- at the lowest possible reasonable rates on the one hand and balance the interest as the Hope and Bluefield decisions have mandated the interest and the right of the investor for the opportunity, not a guarantee, but an opportunity to earn a fair return on its investment.
And I think one of the best examples of how well the commission has done is when we turned these lights on on Wednesday when all that demand was putting on that system, they came on. The utility has to be able to attract capital to build the plants, so that when you reach 16,000 megawatts of electricity of demand that it's there. On the other hand, I think that the rates are reasonable rates, so I think there has been a clear balancing.
And generally speaking the reports are doing that now. The commission -- in last SCE&G case, the way they handled the construction work in progress of the coal fire plant down in Cope I think is sending a positive signal to the investor.
And I think that the customer in the long run is going to be the beneficiary of that. So I would say that we're in the middle. One of the last reports I saw had the commission above average.
Q. Above as average as to --
A. Above average towards the investor, but I think that there was a lot of positive things that contributed to that and one is the way the commission handles the construction work in progress at the Cope plant.
The other is that we started integrated resources plans back in 1987, which is good for the customer. And so we started the prudent reviews of natural gas utilities right after Article 436. We didn't wait on Article 636.
Some states right now are just getting ready to start prudent reviews of the natural gas industry as a result of 636, but our commission did that since 436. I think we -- the commission has done a tremendous job in balancing those interests which is the key job of the commission and when you boil all those things down and you mentioned those terms and things that I've talked about today, balancing that interest is where you end up.
Q. Thank you, Mr. Scott. Mr. Chairman.
THE CHAIRMAN: Representative Wilkes.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Good morning, Mr. Scott.
A. Good morning, Representative.
Q. First of all, it's gratifying for me to hear your interest in 636 and wheeling and to the potential cost shifting and the mandates that go with it and the effect on the smaller business people. I think that that is something we all need to be aware of.
A. Yes, sir.
Q. And we thank you particularly for your reference to the town of Winnsboro.
A. That -- you know, and I'd tell you that was totally unintentional --
Q. I'm sure it wasn't intentional. I know.
A. -- but I'm not sure it was.
Q. In a more serious vein, just a couple, I guess, common sense questions that come up in my mind. If you were to be elected and lost your consulting contract, you'd be taking a pretty significant pay cut --
A. Yes, sir.
Q. -- By 25 percent as I computed it here?
A. Yes, sir.
Q. To -- is that -- let me say this, do you consider the job and the rewards that you would get, intangibles, to make up that difference?
A. Yes, sir. In fact, I mean I'm going to take a pay cut from deputy executive director to commissioner. I mean, I am going to be making less as a commissioner --
Q. Yes, even without --
A. -- either way.
Q. Even without the consulting contract, a couple of thousand dollars?
A. It won't be the first pay cut I've taken to go to the commission. I took a pay cut in 1986 for the commission, but, yes, sir, I do. And it's kind of hard to explain.
You know, people -- some people say, well, Duke, you're in the executive comp. system, you've got grievance rights. It's not a political appointment. I mean if the commission changes, you're not supposed to be able to come in and just fire me because I'm not of the political party that they might be or whatever, so I'm giving up security and dollars.
But being a commissioner is something that's fascinated me since I went there and I wouldn't run against Yonce. He's an outstanding commissioner. Don't get me wrong. But, I mean, it's something that just pleases me a lot.
The Energy Office I mean that's going down as far as costs. In fact, it's -- it went down another -- it went down half from 1992 to 1993 and it's gone down a third -- I mean, not a half. It went down 25 percent then. It went down, I think, a third effective January the 1st. As they get on their own feet and start doing, so that's not something guarantied.
But I'm prepared for the financial sacrifice of being a commissioner. You know, I known being in Richland County, I don't even think I get per diem, so I think you can see my salary is going to --
Q. Following that same, I guess, practical line of questioning, in your relationship with Mr. Ballentine --
A. Yes, sir.
Q. -- you would be moving from employee to boss man, I suppose, and I notice that he was one of the persons who gave you a letter of reference?
A. Yes, sir.
Q. Can you tell me, do you feel that that is going to put either you or Mr. Ballentine in an uncomfortable position or any kind conflicting interest position?
A. No, sir, I sure don't. I see how as an objective person looking in might see it and I certainly understand that, but I have the utmost respect for Mr. Ballentine. And I think from -- and I don't want to be presumptuous but I think in the letter, you'll see that he has the utmost respect for me. If that -- that will not be a problem, but I can understand how to ya'll it may seem to be. But I can assure you that that is not an issue.
Q. One other quick question a little more on the technical side and I guess it interests me more as a CPA than anything else, when you were talking about getting into that comfortable 5 position on the 1 to 10 scale and you mentioned the accounting for the construction in progress in the coal fire plant over in Orangeburg County, can you explain to me just in very short, quick terms what that's all about?
A. What we did and what we -- what the commission did in that case was -- you see, there is no electricity coming out of that at this point in time, but they put money in and that money needs to attract capital and those people want a return on that capital.
And the way the commission handled that was they put into the rate base all the dollars spent almost up to past -- at least to the hearing and even maybe even past the hearing where they had certification that dollar was already spent.
Now what that does is that gives them real dollars returned and not artificial dollars, if you will. What that does is that -- the cost of the plant does not continue to build because of book carrying costs. The commission also did a two-step process, so that the -- provided that SCE&G has spent the dollars by next -- by this June that they're projected to spend, not using projected numbers. But to the extent they have spent dollars in this coming year, they will automatically go into -- it's not automatic, but they will go in the rate base upon a finding by the commission that those dollars are already spent and so even for this year, the actual dollars are being recovered, so that carrying cost are cut off and the investor knows he's getting a return on those dollars. And that perception, I believe, cuts the cost of attracting that capital.
Q. And that would be consistent also with the tax treatment and the General Accepted Principals that you don't depreciate that plant until it's placed into service?
A. I don't think they draw any depreciation, Representative.
Q. That's what I'm saying, it is not?
A. It is not.
Q. And should not?
A. It's getting carrying costs.
Q. Yes.
A. But it's in the rate base, but I don't think it depreciates.
Q. No, it wouldn't be, so that is -- what I'm saying is it is consistent with other --
A. Yes, sir.
Q. -- treatment in the financial world which is generally accepted --
A. Right.
Q. -- rather than being skewed to either side --
A. Yes, sir.
Q. -- for either --
A. The people who are going to use that plant are the beneficiaries of this treatment and cut the cost of that plant.
Q. Yes, sir. Thank you.
THE CHAIRMAN: Senator Courtney.
EXAMINATION BY SENATOR COURTNEY:
Q. Thank you, Mr. Chairman. Mr. Scott, the position that you have, you have the ability to know the ability of the PSC or commissioners to get information and all when they're making their decisions. Do you feel presently that you're able to obtain all the information that -- relevant information that you need to make the decisions that come before you?
A. Yes, sir. And the reason that I say that is that we have full hearings before the commission and it's -- the hearing is conducted under the Administrative Procedures Act that is to try contested cases.
We have the -- not only the utility presenting information, but Mr. Hamm and his officer is presenting information and in rate cases, the South Carolina Energy Users committee is there and they're presenting their cases. We have in some instances an industrial customer and in some instances we have groups who are representing themselves, and actual consumers who come represent themselves.
Q. I understand that you hear information that comes from the utility companies and from the Consumer Advocate and other groups also.
A. Right.
Q. But does the PSC or the staff have authority to subpoena information on its own?
A. Yes.
Q. Do you feel that --
A. But we generally don't have to do that. What we do, Senator, is we issue data requests, staff data requests. And in a typical case, the response is that they request take up notebooks.
But we do have the subpoena power if needed, but generally, we don't need it.
Q. Do you feel that you're able to get what you consider to be accurate information pertaining to the actual expenses of the utility companies in production of power and so forth as opposed to expenses that they may incur from other investments that do not pertain to generating the power?
A. Yes, sir. We're real comfortable with it. The commission in the case of SCANA corporation held a proceeding which went over a couple of years to try to ensure that we had access and information, so there is not cost subsidization and there is unfair advantages and the commission came out with an order regarding how that information is to be provided, when it's to be provided and how it's to be provided.
We even have access in a holding company book as a commission staff. We have some 19 accountants on board with the commission, board of CPAs. They don't just ask information and get it, they go to the premises and audit and we audit by sample and otherwise.
Q. That's fine. And, you know, we talked a little earlier about the different hats that you wear and so forth, do you feel that the commissioners need to be more judicial as opposed to a part of the Executive or a part of a Legislative branch? Do they need to be more like the Industrial Commission, for instance, to just make rulings?
A. No, sir, I think the way it is, is the way it ought to be.
You see, the commissioners deal more with than just contested cases. I mean that's one aspect of it, but the commission is policy people. And policy people -- it's hard to make policy on a case by case approach. You need people from different backgrounds, different interests, different levels of interest. You need them from consumers.
Q. The policy making part of it seems to be something that you find to be important, and I appreciate that. Do you feel that -- just going along that line, do you feel that municipalities, for instance, that own their own utility services, do they need to be regulated by the Public Service Commission?
A. Well, I'll break that question, if I could, into two parts. One, as far as what about inside the municipalities and I think inside the municipality where they vote on council and points of -- I don't think they need to be under commission regulation.
It's a real issue once they leave the boundaries. We have people call and say well, I don't have any representation on the one hand. On the other hand, you can have -- it's not necessarily whether let's substitute something for it. I think that there -- that the General Assembly may look at through hearings or otherwise, look at a ratio. I mean there are reasons for charging.
I live outside the City of Columbia and pay the higher water rates, so I'm speaking from the know. But I think that some ratio could be set that so long as that ratio was maintained and then in a rate increase, you raise one, you raise the other. There is a protection there because you're raising inside the city people, too. And so I think that so long as they stay on that ratio, then I really don't think that the full regulation is necessary.
