Docstoc

Joint Sunset Committee

Document Sample
Joint Sunset Committee Powered By Docstoc
					                                    Joint Sunset Committee
                                Wednesday, April 4, 2007, 1:00 p.m.
                   Joint Finance Committee Hearing Room, Legislative Hall
                               Committee Meeting
        Office of the Public Advocate and the Public Service Commission
_____________________________________________________________________________________

JSC and Staff: Sen. Sokola, Chair; Rep. Valihura, Vice-Chair; Rep. Viola; Sen. Connor; Sen. Bunting;
Rep. Longhurst; Rep. Hudson; Rep. Maier, Deebie Puzzo, JSC staff
Absent: Sen. McDowell (conflict); Sen. Bonini (illness)

Public in attendance: Arthur Padmore, Public Advocate; John Citrola, Deputy Public Advocate; Bruce
Burcat, PSC, Arnetta McRae, PSC; Joann Conaway, PSC; Janis Dilard, PSC; Karen Nickerson, PSC;
Gary Myers, DAG; Michael Sheehy, PSC; David Bonar, PSC; Jay Lester, PSC; Patrick Allen,
Department of Justice; Jennifer Oliva, Department of Justice; David Spacht, Artesian Water; Dian
Taylor, Artesian Water; Stuart Linder, Artesian Water; Jack Schreppler, Artesian Water; Steve Baccino,
Delmarva Power; Bonnie Metz, Verizon; Bill Powers; John Paradee, PJ&E; Bill Wood, Wood Assoc.;
Gary Warren, FB; Wayne O’Dell, Cable Assoc.; Ellison Carey; David Carey.
_____________________________________________________________________________________

AGENDA
  A. Welcome
  B. Approval of Minutes
        1. Committee Meeting - February 21, 2007
        2. Public Service Commission – February 21, 2007
        3. Division of the Public Advocate – February 27, 2007
        4. Council on Development Finance – February 27, 2007
  C. Division of the Public Advocate
        1. Discuss Draft 2 Recommendations
  D. Public Service Commission
        1. Discuss Draft 2 Recommendations
  E. Any Other Business
  F. Adjournment

Senator Sokola called the meeting to order at 12:10

A. Welcome
Senator Sokola welcomed everyone. Introductions were made.

B. Approval of Minutes
        1. Committee Meeting - February 21, 2007
        2. Public Service Commission – February 21, 2007
        3. Division of the Public Advocate – February 27, 2007
        4. Council on Development Finance – February 27, 2007
Senator Sokola stated that the minutes referenced in item B/4 (Council on Development Finance
– February 27, 2007) were not yet ready to be reviewed. A motion was made and seconded to
accept items B/1,2 and 3. The motion was approved.

C. Division of the Public Advocate
          1. Discuss Draft 2 Recommendations

                                                  1
A. The Joint Sunset Committee recommends the following statutory changes:
Recommendation #1. Restructure the DPA
a. Move the DPA to the Consumer Protection Unit within the Office of the Attorney
    General;
Senator Sokola stated that he and Representative Valihura sent a letter to the Attorney General
(AG) requesting comment on relocating the DPA under the AG’s office. The Senator stated that
a number of states have their Public Advocate under the Department of Justice.

Jennifer Oliva, Chief of Staff, Office of the AG, said, “The AG’s initial reaction to the
suggestion was positive, and he thought it sounded like a great idea. We have looked at other
jurisdictions and see the exact same thing that you just noted which is that about a third of the
states do have the public advocate position division, department or whatever they might call it
housed within the AG’s office. We have been tasked right now by the AG to research and make
a final recommendation to him so that he can take a position on this, affirmatively or negatively.
But his initial reaction was we didn't see a problem with it. The ultimate issues would be
technical for us in the sense of personnel and space – where we would put these additional
people since we are out of space, and those sorts of things that are more technical rather than at
large, sort of the global idea of having the office or the division within the AG’s Office.”

Senator Sokola commented that when you move something jurisdictionally, you don't
necessarily have to move it physically.

Senator Bunting said he wanted the JSC to review the Consumer Protection Unit next year, and
he would have some concerns about adding more responsibility to a Unit that may be having
troubling handling its current responsibilities. The Senator’s concerns relate to the
Landlord/Tenant issues.

The Public Advocate, Arthur Padmore, said he is concerned about to whom the Advocate would
report. Mr. Padmore stated that if he reported to the AG than the AG would be involved in
regulatory policy as far as the Public Service Commission is concerned, and Mr. Padmore
believes some internal conflicts could arise.

Ms. Oliva asked when the JSC wanted a response from the AG.

Senator Sokola said he would like a response sent to JSC staff, Debbie Puzzo, by the time the
Legislature returns from break on April 24th.

Ms. Oliva stated she would have a response to the JSC by the end of the break.

Further discussion regarding Recommendation A1a was deferred until the JSC receives a
response from the AG’s office.

b. Increase the staff of the DPA;
Senator Sokola asked whether the DPA made any requests for additional staff to the Joint
Finance Committee (JFC) or whether there were any proposals in the Governor’s proposed
budget.

Mr. Padmore said this is a welcome recommendation. In the previous year the DPA did request
an additional staff member to handle the increased paperwork, however the DPA has not made
any request for additional staff for the next fiscal year. Mr. Padmore stated that if the
recommendations come to fruition, there will be a need for at least another analyst.
                                                   2
Senator Sokola asked whether the DPA has made any suggestions as to how to fund additional
positions.

Mr. Padmore replied that the DPA gets 100% of its funding from the Public Utility Revolving
Fund. When the staff was increased, the position was funded 100% from that fund. Mr.
Padmore said he would hope that Mr. Burcat and the Chair of the PSC would have a positive
view of his request for additional funding from the shared pool.

Further discussion regarding Recommendation A1b was deferred until the JSC receives a
response from the AG’s office.

c. Provide additional funding for the DPA;
Senator Sokola asked Mr. Padmore whether he feels his office is underfunded.

Mr. Padmore said the Department of State has been very cooperative in meeting the DPA’s
needs, which have always been modest.

Senator Bunting asked how the funding mechanism would work if the DPA is moved over to the
AG’s office. Funding should be made clear if the move happens.

Senator Sokola stated that the AG’s has a variety of funding sources.

Representative Valihura said that he would expect that the mechanism that is already in place
would be transferred to the AG’s office and the AG would be responsible for advocating each
year to the JFC for additional funding or mechanisms for funding. Representative Valihura
stated that if the JSC adopts Recommendation A1A there will be a need to clearly articulate the
funding source. He also stated that additional funding is necessary for the DPA regardless of
whether or not the DPA moves to the AG’s office.


d. Provide the DPA with the services of a Deputy Attorney General; or
Provide the DPA with Internal Legal staff;
Senator Sokola stated that there is a natural overlap of the issues for A1b, c, and d, because if
the DPA is provided with the services of a Deputy AG, does the funding come from the existing
AG’s office funding or is that something that can arguably be passed along through both the
mechanisms that have already been suggested. It could be, but it would certainly have to be
subject to audit in justifying all the costs associated with that.

Mr. Padmore said that when he saw the recommendation for a DAG he assumed that it would be
done in a way that was similar with setup at the Public Service Commission.

Representative Valihura asked Mr. Burcat to explain the current DAG position at the PSC.

Mr. Burcat replied, “There basically is something called the Public Service Commission
Revolving Fund. We have revenues that are directly derived from the utilities that we regulate.
We are not general funded, we are ASF funded. About 10 years ago, the Public Advocate's
budget, which had always been generally funded was put under the Commissions funding
mechanism because we usually had a pretty significant amount of difference between what we
spent and what was being collected at that point in time. As you recall, it didn't take very long
with the addition of the public advocates office that we had to increase the millage to the utilities
                                                  3
to 3 mills instead of 2 mills, and so we are now – even though we have adequate funding and we
are appreciative of the 3 mills increase, the costs generally for this type of regulation are
increasing you know we are doing some pretty dramatic cases at the moment. If the Public
Advocate is separated from the Department of State, then we lose an awful lot of control, or the
Department of State would lose the control over the way the 2 agencies are funded, and if they
are adding new people that is outside our control, I could see that we would run into a situation
where we would be not able to fund both agencies at that point. So I do have some pretty
significant concerns about taking funding that was designed for the Public Services Commission
operations and moving it out to an agency that is no longer tied with the same department, where
we could at least keep an eye on those costs and be able to work with the department to
determine how we can fund both agencies. So I do have a serious concern about that.”

Representative Valihura asked how the DAG position within the PSC is funded.

Mr. Burcat replied that it is a direct pay from the Public Service Commission’s Revolving Fund.

Senator Sokola asked how the millage in Delaware compares with other jurisdictions.