Q. Well --
A. It's going to add the costs to the city sit and that sort of thing. Well -- excuse me.
Q. As opposed to full regulation and no regulation, is that what you're saying?
A. Yes. Something, for example, if the relationship now is one and a half times in city and out of city or that's what -- not necessarily what's now, but what ya'll found to be reasonable and all of a sudden they double the rates of the outside and kept the inside people the same, then it seems like the people may need a place to go to complain. So maybe a formal complaint, if something like that happens, that there may be some oversight. I don't think --
Q. There are arguments for and against the fairness of doing it that way, but --
A. Yes, sir.
Q. -- you don't feel that it's a problem for people who live outside of a municipality to have no -- of course, they can't vote for or against the mayor or the council to control the rate. You don't feel that it's important to them to have some protection from third party such as the PSC whether or not their rates are going to go up?
A. And, certainly, if ya'll -- if this General Assembly decide that the commission ought to regulate, I'll be the first one in there doing the best job I can. I'm trying find a balance between the two. And I'm in that position.
I mean I can't vote for the mayor or the city council who decide what rate I pay for water, but I feel like that as long as they keep my rates relatively on a ratio -- now I do feel like I probably ought to pay a little more than someone that is paying city taxes, then they -- but the city council is going to have to respond to their residents and the voters in the city if they have to raise both of us at the same time.
Q. Thank you for answering that question. I think Mr. Couick may have asked you, but do you or any of your immediate family own any stocks in the utility companies?
A. No, sir.
Q. Thank you. Thank you, Mr. Chairman.
THE CHAIRMAN: Any further questions?
EXAMINATION BY DOCTOR HATTON:
Q. Just recently -- I appreciate the way your testimony here has illuminated the policy making role of the PSC. We haven't heard a lot about that in the last day or so, but I wasn't quite sure what disincentives you think there ought to be with the wrong kind of cost shifting that you discussed very early on.
I wasn't quite clear what you thought the disincentives to such cost shifting should be and where we are missing the boat in that --
A. I don't want you to miss the boat yet because the Restructuring is still taking part, but I think that we
-- and this is where we are going to have to go to the FERC and let the FERC know that there are other people down here because they're almost taking it out of our control when they shift the cost similar to taking a pay cost. So I think that we need a voice in -- before the Federal Energy Regulatory Commission and before Congress, if necessary.
And because I think that there is some demand placed on the system by the interruptible customer and that someone -- that demand ought to be paid for. You argue about the interruptible, so they don't place the demand. But when that switch gets cut, we get complaints.
I mean they're putting some demand on it and I think some of those demands -- I don't think they ought to shift all the fixed costs from the interruptible -- and I don't mean to bring down the industrial customer. No, ma'am, I understand they provide jobs. We need industry and that's a real balancing approach.
But it seems like something -- they do -- you know, they say, well, you cut us off with the -- well, you cut us off, well, they cut them off, but then the industry closes and you've got people out there out of work. And so it's not as simple as, well, you can just cut us off. I think some of those costs maybe ought to be considered at least to stay on, to stay on that system.
Q. A very clear example?
A. But it's a balancing effort.
Q. Very clear example.
A. Thank you.
THE CHAIRMAN: Thank you so much, Mr. Scott.
A. Sir?
THE CHAIRMAN: You're excused. Anybody have a question?
REPRESENTATIVE WILKES: One more question.
THE CHAIRMAN: I'm sorry.
RE-EXAMINATION BY REPRESENTATIVE WILKES:
Q. If I may, I'm going to ask you a little two-part question more, I guess, to give me some education on some things that have come up in the last two days that I'm not quite clear on. Hopefully, you can illuminate it for me and maybe for the rest of the committee. And we've heard a lot about the telecommunications and the highway and the technology and all of this, and, of course, one of the questions is going to be and is now regulation.
One of the other candidates made mention of the fact that -- if I understood him correctly, that possibly in fiberoptics and other things that technology is out running the need and may be driving the cost up of -- in certain areas and, secondly, the question of regulation of the cable industry came up. Some mention made of the federal regulations. Some other folks indicating maybe there is no regulation. Would you respond to that two-part question for me, please?
A. Yes, sir. On the issue about the fiberoptic, we're getting a lot of fiber in the state by different companies and fiber is so good in one respect in that when you -- you know, once you dig the hole and put it in the ground, it's not going to cost you much more to be able to carry a million pieces of data on that fiber as ten pieces of data, so you might as well put it in there. We're getting a lot of fiber.
And to the Vice President's credit, I think that's what he's trying to get out a little bit in this infrastructure because the fiber is going to be in the metropolitan areas if we don't watch it and the rural counties and the rural areas are not going to get a part of it.
We don't have people coming in here and wanting to provide alternative forms of access to the telephone companies in Bowman town. We have -- we're going to have them wanting to provide it in Columbia and Spartanburg and Greenville and Charleston, so I think that that's part of what the concern is by the Vice President that he wants to be sure that everybody gets a part of it. But we are getting a lot of fiber out there and -- but that's the reason. Once you dig the hole for it, you might as well put the big piece in.
Cable TV is an area in which -- we get a lot of calls about cable TV, not so much necessarily about the rates. There are some rates. We tell them we don't regulate it, but we still need -- I mean they don't know that when they call.
But if the service -- there doesn't seem to be an obligation to serve. And you come down to -- and, again, if the General Assembly decides that the commission ought to regulate it and if I'm there -- hopefully, if I don't get to be a commissioner, hopefully I'll still be there as a staff person -- we're going to be prepared for it and we're going to do a good job of it whether as a commissioner or as otherwise.
But, you know, one consideration is, you know, whether MTV and Showtime and Cinemax, whether those are necessaries of life. You know, we're dealing -- we deal with the commission with natural gas that heats people, that keeps businesses open. We deal with electricity. That's just got to be a necessity. The telecommunications is a necessity. On water and waste water, which is a necessity. Motor carriers, and we don't give much attention for motor carriers anymore, but it's still a viable regulatory process. It's not -- I don't think there is any good in this room that didn't come -- get on a truck at some point in time. So that's important to us.
You know, and not that cable is not, but MTV, when the children were at home, you thought it was a necessity, but I'm not so sure how necessary it was. But I think that the Cable Act has made some progress. It has given some regulatory authority over the basic package which may indeed become a necessity, you know, that the network and local television that pays that package has given the cities or the counties the franchise authority some recourse on rates.
The duty to serve ought to come from the franchise. It seems to me that part of the franchise agreement that the City and Town enter into is some duty to serve and there doesn't seem to be one. I mean if it's not profitable, they don't serve it.
Now if you want -- if you're a resident and you want electricity, you're going to get electricity, I think, in this state. If you're a resident and you want a telephone -- now you don't necessarily have access to natural gas. That's a different matter, but the cable TV industry, there has been some progress already made. I'd like to wait and see perhaps some of the concerns have been taken care before we jump further.
Q. And, again, the, you know, where the -- when you boil that down to what I deal with in the General Assembly and the questions that I have to answer from my constituents, the concern mainly has been on what you just touched on, about local programming?
A. Yes, sir.
Q. And I mean is that -- do you think that's going to be resolved through litigation and the court system or by statute or you know they managed to work out, I think, most of the problems here in South Carolina just through negotiation?
A. Yes, sir.
Q. May be that private sector should be allowed to -- I mean, to ferret out that problem itself?
A. I think --
Q. I'm through.
A. I think that we ought to tread cautiously here. Let's see what the Cable Act and our city responded. The other thing is when you talk about fiber and cable television, you know, this new information infrastructure is going to deal some with that.
Once you -- once a telephone company, once they put fiber to your home, they can take a picture there as easily as they can a dial tone. And so you're going to see a lot of changes and people talk about cable getting the telephone and telephone getting the cable, the electric companies are going to be putting fiber to the home, too, because they want -- don't want to send that man out to read the meter. They're going to be able to sit in the Columbia office and read my meter and how they're going to do it is fiber.
Once they put the fiber in your home, it's going to do more things than read the meter every -- once a month, so I think -- and, again, we do what ya'll tell us to. Ya'll make those decisions, but if you ask for opinion, and I think you did, I think maybe we ought to wait and tread a little cautiously before we have all right -- all out regulation of the cable TV industry and see what this Cable Act is going to do and what this National Information infrastructure --
Q. And that's very important. I saw an on the TV the other day that said your television may be answering your telephone, et cetera, et cetera.
A. Yes, sir.
Q. So we tend to be moving in that direction which obviously means that the dynamics are going to eventually cost someone somewhere to have to make some very serious decisions?
A. Yes, sir. I don't know whether she is, but you may be reading the newspaper on the television one day.
Q. Thank you, sir.
THE CHAIRMAN: Any further questions? You're excused, Mr. Scott?
A. Thank you for your patience and your kindness.
1. Mr. Charles Dukes Scott
Home Address: Business Address:
6413 Pinefield Road P.O. Drawer 11649
Columbia, SC 29206 Columbia, SC 29211
2. He was born in Orangeburg, SC on August 21, 1949.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *********;
S.C. Voter's Registration Number: 1852003.
4. On September 10, 1978, he married Judith S. Scott. He was previously married to (?) until his divorce in June of 1978. He was the moving party in the Richland County Family Court.
5. Military service: U.S.A.R., Rank Captain, Honorably Discharged in 1979.
6. He graduated from Orangeburg High School in 1967, and received a B.S. from Clemson University in 1971. He graduated from the University of South Carolina School of Law in 1974.
9. He was an attorney with Leventis and Scott from 1974 to 1981. He served as staff attorney to the Public Service Commission from 1981 to 1985. From 1985 to 1986, he practiced law with Willoughby & Scott. Since 1986, he has served as the Deputy Executive Director and Executive Assistant to the Commissioners of the Public Service Commission.
19. From 1981 to 1985, and from 1986 to present, he has worked with the Public Service Commission. His duties have included advising the Commissioners and the direct operation of the staff. Charles W. Ballentine is his supervisor. Since 1992, he has worked with the Budget and Control Board, General Services, as an advisor to the State Energy Office under Jay Flannagan.
22. He has spent approximately $35 on the preparation of letters, $49.30 on stamps, and $10 on telephone calls.
26. Professional organizations: South Carolina Bar.
27. Civic, charitable, etc. organizations: Forest Lake Presbyterian Church.
29. Five letters of reference:
(a) Charles W. Ballentine, Executive Director
South Carolina Public Service Commission
P.O. Drawer 11649
Columbia, SC 29211
737-5120
(b) Helen Zeigler
1711 Hollywood Drive
Columbia, SC 29205
799-3805
(c) Marjorie Amos-Frazier
361 Ashley Avenue
Charleston, SC 29403
723-0051
(d) Dr. James I. St. John, Pastor
Forest Lake Presbyterian Church
6500 North Trenholm Road
Columbia, SC 29206
787-5672
(e) Frances Robinson, Member Services
S.C. State Credit Union
800 Huger Street
P.O. Box 726
Columbia, SC 29202
343-0300
30. Second District.
THE CHAIRMAN: I don't want you to get too mad at me, but I have to admonish you. We've been here since 10:00 o'clock and we've gotten through two applicants and we've got ten more to go and I'm going to leave here at 3:00 o'clock this afternoon somehow or another, so I just think we're going to have to pick up the process and we've been with Mr. Scott over a hour, so I think --
A. I don't know what signal that sends me.
THE CHAIRMAN: Thank you, sir. I don't know how we can cut it short, but we're going to have to try.
REPRESENTATIVE WILKES: Yes, sir.
MR. COUICK: And before you sit down, if you would take out your driver's license and your voter registration card. Mr. Butler, if you would raise your right hand, we'll go ahead and swear you in at this point.
GUY BUTLER, having been duly sworn, testified as follows:
MR. BUTLER - EXAMINATION BY MR. COUICK:
Q. Mr. Chairman, reviewing the driver's license, I see Mr. Butler lives at 212 East Northside Drive in Greenwood, 29646. His voter registration card indicates that he lives at Post Office Box 2037, 212 East Northside Drive in Greenwood. Mr. Chairman that's in Greenwood -- Mr. Butler, that's in Greenwood County?
A. Yes, sir.
Q. County of Greenwood. Mr. Butler, you had an opportunity earlier today to review your Personal Data Questionnaire Summary?
A. Yes.
Q. Were there any corrections that need to be made on that?
A. It's fine.
Q. Do you have any objection to that being made a part of the permanent record of these proceedings?
A. No, sir.
Q. You are the first incumbent that we have screened, Mr. Butler --
A. Yes, sir.
Q. -- in this process, so I will not ask you the question what makes you run for this in that you've served on it, I believe, for 31 years; is that correct?
A. 31 years next month, yes, sir.
Q. And I would ask you the question you've served as chairman and vice chairman --
A. Yes, sir.
Q. -- and to that degree you're probably as responsible as any one commissioner over the past 33 years for the successes and the failures of the Public Service Commission?
A. I would say I was very much involved.
Q. If you had to name one success and if you had to name not necessarily a failure, but something you think that you need to work harder on or you look forward to working harder on, what would it be? One success and one thing you think that the commission needs to put more attention toward?
A. Well, I don't know whether it would be harder or not, but I -- excuse me, I've got a slight cold. But there is one thing that I think we should change and, of course, it will have to be -- it's a legislative matter. But the work load of the commission is not as great as it was one time. And in 1983 -- let me just --
Q. Yes, sir.
A. In 1983, the laws changed and was changed by the legislature and I was one of the prime movers of that to do away with bonded rates for the utilities. One reason you used to have to bond the rate was that the water and sewerage and other cases had to be gotten out in 90 days, so I have some friends in North Carolina and I found out that the bonding statute in North Carolina, they didn't let you put any rates under bonds.
And that was one of the big problems with the bonded rate people. When they filed a rate increase, they filed it and put it in under bond and we had a year to get it out. By the time we got to it, the people thought it was another rate increase, but it was the same increase that we were talking about several months. So I studied that at length and talked to some people with -- some commissioners and went over and met with Governor Riley and suggested and asked his support and that's one of the greatest things that's happened.
Now in doing that, they changed the statute saying that -- this is getting back to your original question -- saying that the water and sewer cases shall, have just three commissioners. Well, in my opinion, that should go back to seven, seven commissioners. Change the word to may because to lots of people water and sewerage problems are a major in their mind and they feel like seven commissioners or five or six is better than just having three commissioners there. So right now that's the only
-- the most important change I personally think should be made.
Q. Mr. Butler, do you own any utility stock?
A. No, sir.
Q. Do you live by yourself or do you have anyone else in your household?
A. No, sir, I live by myself.
Q. In terms of the responsibilities that you had at the commission, you've been there quite a while. Do you look forward to fully serving out this term if you're reelected?
A. Yes, sir. And maybe another one, if I'm lucky.
Q. Mr. Chairman, we've had an opportunity to review Mr. Butler's credit report and report from SLED. They're both negative in that there are no negative entries on those. And I add that for purpose of the record.
Mr. Butler, the environment has gotten to be more and more important and more of a concern to folks. What role does the Public Service Commission have to ensure that the environmental matters are properly considered during a rate case or during a siting permit case?
A. On the siting law, there are two -- we have to have hearings on the -- when a plant comes on-line and when they apply for 750 megawatts, I believe, we have to have a public hearing on that. And we always make sure that all the other agencies that are connected with, not only the environment, but environmental problems, that they clear those before we issue the permit.
Also the 125 -- I had some notes here, but there's two cases here, 125 KV line, we have to have a public hearing on that and that's when we really get into -- heavily involved in the environmental. Of course, we encourage as much as possible the use of natural gas because that definitely helps our environment. It's the cleanest -- one of the cleanest sources of use of electricity there is.
Q. Mr. Butler, just to make sure the record is clear, you mentioned you had some notes there. You don't have any preindication of what my questions are going to be, do you?
A. No, sir.
Q. All right. The notes you were --
A. Let me explain this, if you don't mind.
Q. Okay.
A. As you know, I've -- I used to have to go before the Merit Panel.
Q. Yes, sir.
A. And I have -- some of this stuff goes back several years.
Q. Yes, sir.
A. In my own handwriting. I have all kind of things here.
Q. Okay.
A. And I continue to add to it because we are furnished this data. We are audited from our companies we regulate.
Q. Yes, sir.
A. And, no, sir, I don't have --
Q. Yes, sir, I would not think so, but I want to make sure. You were not present yesterday when the chairman admonished everyone to please be careful and not spread questions around. I know that you wouldn't have had advanced notice, I would think, but I want to make sure.
A. No, I don't have any.
Q. What is the role of the PSC staff? How do they assist ya'll out there, Mr. Butler? Is there something that you would like to expand with the role of staff?
A. No, sir. I personally believe we have a very competent staff. As you know we have -- have to have technical people in practically every department and I think we have an outstanding staff. They do a superb job.
I've been involved in hiring practically everybody that comes there -- that is there now. It's just Mr. Ballentine and one secretary are the only people that have more time there than I have, so I was very influential in hiring Mr. Scott when he came there because he used to be our attorney and --
Q. Yes, sir.
A. -- we picked up on him. And I frankly think we've got as good a staff as possible and it's in my opinion so much ahead of some of these other states.
Q. Yes, sir.
A. They are dedicated people and they keep us informed on all these technical matters and they're on top of everything in my opinion.
Q. Mr. Butler, we've asked all the other or most of the other candidates about the Consumer Advocate.
A. Yes.
Q. So I'm not specifying this question just to you. The role of the Consumer Advocate, is that a cooperative role with the commission or when Mr. Hamm or his staff walks into a hearing whether it be rating or rate setting or siting, how do you view his role versus your role?
A. Well, to be completely honest with you, I think he does a good job, but he basically is for the consumer and lots of times he agrees with what we agree with, so they settle it out of court so to speak and it never goes to a hearing.
A good bit of that goes on, but as you know the law says we have to give a fair and reasonable rate of return and they can come in any time within six months. They have to wait six months before they apply for another rate increase, so he presents his expert witnesses in these major cases. The Legislature is wise in giving him money to hire experts, so -- and the companies have their experts, but the CA and the commission agree on lots of points. There are some points we do not agree on, but I think he does a good job.
Q. Mr. Chairman, that's all my questions.
THE CHAIRMAN: Any question of any member of the committee?
SENATOR COURTNEY: One question.
THE CHAIRMAN: Yes, sir.
EXAMINATION BY SENATOR COURTNEY:
Q. Mr. Butler, I just want to ask you something we've been asking everybody. Have you had any involvement in the political campaigns of any member of the General Assembly in the last five or six years?
A. I'm sorry. I didn't hear the first part of the question.
Q. Have you had any involvement with the political campaign of any member of the General Assembly in the last six years as far as working in campaigns or donating money to members of the General Assembly?
A. I have not been involved in any campaigns. The last six years? I don't recall. I haven't been involved -- as far as I know, I haven't. I know I haven't been in any campaigns, but I don't think I've done any fund-raising. I really --
Q. Donated money?
A. I don't think I have, sir.
Q. Thank you.
THE CHAIRMAN: Any other questions? You're excused, Mr. Butler.
A. Thank you very much.
MR. COUICK: You did get your license and voter certificate back, didn't you?
A. Yes.
MR. COUICK: Thank you.
A. Thank you all.
1. Guy Butler
Home Address: Business Address:
212 East Northside Drive 111 Doctors Circle
Greenwood, SC 29646 P.O. Drawer 11649
Columbia, SC 29211
2. He was born in Greenwood, South Carolina on March 26, 1926.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *******.
S.C. Voter Registration Number: 0 525 482.
4. He was divorced from Nancy G. Butler on May 24, 1954. Nancy G. Butler was the moving party, and the action was commenced in the Court of Common Pleas. He has two children: Diane B. Moody, age 45 (manager of Lander College Bookstore) and Debra G. Allen, age 40 (housewife).
5. Military Service: He volunteered for service in the U.S. Navy for a few months in 1944. He was honorably discharged due to a swollen left ankle.
Service #: 932-43-33; Rank: E-1.
6. He attended Greenwood High School from 1939 to 1943, when he graduated.
7. He served in the S.C. House of Representatives from 1960 to 1963, when he resigned upon being elected to the Public Service Commission. He has served as a Public Service Commissioner since 1963.
8. He ran unsuccessfully for Greenwood City Council in 1951 and for the S.C. House of Representatives in 1956 and 1958.
9. He owned and operated a taxi fleet with 4 cabs from 1943 to 1946 and owned, operated, and managed retail Grocery and Produce Markets from 1946 to 1974. He sold the market in 1974 because his duties as a Commissioner became more demanding.