Mr. Burcat replied, “We looked at it a few years ago. … A lot of states do it through their
general fund. Some states that have a lot of large utilities who can afford the millage assessment
and not really have too much of an impact have lower millage assessments. There are a lot of
states like Delaware, that have even higher assessments that are done through that mechanism. I
mean, one way to do it would be to have the Public Advocate's office be able to charge, and I
think that was recommended 9 or 10 years ago in a report, that they ought to have their own
funding mechanism, maybe their own separate millage charge that they were able to charge, and
it wouldn't be tied into the Public Service Commission’s budgeting needs.”

Mr. Padmore stated that the DPA does not have the same pass through mechanism that the PSC
has for its operating expenses. In additional to the millage, the Commission can bill the utilities
directly and get reimbursed.

Representative Valihura asked how DPA counterparts are being funded.

Mr. Padmore replied that some are similar to Delaware and some are funded through the general
funds.

Further discussion regarding Recommendations A1a-d were deferred until the JSC receives a
response from the AG’s office.

Recommendation #2. Amend the statute to mandate that the Public Advocate be an
attorney.
Mr. Padmore stated that he is an attorney although he is not a member of the Delaware Bar. He
stated that although he believes it would help if the Public Advocate was an attorney it is not
absolutely necessary, especially if the Legislature is going to improve the access to legal counsel
or give access to the AG. Mr. Padmore said that his predecessor was not an attorney but was
quite an expert in regulatory matters and did a fine job.

Senator Sokola said, “The reason this comes up is that people naturally assume that if the Public
Advocate is an attorney, some of the legal costs might not be as high, but you make a very good
point. In fact, I have seen and even heard from advocates on utility matters who weren’t
attorney's who would be terrific in a position as public advocate. Some of them are some of the
                                                  4
most informed, most detailed researchers. There are a lot of skills that go into being a public
advocate in addition to the potential benefit from being an attorney”

Senator Bunting said he doesn’t think it should be mandated that the Public Advocate be an
attorney. The job has many facets and being a good administrator is critical, as well as how the
DPA responds to the public.

Representative Maier asked whether the DAG for the PSC could assist the DPA like is done with
DAGs for boards and commissions.

Mr. Burcat replied, “…there would be a direct conflict there. They [DPA] are a party in the
proceedings. They may take a completely different viewpoint than the Commission staff that
generally is represented by the AGs office and the commission itself. So it could be that they are
providing advice to one client who is representing very specifically focused to the residential and
small commercial customer, where we are trying to balance the interests of the customers in the
utilities, so that to me is a conflict. That is my personal opinion on it.”

Mr. Padmore stated that he agrees. There are instances where the Commission staff take a
position that is contrary to the DPA’s position, and as such, there would be a conflict for a shared
attorney.

The JSC didn’t take any action on Recommendation #2.

Recommendation #3. Amend the statute to clarify the role of the Public Advocate to
include providing advice and recommendations to the General Assembly, the Public
Service Commission and the public with regard to energy issues that affect Delaware’s
Public utility consumers.
Representative Maier asked the Public Advocate to provide the legislators with brochures so that
they can distribute them at civic association meetings.

Representative Valihura said that as a member of the JSC for the past 9 years, he has seen
Boards and Commissions that have a very narrow focus. He stated that the Council on Housing
is an example of the lack of specificity in the mission statement, and the Council’s failure to
broaden what they should be doing. Rep. Valihura said that it is absolutely clear that this
recommendation should be adopted and set forth in statute.

Senator Sokola stated that he agrees and doesn’t remember the DPA providing the legislators
with any recommendations or comments regarding energy issues. Many agencies present
legislators with a packet of comments and recommended changes.

Mr. Padmore said that the recommendations came in the form of input at past hearings. In 2001,
he did make legislative comments regarding the transition from regulated and deregulated
electric environment.

Senator Sokola stated that he thinks the JSC should adopt this recommendation. He suggested
that in a year when the DPA didn’t have any recommendation(s), that the DPA should at least
submit a letter to the legislators stating such.

There was a motion and a second to adopt Recommendation #3. Vote – Yes (8). Motion
passed.

                                                 5
Representative Maier asked whether the DPA only advises the Governor on energy issues.

Mr. Padmore replied that in the past the DPA has reported directly to the Cabinet Secretary to
which the DPA was assigned. Any recommendations or proposed legislation that the DPA
wanted to sponsor was pushed forward by the Secretary.