14. He was sued in his capacity as Public Service Commissioner in 1979. Plaintiff sought a declaration that S.C. Code Section 58-3-142 was unconstitutional and requested both punitive and actual damages and an injunction against the statute's enforcement. The suit was settled with no damage award to the Plaintiff.
19. He served as a Member of the S.C. House of Representatives from 1960-1963 and has served as a Public Service Commissioner since 1963.
22. In seeking the office of Public Service Commissioner, he has spent a total of $216.50: $49.30 on stamps, $48.20 for stationary and envelopes, and $119.00 for the typing of letters and addressing of envelopes.
26. Professional organizations: National Association of Regulatory Utility Commissioners (1963-present); Southeastern Association of Regulatory Utility Commissioners (1963-present). SEARUC is an organization of Public Service Commissioners from 11 states in the southeastern region of the U.S.
27. Civic, charitable, etc. organizations: Mason, Shriner, Legionnaire, Loyal Order of Moose, South Main Street Baptist Church.
28. He has been a member of the Public Service Commission for approximately 30 years and has served as Chairman for two 1-year terms and one 2-year term. He has served as Vice-Chairman for two 1-year terms and one 2-year term. He successfully completed a course in Utility Regulation at the University of Wisconsin in 1963, shortly after his election to the Public Service Commission. He was successful in operating a retail produce and grocery business in Greenwood that grew from a 20' by 40' building to Greenwood's largest supermarket, with 30,000 square feet of space.
29. Five letters of reference:
(a) L. Giles Daniel
(b) L. Wayne Gantt
1425 Montague Avenue
Greenwood, SC 29649
(803) 223-2223
(c) Marjorie Amos-Frazier
361 Ashley Avenue
Charleston, SC 29403
(d) Harold E. White
(e) Jeannette Jernigan
Banking Officer, NationsBank
440 Knox Abbot Drive
Cayce, SC 29033
(803) 931-3180
30. He is seeking the position of Public Service Commissioner for the Third District.
MR. COUICK: Mr. Chairman, Ms. Derrick is on her way down. She'll be here in just a minute.
Ms. Derrick, please have a seat there at that far seat and if you have your driver's license and your voter registration certificate with you. Good morning, Ms. Derrick, if you would raise your right hand and take the oath.
MARY HOLSTEIN DERRICK, having been duly sworn, testified as follows:
MS. DERRICK - EXAMINATION BY MR. COUICK:
Q. Mr. Chairman, I have Ms. Derrick's driver's license. It represents she lives at Saluda Road, P.O. Box 446 in Johnston, South Carolina, 29832. Ms. Derrick, is that your correct current address?
A. Yes, it is.
Q. And what county is that?
A. Edgefield.
Q. And you've been a resident of Edgefield County for some period of time?
A. Yes, sir. Since 1976.
Q. Would you briefly describe for the committee your employment experience and what you've occupied yourself with the past several years?
A. Well, for last -- well, since 1976, I have been broker and owner of Derrick Realty in Johnston. Prior to that, I was a school teacher and guidance counselor in the county public schools. And prior to that, it was college and graduate school.
Q. Do you own any utility stocks, Ms. Derrick?
A. No, I do not.
Q. Does your husband own any utility stocks?
A. No.
Q. Anyone else in your household own any utility stocks?
A. No, sir.
Q. Ms. Derrick, what has convinced you that you should run for the Public Service Commission? What is your interest in the Public Service Commission?
A. Well, Mr. Chairman, I guess I would like to make an impact on my stay. I have been fortunate enough to be able to serve on a number of boards and commissions in my local geographical area that I feel like would give me a training ground to make the kind of decisions that the commission position would need.
Because of my business background, I think having to start a business from scratch and to turn it into a viable business, I can understand not only the business aspects that the companies would have to deal with, but also the consumer.
I have been a life long resident of South Carolina. My family has benefitted from this state for generations. I've always lived here and gone to school here, been educated here and intend to make it my home forever. And I'd like to make a contribution on the state where I live.
Q. Your ownership of Derrick Realty, do you share that ownership with anyone that's employed by a public utility?
A. No, sir, I am the sole owner.
Q. Do you from time to time buy or sell properties from public utilities or holding companies of public utilities such as SCANA?
A. No, I do not.
Q. Would you intend to continue your ownership in the Realty company if you were to be elected?
A. Yes, I would. I have three agents who are full time, one part time. Of that, two of those are men who are brokers and have broker's licenses. Either of those two could manage the business on a day to day operational basis without any additional training because they're both very seasoned and experienced people.
I also feel a great sense of loyalty to those people who have worked with me and the company and I don't think it would be fair to them to shut the door to them, so to speak, because of my interests going elsewhere.
Q. Would you continue to be a broker with the company?
A. Probably until such time as we can make the transition.
Q. Is it your basic approach to this position that it would be a full time one?
A. Absolutely.
Q. As soon as possible once you transition?
A. Absolutely.
Q. One concern of the committee has been the orientation of those persons who are running for the commission. You've mentioned earlier that you've been on both the business side and you are also able to see the consumer side.
Sitting in cases, whether they be rate cases or siting cases, what ultimately are going to be the factors that influence your decision? How often would the emotions of concerned citizens or their strong feelings affect your decision or is it going to be strictly a numbers driven decision in terms of perhaps rate setting? How will you approach a case?
A. I think you have to have a nice balance between the two. From the business standpoint, one could not expect a utility company to continue to stay in business if their bottom line is not a positive one. On the same -- along the same train of thought, however, I think I would be very sympathetic for the consumer who ultimately who might be, for instance, a divorced mother of three who might be working two shifts to make all of the family expenses covered and to whom if you had a rate increase it might mean that she could not buy a pair of shoes for the children.
But I think you have to be fair and equitable and look at all of the factors that would be involved on both the consumer and the business end.
Q. Ms. Derrick, is it your understanding that you would need to relinquish whatever positions you have -- public service positions upon election to the commission?
A. I'm sorry. Would you --
Q. I believe you continue to serve on a couple of -- the County Planning Commission in Edgefield and the --
A. That's prior. The County Planning Commission was a service that I rendered, I think, in --
Q. Okay.
A. -- roughly '85 to '89.
Q. So you are no longer serving in any other public office?
A. That's correct.
Q. You forthrightly put forth on your application that your business has been sued once and I take that to be a pending suit?
A. Yes, sir. That is correct.
Q. Without delving too much into particulars, were there any allegations of any fraudulent behavior on your part or anybody you directly supervised?
A. Absolutely not.
Q. Mr. Chairman, we've had an opportunity to review Ms. Derrick's report and SLED report from SLED. They are both negative in terms of there are no entries therein indicating any type of problem.
Ms. Derrick, as to your service on the commission, is there any particular one or two issues that you think would be more important or immediate in terms of -- that are confronting the commission right now that you would like to mention to the committee that you would like hit head on?
A. Unfortunately, I'm not aware without inside knowledge of what the commission has been -- what's on the table at this point in time. I really couldn't speak intelligently to that question.
Q. Mr. Chairman, that's all my questions.
REPRESENTATIVE WILKES: Thank you. Are there any questions for the candidate from the members of the committee? Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Are you familiar with the Consumer Advocate's Office?
A. I know within the Public Service Commission there is a Consumer Division, but as far as the Consumer Advocate's Office being separate from that, I'm not familiar with the workings of it, no, sir.
REPRESENTATIVE WILKES: Any other questions?
EXAMINATION BY REPRESENTATIVE WILKES:
Q. I have a question for you, Ms. Derrick, and again following up on Mr. Couick's mentioning your disclosure of this pending lawsuit and without getting into any of the details that might --
A. I would be happy to answer any questions.
Q. -- effect the outcome, if the outcome of that lawsuit were to be adverse to your company, would that in any way affect your credibility as far as serving on the commission?
A. No, sir. I would --
Q. Okay. It's just a -- it's a business matter more than one of ethics or of criminal intent or anything like that?
A. Yes, sir. If I might, I will be happy to tell you a little of the details.
Q. Well, I don't know that that would be necessary or proper given the fact --
A. Well, my attorney --
Q. -- that it's still a pending suit?
A. Well, my attorney tells me that the attorney for other side is more than likely going to drop the case, that he doesn't feel that it will ever go to trial.
REPRESENTATIVE WILKES: Then I have no question and if there are no other questions of the committee, you may be excused. Thank you so much for coming.
1. Mary H. Derrick
Home Address: Business Address:
"DeerHill" Derrick Realty
Saluda Road, P.O. Box 486 602 Lee Street
Johnston, SC 29832 P.O. Box 486
Johnston, SC 29832
2. She was born in Columbia, SC.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *********.
S.C. Voter Registration Number: 1 209 190.
4. She is married to Thomas Scott Derrick. She has one child: Louise H. Derrick, age 15 (student).
6. She received a B.A. from the University of South Carolina in 1972 and a M.Ed. from USC in 1976.
7. She has been appointed to the Edgefield County Planning Commission and the Upper Savannah Council of Government Historic Preservation Committee (approx. 1978-1982).
9. She was a teacher/guidance counselor with Aiken County Public Schools from 1972 to 1976. She has been the owner and Broker-in-Charge of Derrick Realty since its opening in 1976.
10. She is the owner/Broker-in-Charge of Derrick Realty and is Secretary of Heritage Trace of Johnston, Inc. (Development Group).
14. Her business has been sued once. Any action brought against a Derrick Realty agent results in an action against the agency. This was the situation here, and her attorney believes that the matter may be dropped.
26. Professional organizations: Ridge Board of Realtors (has been Pres., V.Pres., Sec., and Treas.); Aiken Board of Realtors; S.C. Association of Realtors; National Association of Realtors; Edgefield County Chamber of Commerce (Board Member); Johnston Development Corp. (Board Member).
27. Civic, charitable, etc. organizations: Episcopal Church of the Ridge; Edgefield County Cancer Society Board; Johnston Merchants Association; Johnston Town Forum (Organizer); Palmetto Trust for Historic Preservation; Chamber of Commerce; Johnston Great Town Committee; Edgefield County Heritage Corridor Volunteer Group.
29. Five letters of reference:
(a) Mr. Jim Jameson
Vice-President, NationsBank of Batesburg-Leesville
128 Church Street
Leesville, SC 29070
(b) Mr. John F. Byrd, Esq.
P.O. Box 466
Edgefield, SC 29824
(c) Jack Neal Lott
Jack Neal Lott Department Store
529 Calhoun Street
Johnston, SC 29832
(d) Mrs. Larry Vann
Rt. 1, Box 49
Trenton, SC 29847
(e) J. Andrew Livingston, CPA
505 Academy Street
Johnston, SC 29832
30. She is seeking the position of Public Service Commissioner for the Third District.
MR. COUICK: If you could give Ms. Hammond your driver's license and your voter registration certificate.
MR. JORDAN: Sure.
MR. COUICK: And if -- prior to taking your seat, if you would raise your right hand and I'll swear you in.
LEWIS E. JORDAN, having been duly sworn, testified as follows:
MR. JORDAN - EXAMINATION BY MR. COUICK:
Q. Mr. Chairman, Mr. Jordan's license indicates that he lives at 102 Lakeside Court, Clemson, South Carolina. His voter registration certificate indicates the same area. Mr. Jordan, now that, I believe, is in Pickens County?
A. Yes, sir.
Q. Mr. Chairman, staff has had an opportunity to review Mr. Jordan's credit report and also the report of SLED checking into criminal and civil judgements. Both were negative in that there were no entries made.
Mr. Jordan, have you had an opportunity to review your Personal Data Questionnaire Summary that was prepared by staff to see if it's correct?
A. Yes, sir.
Q. Are there any corrections that you would like to make?
A. No.
Q. Do you have any objection to that being made part of the permanent record?
A. Certainly not.
Q. Thank you. Mr. Jordan, what is the reason that you wish to serve on the -- or reasons you wish to serve on the Public Service Commission?
A. I'm a retired military and part of my whole life has been kind of service of one sort or another. This is a chance to serve the people of South Carolina, to make sure -- to help ensure as part of a small group to make sure we've got the best dollar that we can for the information and for the effort we're putting out for them to receive the best dollar value for their public utilities, to make sure that the services that are being provided are the best, the tops.
It's a chance for me to serve, again being military, we moved every three to five years and you step back and you start a new job, you look at things and you'll notice in my Bio, I retired from the Air Force in '85. I went into real estate. That's very successful, but you start looking for things to do to be of service, I'm involved in service organizations, all kinds of service organizations. It's just another step, another chance to use whatever talents I have.
Q. You indicate on your Personal Data Questionnaire that you're not a director or officer in any business or enterprise. I take it that you're an employee of the Foothills Real Estate?
A. That's right. I'm an independent contractor.
Q. And you continue to serve in that capacity now?
A. Yes, sir.
Q. Would you continue to serve in that capacity if you were to be elected to the Public Service Commission?
A. That is -- what I plan to do with that is to devote myself entirely to this position.
Q. What are one or two issues confronting the Public Service Commission that you would think would need your immediate attention or the immediate attention of the commissioners were you to be elected?
A. One of the things that -- I moved down -- we moved back to Clemson in '81 when I ran the ROTC Detachment and moving down from Washington DC and the PEPCO (phonetic) and VEPCO (phonetic) area up in there and when I moved back down to South Carolina, it was very nice to see some of the rates we have on utilities, quite a pleasant surprise and a good feature, and to see how well they run them.
I see right now, though, that within the next few years, I see the Information Superhighway coming on and hitting us full bore. I think that within the next couple of years, we're going -- we, the people of South Carolina, are going to have some real decisions to make on what to do with what -- who is going to be using what part of that superhighway into our homes with the Bell Telephones and the telephone systems that the commission regulates.
Some of those things are coming in now. The decision is going to be made as to who is going to carry those lines into our homes. Not so much the lines themselves, but the information flowed that is coming in on those channels and part of that is going to be the interactive TV, the -- those pieces that we're going to have to make some decisions on.
Q. Of those things that you just enumerated, what authority does the Public Service Commission have to regulate those things?
A. Well, we're talking basically your telephone.
But, the cable companies which we -- which the commission does not regulate still is going to have some say so in that because if the telephone lines come in and it's going to take -- start taking all of those things that we normally see in our cable and channels, then somebody is going to have some decisions to make.
We're going to have some -- I would foresee some interesting discussions among those agencies out there as to who is going to really carry that information into our homes and how is it going to be affected. I think that's something we need to look at now. We need to plan ahead because all of a sudden it's going to happen to us. We need to be ahead of it. We need to plan for that. We need to see where it's going and be ahead of that.
Q. Mr. Jordan, do you own any utility stock?
A. Not in South Carolina. I think I've got some Common Edison up in --
Q. Right.
A. Commonwealth Edison up in --
Q. Does your wife or any member of your household own any utility stocks?
A. (Witness shakes head in the negative).
Q. You mentioned your daughter, Jennifer, is a customer service representative in Charlotte. I was not sure who she worked for or what company.
A. She's with a graphics firm.
Q. But it's not utility?
A. No. No, sir.
Q. Of the experiences that you gained in the military and elsewhere, if you had to list skills that you gained that you would use well in the Public Service Commission, could you just rattle off two or three briefly that you think would be important?
A. Well, I think the biggest thing for all of us that affects all of us, and you do it so well, the -- it's people. Working with people to get things done.
I think getting that information, asking those right questions to be able to get that information out, so people can see and understand and know where you're going; setting -- another thing would be setting priorities and goals. To be able to set those out there and work toward them and know -- set those vision statements and mission statements that we need to perform well.
And I think those would be the two that have done -- otherwise, travel. I've been in some of these places and lived in other states and countries and know some of their needs or benefits and to be able to see how we can do that and do it better.
Q. All of us have natural prejudices, and I guess mine is when I see someone that was retired as a Colonel from the US Air Force, I immediately am prejudiced to think this person is a leader and maybe not a consensus person. And I don't intend to label you that way, but how do you view yourself? How do you work with people? Give me an example of working with -- you have six other commissioners to work with, how would you approach that?
A. I think you've got to pull aside -- aside up there. As a matter of fact, I was talking to one of the legislators the other day and I said, how do they use your special capabilities? Say this person is a medical doctor, do they ask you, you know, how would you do that? I think that's one of the things that we've got in each -- in each of the commissioners, you would have that expertise.
The other piece to do with that is get back down in, not hearing what -- in Columbia, but down on the level in the Duke Powers and the South Carolina Electric and Gas and maybe even those people that we don't regulate, the liquid gas people, how are we effecting you? Where is that going?
I was talking to a person the other day in the same way, I said how does that effect you, what happens if that gas line goes out a little further. If you're from the end of the gas line out, how does that effect you and the comment came back, well, they moved the gas line out this far, it cost me $15,000. Does it effect them? I see that as piece that we -- you know, the commission is not doing.
You in the Legislature -- you know, we've got to work with you. We've got to work with the people out there. We've got to work with the power companies and the utilities to be able to pull that all together. We are still all working for that citizen of South Carolina. I mean we're all servants from that standpoint.
Q. During your service in the military, you mentioned, I believe, that you lived in ten different nations and/or states. How long have you been a resident of South Carolina over your life?
A. I think all the time basically. Being a military person, you can have that state of residence be yours. And I think most all of the time -- there was one period when we lived in Florida, that we moved to Florida and moved the residency to Florida for a couple of years and then came back to South Carolina.
Q. How many years have you physically lived in South Carolina?
A. How many years have I physically lived here? Since I came back as a military person? I came back to the state in 1981.
Q. But you were actually born, I believe, in Walterboro?
A. I was born in Walterboro and grew up in St. George.
Q. And you were educated through high school, I believe, in Leesville?
A. Right. Yes, sir.
Q. That's all my questions, Mr. Chairman.
REPRESENTATIVE WILKES: Thank you. Are there any questions from any of the committee members?
SENATOR COURTNEY: Mr. Chairman?
REPRESENTATIVE WILKES: Senator Courtney.
EXAMINATION BY SENATOR COURTNEY:
Q. Briefly. Mr. Jordan, you have what appears to be a very impressive background in academia. Can you tell us what your degrees are?
A. I've got a degree in -- my BS degree from Clemson was in Education. My degree from Florida State was an MBA. And my degree from Boston U was a master's in international relations.
Q. Have you been involved in any political campaigns of any member of the General Assembly in the last six years as far as helping a campaign and donating to those that are serving now?
A. Last six years?
Q. Yes, sir.
A. Normally, military people are not political by nature by
-- it used to be by edict, I guess, or by design. I'm trying to think of who I voted -- would have -- I have voted --
Q. No, sir. I'm not asking --
A. -- for --
Q. But you haven't been actively -- or have you been actively involved in any campaigns as far as helping a candidate who is presently serving or donated money?
A. I have probably donated money to a political party. Is that --
Q. That's fine.
A. -- what you wanted?
Q. Yes, sir. Thank you. Thank you, Mr. Chairman.
REPRESENTATIVE WILKES: Any questions from any other committee members?
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. Jordan, if I might, I'm just going to hypothesize with you for just a couple of minutes. Do you consider yourself an emotionally driven or a logically driven person?
A. Well, I'd like to say I'm logically driven, but there are some subjects that I would imagine I would become emotional about. I try to be logical. I try to do those things that are -- look at the facts. Get to the bottom of them. I would say more logical than emotional.
Q. Not an extremist then?
A. I don't --
Q. Driven to --
A. Having served 26 years in the military and been pretty successful, I would say it would be more logical.
Q. So if a question were to come up where environmental concerns were pitted against the industrial development concerns, how would you approach a problem like that or --
A. I think what you've got to do that with balance and look at the pros and cons on either side, find out where those things are, find out what -- one of the things I like to do is ask the question why.
If you dig into the why questions deep enough, you will find what it really is and where it ought to be. I think the -- we've got some -- I was telling somebody a few minutes ago, they said something about living on the lake, you know there are some views out there that I wouldn't want anybody to block. I wouldn't want anybody to build on the other side of me, so I could see that view.
There is some -- we've got some beautiful pieces in this state and we ought to keep them beautiful. We don't always need to build things everywhere, but sometimes there is a fine line in there where you need to do things and where the state needs to step in and say we need to build there, we've got to do this to progress. I think it's -- I think that there is a balance in there somewhere that we have to look at, not only to provide the power or the utility that we need, but also to provide something for our children for the future.