Recommendation #4. Amend the statute to have the DPA become directly involved in
municipal rate issues.
Senator Sokola asked Mr. Padmore to comment on this recommendation.

Mr. Padmore said that he didn’t understand the ramifications, it is one sentence and he
doesn’t have much of a clue how municipal utility rates are devised.

Representative Valihura said, “I think that is the point – is there anyone looking over the
shoulders of these municipalities to insure that the public is protected. I think that is what we
heard when we went through this the first time, that maybe there is a role to play. I guess what
we are charged with is looking to see if that is a good public policy or not, and I would think that
if you don't know you probably should know whether or not there is a role for you to play there.
And I guess from your comment, it says to me that you are not in a position to know whether you
can or you can't play a role there.”

John Citrola stated, “I'm the Deputy Director with the Division of Public Advocate, and thanks
for having us back again, and giving us an opportunity to respond to the recommendations. You
are absolutely right. I think we may have discussed this before. There is a bit of a gap with
municipals. And you've probably heard of it, depending on your district lies. The predominant
calls we get from municipals and having attended some of the city meetings, council meetings,
are those customers who are outside the city limits but take utility services from the municipality.
Those customers generally feel that they are under represented. We cannot step in for the PSC
because the municipal – as you are aware, they don't have a council or person who represents
them. The issue of not knowing how they make rates is more that they just set rates. And there
are no rate cases in the municipals for us to come in and provide the cost of capital, testimony or
anything like that. So the challenge that we see is that we certainly - and at times we do,
depending on the situation, we will take the call from the customer and try to get them in touch
with – unfortunately, they end up in your office, or outside the city limits and of course there is
really nothing based on legislation that can be done. We do try to get them in touch at least with
the right person that may be able to help them.”

Representative Valihura said, “One of the things the Energy Committee learned last year was
that doing anything with the municipals creates a lot of friction. And one of the things they
jealously guard is their ability to set those rates at basically any rate they want, and what they do
and they will vehemently deny this, but it is absolutely crystal clear that it is true, is that they
underwrite their general obligations of the town by expanding the cost of their electricity. So, in
other words, some of your phone calls are very absolutely correct that this is an outrage because
I'm paying for this, and what they are doing is paying for the services in that town - subsidizing
those services. When you are weighing it all, it is all the same. If you live in a town, does it
matter whether you are paying through the utility bill or whether you are paying through your
property taxes, and I've argued that yes, that does make a difference, because under my property
taxes I get a tax write off – you know, if I meet the threshold for that government write off, but
my utility bill, I can't write that off, and so you are getting not quite the benefit one way or the
other. But it is much worse for someone living outside the town. I'm not sure what role you
could play, but maybe you ought to play one, and I think this was intended to raise the level of
                                                     6
discussion among this group and your office to decide whether that is something that we ought to
consider. I guess I find myself if you haven't looked at this not being able to say one way or the
other whether we should do that, then maybe that is something we ask you to come back [to
discuss].”

Senator Sokola asked about utility consumers in other states.

Mr. Citrola replied that he has started looking at other states to see what they do. With about a
14 state study done so far, about a third do represent municipal customers in some capacity. Mr.
Citrola is a voting member of PJM which sets the wholesale price and basically governs what
customers pay the supply portion of their electric bill. Municipalities are represented by a trade
organization of a consortium of the municipalities, but the customers really don't have an end
user representation. They do indirectly because in one sense if you are arguing for an end user
customer for an investor on utility, there are some similar issues but that is another aspect where
a gap probably exists for those customers as well.

Representative Viola asked if an individual is living outside of a town, does that individual have
to buy services within that town.

Mr. Citrola said, “It can go utility by utility and it is almost case by case. The most recent
example that you are seeing I think you refer to a case before the PSC, the town of Milton is in
dispute with a private wastewater purveyor. The customers are outside the city limits. The town
of Milton does have facilities out there. And we struggled internally with this – do we step in
and argue a side of the case that the people would get representation if they went with the private
waste water utility because they are regulated by the Public Service Commission. But in that
case, maybe the customer has at some point an opportunity to take a self contained septic system
versus a public facilities then it becomes an issue with DNREC and you are aware that there are
arguments against less and less septics, more and more public water from an environmental
standpoint. … Camden Wyoming has some customers outside that take water from the city, so it
differs by municipality, by exactly what services that the city provides and what services it
provides outside, but very rarely for that particular utility service, there is only one choice.”

Representative Viola asked, if an individual live outside the town limits does that individual have
to buy electric through the town rather than just buying it direct from Delmarva.