Q. I think balance is the key word. Thank you, Mr. Jordan.
REPRESENTATIVE WILKES: If there are no other questions from the committee, you may be excused. Thank you so much for your appearance here today.
1. Mr. Lewis E. Jordan
Home Address: Business Address:
102 Lakeside Court 1017 Tiger Boulevard
Clemson, SC 29631 Clemson, SC 29631
2. He was born in Walterboro, SC on June 5, 1937.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *******.
S.C. Voter Registration Number: 2 072 055.
4. He was married to Kay Smith Howell on July 27, 1958. He has three children: Lisa Kay Jordan, age 32; Lewis E. Jordan, age 30, (Captain USAF, Hurlburt Field, Fla.); Jennifer J. Lawrence, age 26, (customer service representative, Charlotte, NC).
5. Military Service: USAF, Colonel, (top secret clearance), retired in 1985.
6. He earned a B.S. from Clemson University in 1959; earned an M.B.A. from Florida State University from 1967 to 1969; earned an M.S. from Boston University from 1971 to 1973.
9. He was in the Air Force from 1959 to 1985; and has worked in sales for Foothills Real Estate from 1985 to 1993.
26. Professional Organizations: The Retired Officers Association; The Air Force Association; Tri County Board of Realtors.
27. Civic, charitable, etc. organizations: Past District Governor, Rotary; Clemson Alumni National Council; Clemson Chamber of Commerce; Elder, Clemson Presbyterian Church; Board Member, Carolina Christian Ministries; Fellowship of Christian Athletes; Oconee Mental Retardation Association; Boy Scouts, Blue Ridge Board Executive Board and District Chairman; American Federal Bank Advisory Board.
29. Five letters of reference:
(a) Russ Hebert
RE/MAX Foothills Real Estate
P.O. Box 111
Clemson, SC 29633
(803) 654-4345
(b) Mayor Larry Abernathy
P.O. Box 1566
Clemson, SC 29633
(803) 653-2030
(c) Colonel Al Whitley
P.O. Box 340706
Clemson, SC 29634-0705
(803) 656-3254
(d) Mr. Roy Abercrombie
P.O. Box 1268
Greenville, SC 29602
(803) 255-7000
(e) Mr. Chris Olson
P.O. Box 1633
Clemson, SC 29633
(803) 654-3683
30. Third District
MR. COUICK: Mr. Chairman, the next person is Mr. Nave. I believe he's available.
MR. NAVE: Good morning.
MR. COUICK: Please take the far left hand seat here if you would. And while you're standing if you would raise your right hand.
JOHN THOMAS NAVE, having been duly sworn, testified as follows:
MR. NAVE - EXAMINATION BY MR. COUICK:
Q. Mr. Chairman, I have Mr. Nave's driver's license. It indicates that he lives at 606 Brooklane Drive in Greenwood, South Carolina, 29646. His voter registration card indicates the same residence. Mr. Nave, that is in Greenwood County; is that correct?
A. That's correct.
Q. Thank you. Mr. Nave, you had an opportunity, I believe, to review your Personal Data Questionnaire Summary? Have you had a chance to look at that --
A. Yes, I have.
Q. -- this morning? Are there any corrections you would like made to that?
A. One minor one, but not anything --
Q. If you would pass that up to Ms. Hammond at your convenience today, we'll enter that on the public record unless you have an objection?
A. No objection.
Q. Thank you. Mr. Nave, what is the reason that you've decided to run for the Public Service Commission? What would you like to accomplish while you're there if you're elected?
A. Well, I would like to be sure that the decisions that I would vote on would be fair to the -- both the people that provide the services and also the people that receive it. And other than that, specifically, I do not have any particular agenda to work on.
Q. Mr. Nave, you had forwarded in for the committee a statement which is in their notebooks. You did that by affidavit. You are certainly welcome, since you have complied with the committee rules, to read that at this time or would you just like -- simply like that entered into the record and be part of the journal of these proceedings? All members of the House and Senate would have access to it. What's your preference as to that?
A. That'd be fine, but I do have copies.
Q. Yes. We have that statement and we'll make it available to members and also the members of the House and Senate. Mr. Chairman, that's under the tab for Mr. Nave.
Mr. Nave, what one or two important issues are before the Public Service Commission that you would be most interested in effecting?
If you were to be elected, what would you hit the ground running on?
A. Well, having been a mayor of a city for 12 years and have some little -- some experience with the utilities in that area and having seen in our community the water rates go up in some instances 75 percent because the -- well, the city -- the Public Service Commission doesn't have any control over that, it's my understanding, and I think that's something that needs to be looked at as a possibility.
And also that the city -- some cities have the -- the council has control over the CPW and some don't. And I don't know that that's a decision the Public Service Commission would make, but it would probably have to come out of the Legislature. But I think that is something that needs to be looked at.
And then I think the bus -- transportation system, we do not have buses in Greenwood, but that is something that -- it would be something that has to be looked at in some of the towns that we do have it because people -- low income people generally speaking do -- have to ride buses a lot of times and I think that's something that needs to be looked at.
Q. What would be your approach to the bus problem?
A. I think you have to approach -- any problem that I have been dealing with, you've got to look at both ends of the spectrum. If you've got a company that can't make at least a fair margin of profit, then they can't stay in business. So you have to balance that, I think, with the service that they render to be sure that they do have the proper service and then to do it at an economical rate as far as they're concerned. I think it's a balancing act proposition.
Q. SCE&G currently offers a bus service in several cities in South Carolina. It in effect is a loss to that company; they do not make a profit on the bus service, but they continue to provide it under mandate of the Public Service Commission.
If you were to be elected to the Public Service Commission, would you change that policy? Would it continue to be a mandate even though it was a loss in terms of business income?
A. Well, I think you would have to look at it from the standpoint of the public need for it and whether or not that company had other areas that they were making a profit in. Now, that's not the only thing that they're in.
Q. So you would consolidate their profits and losses?
A. I think you would have to look at the need and look at it from that standpoint. I don't think you can say because you don't make a profit in every area that you're in to be able continue to the service, but I think you'd have to look at the bottom line as so many people call it to determine whether or not what the best would be.
Q. Yes, sir. Do you own any utility stock, Mr. Nave?
A. Sir?
Q. Do you own any public utility stock?
A. I don't -- no, sir, I don't own any stock at all hardly.
Q. How about your wife?
A. None.
Q. Anybody in your household own any utility stock?
A. No, sir.
Q. Would you -- do you have any business employment at this time? Are you employed?
A. No, sir. I'm the mayor of Greenwood, South Carolina and that term will end in April and I've been retired from the Air Force and also Abney Mills as a aviator and chief pilot.
Q. So the last employment you had was in 1979 other than as mayor and you worked for the Abney Mills there in Greenwood as a pilot; is that correct?
A. Oh, no. I worked for the Midland Ross Grimes Aviation Light factory in Greenwood for two and a half years as chief inspector and set up that department and ran it for two and a half years.
Q. And then you were in real estate?
A. Then I sold real estate. And then I also taught at Piedmont Tech part time.
Q. Would you have any other employment other than serving on the Public Service Commission if you were to be elected?
A. No, sir. I can give full time to it. And incidentally I've been mayor for eight years and I've only missed one council meeting and I was in London and it was a little far to commute, so I didn't make that one. Other than that, I made them all.
Q. You mentioned that balancing act that has to be done between industry and consumers. Often times there is a
-- one or two other things that have to be considered and one of the more recent concerns in the last 20 years has been the environment. How would you consider environmental issues as a member of the Public Service Commission?
A. Well, I think that environmental issues are very important because if we destroy our environment then we're all going to suffer. And I think that one of the things that we have to be concerned with is whether or not the equipment -- particularly the equipment that the buses and those people are operating would be environmentally safe.
And now as the -- I believe the nuclear facilities are controlled by a higher authority than the Public Service Commission, but I think it's very important and there again you've got a balancing act, but you sure don't want to destroy your environment while you're doing that balancing act.
Q. Should consumers be prepared to pay extra for electrical power if that extra power would go to make the production of the power environmentally safe?
A. That's a tough question I think. But if that's the only source of revenue and you have to do that, I don't see that you have a choice, but I think you have to look at it very closely because consumers only pay so -- you know, a reasonable amount. But that would be a difficult one that you'd have to balance out, but it's kind of like being the mayor.
If you increase services and you have to raise taxes to do that, then that's a tough decision that you're elected to do. And in my particular situation as mayor of Greenwood, for the last four years, we haven't raised taxes and we have not borrowed any money and we don't owe any monetary indebtedness, so I think I've had some experience in trying to balance that balancing act I'm talking about.
I think the efficiency and the management of a situation is one of the things that you have to look at. And if you don't have good management, and there has been a lot of restructuring done in a lot of industry and I suppose it's also being done in the areas that the Public Service Commission would control, but I think that would be one area that you would have to look at, if you don't have good management and really do an efficient job there, then you're in trouble. I wouldn't say no.
Q. Right. I understand.
A. In other words, I think you'd be less than smart if you said no, I wouldn't do this or I wouldn't do that because the circumstances might dictate that you have to do it.
Q. Mr. Nave, you have cable television service there in the City of Greenwood, I believe?
A. Yes, sir.
Q. You have a franchise ordinance that governs the provision of that?
A. Yes, sir.
Q. Have ya'll had any problems insuring that that service is distributed to all parts of your community?
A. No, sir. And we're also in the process of passing the necessary ordinances to control that in the future in accordance with this new law that came down from Washington.
Q. So you're in the process of renegotiating your franchise?
A. No, no. The franchise it's -- I think they got a 10-year franchise and we can't do anything until that runs out. But we're now in the process of reviewing that. Incidentally, that's an area which I think is going to come up.
We have to communicate with attorneys in California to get any answer to any questions and then we can't find out anything from the local. And our city manager has spent a good bit of time on the telephone and down here in Columbia in determining what would be done and what we should do. But we will have -- the city will have to control their -- that. The only thing that we control in the city is the taxicab.
Q. But in terms of the provision of cable service, have you had many complaints from any segments of your population that they're not adequately served in terms of --
A. Very little.
Q. -- lines being run to their homes or whatever?
A. No, within the city limits itself, we've had very little problem with that. We had the competitive service that came into being and we gave them a franchise also about four years ago and they did a good job, but then naturally they sold out and took their money and walked.
But the service has been very good and we've had a little complaint about the increase in cost, but if you compared that with other cities of comparable size, we weren't in any real trouble. We couldn't do anything about it until recently anyway.
Q. And, finally, Mr. Nave, how many employees does the City of Greenwood employ?
A. About 180.
Q. And you've been mayor for how many years?
A. I'm in my 12th year and it will be 12 and a half when -- if I make it to April.
Q. What type of program do you have for minority hiring and in particular for hiring folks that would be in positions of policy setting?
A. Well, I'm glad you asked that question because before I ran in '86, I was called into a group of ministers and asked what my attitudes were toward minorities and it hasn't changed. My attitude is that you hire the most qualified person provided you are in reasonable amount of balance as far as your concern.
If I had two people and they were the same qualifications and I was out of balance, then I would obviously take the minority. To show that that -- and I can't take a whole lot of credit for this. The City manager hires and fires everybody except the City Attorney and the City Judge and himself.
And in the six years that I've been there, we've increased the number of minorities to 13 in the Police Department out of 50. We've got 10 in the Fire Department out of 47. We have an administrative assistant that is a minority. We have an assistant chief of police is a minority. We have the court administrator is a minority. And he has three people working for him and I kid him, I say we've got to integrate that place, we've got -- the whole department is black.
So that's my philosophy and I think because of that philosophy, it has worked in our community and the reason I feel that way about it, if you would give someone a job because of whatever reason and they're not qualified and they're identified with some group, it's a reflection on the individual and going to create a problem as far as in your management. And it's also a reflection on them as -- and the group that they represent. So my philosophy is we need to educate, qualify and then as far as possible, hire them.
Q. Thank you, Mr. Nave.
REPRESENTATIVE WILKES: Thank you. Do any of the members of the committee have some questions for the candidate Mr. Nave?
SENATOR COURTNEY: Just one.
REPRESENTATIVE WILKES: Senator Courtney.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. Nave, you say that you taught at Greenville Tech for some period of time?
A. Greenwood.
Q. Greenwood. I'm sorry. Greenwood.
A. Piedmont, they call it.
Q. What subject did you teach there?
A. Blueprint Reading for Welders.
Q. Okay. Thank you?
A. And that was an interesting experience. We had the students that range from 6th grade education to one year in college and trying to teach them the same subject, that will get your attention.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. Nave, I have one question I'd like to draw on your experience as a mayor and, obviously, having been involved in, it looks like a lot of the planning in Greenwood County. Greenwood County has some urban areas and a lot of rural areas as well. How do you propose that we get infrastructure into the rural areas, so that we can get jobs to the folks that are living in the rural areas?
It seems that most of the development has been concentrated in urban areas and a major concern of a lot of folks out in the country is that there is -- they can't get jobs because no industry will locate because there is no water, sewer, gas and electricity?
A. Well, I think I addressed a few minutes ago the fact that the city council does not control the utilities.
Q. Yes, sir.
A. And that's both been a blessing and a curse. The curse part is we can't annex, so that our population has decrease by 800 in the last ten years, but the utilities which is owned by the city residents serves about 80 percent of the population.
In fact, in 1958 when industrial development was a prime subject in our community, the community leaders got together and said we've got to establish some industrial strip and that industrial strip is out toward Lake Greenwood. In the process of doing that, they assured that they had infrastructure that you're talking about, water and sewage treatment, gas and electricity.
Now, the City of Greenwood owns their electricity and I would think that's a problem that you're talking about, but you've got to have water and sewerage or you're not going to attract any industry. And we've done very well in Greenwood. In fact, I think we may very well lead the state.
We were fortunate in that we don't have a lot of special service districts in that regard and at the present time, there is movement afoot in Greenwood of which I've had something to do with to combine the City and County government under the Act that was past by the General Assembly about two years or something like that.
We've got more combined services I think in Greenwood County than any other county in the state and I think that's a key thing.
Q. Thank you, Mr. Nave.
REPRESENTATIVE WILKES: If there are no other questions, you may be excused. Thank you so much for your appearance before the committee today.
A. Thank you, sir. I appreciate it.
1. John Thomas Nave
Home Address: Business Address:
606 Brooklane Drive P.O. Box 40
Greenwood, SC 29649 Greenwood, SC 29648
2. He was born in Mountain City, Tennessee on September 18, 1921.
Social Security Number: ***-**-****.
3. S.C. Driver's License Number: *********.
S.C. Voter Registration Number: 0 514 868.
4. He was married to Ella Erminie McKnight Nave on March 17, 1951. He has 3 children: Thomas B. Nave, age 41 (design and home construction); Kathy Lynn Nave Felder, age 38 (bank marketing); and Debbie Nave Jobe, age 37 (housewife and mother).
5. Military Service: He served in the U.S. Air Corps from April 5, 1943 to March 6, 1946; the U.S. Air Force from October 28, 1947 to April 11, 1955; and the U.S. Air Force Reserves from April 1955 to August 1968. He retired in 1981 as a Lieutenant Colonel. Serial #AO-833188.
6. He attended Johnson County High School (Mountain City, TN) from 1936 to 1940 and East Tennessee State College (Johnson City, TN) from 1940 to 1942, when he left to study engineering. He attended the University of Tennessee (Knoxville, TN) from 1942 to 1943, when he left to enter Aviation Cadet Training. He was a 2nd Lieutenant Commission and Pilot Wings Aviation Cadet from 1943 to 1944. He attended East Tennessee State University from 1946 to 1947 and received a B.S. in Industrial Arts Education. He attended North Carolina State University from 1947 to 1953 and received a Master of Science Degree in Industrial Arts Education.
7. He was Mayor of Greenwood from 1967 to 1971 (two 2-year terms) and from 1986 to the present (two 4-year terms, expiring in April 1994). He has been appointed to: Greenwood County Airport Commission (1963-1966); Greenwood County Planning & Zoning Commission (1976-1979); and Chairman, Greenwood Area Transportation Study Commission (1986-present).
8. In 1982, he ran unsuccessfully as a Republican against a Democratic incumbent who held S.C. House District 14 and had been uncontested for many years.
9. He was Chief Pilot at Abney Mills in Greenwood from January 1956 to November 1979. He was responsible for the purchase and maintenance of aircraft; hiring and training other pilots; and preparing and submitting the budget for the Aviation Department, which was terminated in 1979.
He was a pilot for Spartan Mills in Spartanburg from December 1979 to June 1981; Chief Inspector for Midland Ross Grimes in Greenwood from 1981 to 1982; in real estate sales from 1982 to 1986; and owner/manager of an Avis Rent-a-Car franchise from 1960 to 1977.
19. He was with the U.S. Air Force from April 1943 to February 1946 and November 1947 to June 1955. He was an Aviation Cadet, aircraft commander, and AFROTC instructor. He was an Industrial Arts teacher at Shelby High School from May 1955 to June 1956; a reserve USAF pilot from June 1955 to June 1968; Mayor of Greenwood from April 1967 to November 1971 and April 1986 to the present; and a part-time instructor at Piedmont Technical College from January 1986 through June 1986.
26. Professional organizations: Vice-President and Chairman of Federal Legislative Committee, S.C. Municipal Association (1968).
27. Civic, charitable, etc. organizations: Committee Chairman, Lions Club; Commander for 2 consecutive terms, American Legion Post 20; Chairman of Education, Aviation, and Airports Committees, Chamber of Commerce; School Improvement Council, Central School (alternative school) for 6 years; Industrial Development Committee (Ex-officio) for 8 years; Upper Savannah COG Board for 8 years; Pack Leader for Cub Scouts for 2 years; and First Presbyterian Church Deacon, Elder, teacher, youth advisor, and chairman of several committees--including Pastoral Search Committee.
28. He served for 3 years on the Greenwood County Planning and Zoning Commission; 3 years on the Greenwood County Airport Commission. He was Greenwood County Republican Chairman and State Executive Committeeman for 2 terms; Delegate to State GOP Conventions for many years and alternate delegate to the National GOP Convention in 1972 and 1974. He received the Order of the Palmetto in 1993.
29. Five letters of reference:
(a) Steve O. White
NationsBank
P.O. Box 1058
Greenwood, SC 29648
(803) 942-1678
(b) J.C. Self
Greenwood Mills
P.O. Box 1017
Greenwood, SC 29648
(803) 229-2571
(c) E.I. Davis, Jr.
Davis & Floyd, Inc.
P.O. Drawer 428
Greenwood, SC 29648
(803) 229-5211
(d) Jesse A. Boyce (Ret., Abney Mills)
106 Rutledge Road
Greenwood, SC 29649
(803) 229-6134
(e) William H. Harrison (Ret.)
504 Lodge Drive
Greenwood, SC 29646
(803) 229-0660
30. He is seeking the office of Public Service Commissioner for the Third District.
THE CHAIRMAN: We're going to now adjourn until 1:45. We have, I think, about five more.
MR. COUICK: Six more.
THE CHAIRMAN: Six more candidates. I might have to leave you around 3:00 or 3:30, but Mr. Wilkes will be here. All right. We'll recess right at this time.
(A lunch break was taken)
THE CHAIRMAN: I'll call the meeting to order.
MR. COUICK: If you would stand and please take the oath.
PHILIP TIBBS BRADLEY, having been duly sworn, testified as follows:
MR. BRADLEY - EXAMINATION BY MR. COUICK.
Q. Mr. Chairman, I have Mr. Philip T. Bradley's driver's license. It shows a residence of 6 Cross Court, Greenville, South Carolina, 29607. Mr. Bradley, is that your current address?
A. Yes, sir. That is correct.
Q. And that is in Greenville County; is that correct?
A. Yes, sir, it is.
Q. Mr. Bradley, have you had an opportunity to review your Personal Data Questionnaire Summary?
A. Yes, sir, I have.
Q. Were there any corrections you wish to make to it?
A. No, sir, not that I determined.
Q. Well, if you have no objection, we'll make that a part of the permanent record of these proceedings?
A. I have no problem.
Q. Mr. Bradley, there are certain matters that involve materials that you forwarded to the committee and, Mr. Chairman, would you like to discuss those in Executive Session?
THE CHAIRMAN: Ask staff to take notice of them.
Q. Mr. Chairman, there has been a report from SLED also a credit report on matters including further information that Mr. Bradley has provided to the committee as documentation. He has a clear record with both and we appreciate that, Mr. Bradley.
A. Yes, sir.
Q. Mr. Bradley, please brief the committee on your employment history, if you would?
A. When I was a student at Furman University in 1968, I started working for a very small real estate company doing just rent collection. In 1969 when I graduated from Furman, I went to work for a company, John Cothran and Company, which then became Cothran, Sims and Barker Brokers. I did sales and marketing.
In 1974, I opened my own real estate firm and continued in that until 1983 which at that point I became employed with the Austin Moving and Storage Company as vice president of marketing.
In 1985, we opened a real estate business and I'm still employed in that at this point.
Q. The real estate business that you operate, is that commercial and residential?
A. It used to be primarily residential and now it's primarily commercial.
Q. Do you have any persons who rent from you or lease from you that are regulated utilities?
A. No, sir.
Q. Should you be elected to the Public Service Commission would you continue to have an involvement in that enterprise?
A. What I would do, Mr. Couick, is I would close my own real estate company. I would place my real estate license in association with another firm in Greenville because I have a broker's license, I would just like to keep active. I don't intend to use it, but once you get certain licenses, once you let them expire it's rather difficult sometimes to --
Q. So you would not actively sell real estate or lease real estate once you're --
A. No, sir.
Q. -- on the commission?
A. No, sir.
Q. Would you have any residual income coming in from Philip T. Bradley, Incorporated?
A. No, sir.
Q. There are no leases out there that have any type of brokerage commission on a month to month or year to year basis?
A. No, sir.
Q. In 1986, you were indicted by the Richland County Grand Jury for misdemeanor obstruction of justice. Those charges were dismissed by the Fifth Circuit Solicitor, Mr. James C. Anders, less than one month later.
Without replowing all that old ground, Mr. Bradley, have you had any further contact by the Fifth Circuit Solicitor's Office with regard to those charges since they were dismissed in November, 1986?
A. No, sir, none whatsoever.
Q. Do you own any utility stock, Mr. Bradley?
A. No, sir, I do not.
Q. Does anyone in your household own utility stock?
A. No, sir. They do not.
Q. You have one daughter, Andrea Lee Bradley, who is a student at the University of South Carolina, Spartanburg, is she -- does she have any employment?
A. No, sir. She does not.
Q. Mr. Bradley --
A. Mr. Couick, let me stipulate this, I say she does not, she lives with her mother and as the record states I am divorced. She lives with her mother. She does not have any employment that I am aware of.
Q. I understand. And my main concern was whether she was employed by a public utility or not, of course.
A. No, sir. She's doing what she can to graduate.
Q. All right. Why would you like to serve on the Public Service Commission, Mr. Bradley?
A. Because I think with the -- my past experience and the abilities I have that I could lead the Public Service Commission in some directions that the future is going to dictate to us. It's -- we're probably all aware the telecommunications industry is just exploding.
Vice President Gore keeps referring to the Superhighway of the telecommunications industry being built. The only problem is it's already built and the Public Service Commission in all states, in some places they're referred to as the Utility Commission, are going to have to react to federal legislation that will come down.
There is a lot of deregulation being talked about in the federal government. Not only in that communication industry, but also in the trucking industry. It's going to require the State of South Carolina to probably pass some legislation, maybe look at repealing some other legislation.
And I think that with my past legislative experience that I'd be a real asset to the Public Services Commission in dealing with the legislators. I feel like that I know a good many of the members. I know the process. Also the -- according to the Appropriations Bill that is currently being discussed, there are approximately 45 state agencies that are state -- or lobbyists that are employed by state agencies and, of course, the Public Service Commission does not do that. So I think that it's important that the Public Service Commission have a commissioner who is very familiar with the legislative process and knows how the process works and to work hand in hand with the Legislature itself.
Q. You were talking about the telecommunications revolution and the need to legislate in that area perhaps. What deficiencies specifically can you note in the legislation that we have now governing telecommunications that you think would need to be corrected?
A. Very -- very specifically, I would make this comment, I can't be specific on a particular, you know, part of the statute law or something like that, but to use an example, for instance, at this time the -- a lot of the phone companies are running fiberoptic cable and they would like to get into the cable business.
The cable business, say, TCI here in Columbia was just bought out by Bell Atlantic. They want to get into the cable business. Southern Bell, I think is in the telephone business, would like to get into the cable business. TCI would like to get into the phone business.
In regard to that type of innovation that's coming on-line, technology methodology of doing things is just totally changing. One of the problems that we have in the industry itself is that obsolescence is now -- obsolescence of equipment is now more of a problem than wear and tear on the machinery.
I think that one thing the State Public Service Commission is going to have to look at is to look at the length of time that we allow the phone companies, telecommunications people doing business in the state, the length of time they amortize their equipment over. I think we're going to have to look at shorter periods of time because what's in service today, three years from now will be obsolete.
Q. Yes, sir. What -- just in terms of kind of looking at this from a broader perspective telecommunications, do you not see a tension there between folks who want to make telecommunications everything, allow all those things into the rate base perhaps of a phone company and that lady who lives in Pelzer, South Carolina, who just wants to be able to pick up her phone and get a dial tone to call the doctor and what effect that may have on her phone bill and how would you handle that tension if there is some there?
A. Well, I think people should only be charged for the services that they actually get themselves, but the availability is going to have to be there for people who want more service.
You know, I would kind of use an analogy of basic cable which has in Greenville five channels that come in or you can buy more. You can ESPN and CNN and all those things. And I think that as far as basic service is concerned that it should be and is the primary responsibility of the telephone utilities. And there are several programs in place that, for instance, helps with the cost of poor people being able to have installation.
And so to provide service and service is wanted and needed, the cost should not be borne by the little lady who only needs service on a limited basis to make sure she has contact with her neighbor or with her doctor versus somebody maybe who wants, you know, the evening newspaper over the computer in their office or all the cable channels and all these types of things.
Q. In that instance, Mr. Bradley, if that lady in Pelzer has that phone and the Southern Bell Company decides to run fiberoptic because the doctor's office and the lawyer's offices want to be able to link up with folks in other parts of the country, they run fiberoptic in place of the copper coaxial cable they have down now, which certainly does the job for the phone service and that runs by that lady's house and they automatically tap her into that or take it all the way to the house depending on what plans they have, is it appropriate for the doctor and lawyer to be bear the cost of her doing that or does she really have a choice? I mean, how are we going to allocate these costs where what we do is change over the whole system when the existing system handles the base level of what folks need now?
A. I think that what we're going to have to look at is that the base service that people get at this particular time that their costs would be pretty much in line with what they're paying now, particularly -- you know, there are a lot of different variables in the formula, but I would just say that we just have to look at providing the basic service that somebody is now getting at about the same basic costs.
Q. There are lots of different hats that folks wear at the Public Service Commission and even individual commissioners differ in their priorities. You mentioned that you thought that yours, to some degree, was to be a
-- I don't want to use a word that's disparaging because certainly I personally feel there is no -- nothing negative intended by the word lobbyists. You thought you would be a lobbyist from time to time.
If that's one hat that you could wear, a lobbyist, another one is a traffic cop, another one is public relations generally with the consumer -- consuming public and the other is a judge, which one do you think you'll be wearing most often?
A. Well, the purpose of the Public Service Commission is to make sure that access to all utilities is available to the consumers, that it is at a fair price and that the utilities get a fair rate of return on their investment.
Utilities are a little bit a strange animal in the business world because they in the past have been somewhat granted a monopoly or monopolistic and it just creates a different atmosphere. The -- they primarily get their money for capital improvement from investment and it's the responsibility of the Public Service Commission to make certain that their rate of return is fair and acceptable and it does create the atmosphere for the investor.
And to say specifically which hat did I feel like I would wear most regularly, I think it depends on what's happening at any particular given time. If you're having a rate hearing on an electric rate increase, say, from SCE&G, I think you're wearing one hat. If you're dealing with pipeline safety requirements in natural gas, you're wearing another hat.
If there is a piece of legislation over in the capitol that effects the consumer or effects, you know, the Public Service Commission and the operation thereof, if you're talking about the Administrative Procedures Act and regulations being presented to the General Assembly. It just depends on what's happening, which hat you're wearing.
You say you'd wear one more than another in any one given year, I don't know that you could say that.
Q. You graduated from Furman University in 1969, what did you take your baccalaureate degree in, Mr. Bradley?
A. Business Administration. And I had several courses in government finance.
Q. Mr. Bradley, you have recently served on the South Carolina Election Commission?
A. Yes, sir.
Q. And, please, if you would inform the committee although they have a copy of your letter of your recent decision with regard to your services.
A. Yes, sir. Be glad to. I made the decision back early in December that I would resign from the South Carolina Election Commission before meeting with this panel. It was my opinion when I served in the General Assembly that if you basically had one office and you wanted to seek another, that you should give up one before you seek the other.
Also particular with the State Election Commission, what we have tried to do and I personally have tried to do is maintain the integrity of that body. And I don't want anybody that is -- you know, I would possibly be asking for support for this to say, "Well, maybe I ought to support Bradley because if I don't and then I have a contested election, I've got to go in front of him for a protest hearing," and I just personally want to take myself out of that position. I don't want anybody to feel that way. I would like to have the support based on my qualifications and ability to do the job. And that purely and simply alone.
Q. Mr. Chairman, that's all of my questions.
THE CHAIRMAN: Any questions from any member of the panel.
SENATOR COURTNEY: Mr. Chairman?
THE CHAIRMAN: Senator Courtney.
MR. BRADLEY - EXAMINATION BY SENATOR COURTNEY:
Q. Just a couple. Mr. Bradley, you spoke several times about your past experience and how that would help you as a Public Service Commissioner?
A. Yes, sir.
Q. And you talked about the communications highway and so forth and how your past experience would help you with that, what is your pa