Mr. Citrola replied that that situation does exist. Electric is more limited than water and waste
water.

Representative Viola asked why Delmarva wouldn’t just sell the individual electric – why would
the individual have to go through the town, when they are not in the town limits.

Mr. Padmore replied that it is a technical issue, because if an individual is living outside of town
where Delmarva doesn't have a distribution system, and is selling only the high voltage passing
by that house, to hook the individual up or to set up a system to hook up, it might be a bit costly.
The nearest distribution system to that home might be the town itself.

Mr. Citrola said, “There are some logistics arguments with the facilities and where they are, but
also there are some economics. Just sitting down with the city of Wilmington when I first got
here, we had this issue. They would claim that they need those extra customers. Given the
economy, building the system, they need those customers that are on the fringe or otherwise they
are going to have issues with getting enough revenue to cover their facility charges.”
                                                7
Senator Sokola said, “That point almost begs that the customers need an advocate, and that is
really one of the reasons why that issue is here before us. Right now, they don't, necessarily.
They call you and you give advice, but you may not have the jurisdictional ability to do
something about it that we ought to give you.”

Senator Bunting said, “Senate Bill #52 will be on the Senate floor tomorrow which will address
water and waste water, which may go to the questions that Representative Viola has. I believe it
will speak to some of the utilities – supporting this legislation as well.”

Representative Valihura said, “Let me just also add, remember even though they are represented,
we've got the same kind of situation where the PSC is setting the rates but we've got a Public
Advocate watching the PSC doing it and yes, you've got the town council or whoever is setting
the rates, but you need someone overseeing him like he's overseeing the PSC and the answer
probably should be yes. And you are telling us already that many states have that system in
place.”

There was a motion and a second to adopt Recommendation #4. Vote – Yes (8). Motion
passed.

Senator Sokola stated that if the JSC moves forward with this recommendation, there is going to
be a budgetary implication because there will be more duties and more responsibility, so there
may be a timeframe in implementing this recommendation.

Recommendation #5. The DPA is directed to be more proactive, and as such provide more
public outreach such as providing information about the Division by having speakers at
civic association, citizen group, and Rotary meetings, and also by including information
about the existence and role of the Public Advocate in utility bills and civic association
newsletters.
Senator Sokola asked Mr. Padmore to comment on Recommendation B5.

Mr. Padmore replied that he loves it, provided of course, that the Committee will arrange for
additional staffing and funding to accommodate it.

Mr. Citrola stated that they have been out speaking as much as the can, but it turns into a big
state when you are trying to be in Bethany Beach one night and North Wilmington the next night
or during the day. If they received additional staff it would certainly make it easier.

There was a motion and a second to adopt Recommendation B5. Vote – Yes (6). Motion
passed. (Senator Bunting and Rep. Maier not present for vote)

Representative Valihura thanked the DPA for its participation, and for making sure that the JSC
staff got the information the Committee needed. He stated that there will another meeting to talk
about the recommendations and issues that were left on the table.

D. Public Service Commission
A. Discuss Draft 2 Recommendations
Senator Sokola welcomed representatives from the PSC. He pointed out that a letter was just
circulated to the JSC members and there are people from Milton in attendance at this meeting.
The Senator stated that the Committee had not planned on hearing public comment at today’s
                                               8
meeting, however the letter will become part of the Committee’s record, and if there are further
thoughts or issues that anyone would like to share with the Committee, please do so in writing.
The Committee has had its public hearing that included comments from the public previous to
this, but the record will be considered to be open until all the JSC recommendations are final.
The Committee encourages that level of participation.

Recommendation A1: Amend the statute to update the provisions in the “1974 Act” related
to cable system franchising for the unincorporated areas of the State.
Senator Sokola asked the PSC to comment on Recommendation A1.

Mr. Burcat said that one of the concerns that the PSC has had over the years is that the
Commission has been acting under the Cable Act that was passed in 1974, even though the
technology and landscape has changed quite a bit since 1974. Mr. Buracat stated that the PSC is
essentially recommending an update to the cable law. The federal government has gotten
involved dramatically in this area and they have preempted the states in many different ways.
The PSC raised this issue because it believes there needs to be some change to that law. There
are different platforms available now that weren't available back in 1974 such as satellite
provisions of television services and high fiber provisions of television services.

Representative Valihura said, “Numbers 1, 7, 8 and 9 are all what I would refer to as policy
changes of a type and magnitude that I've been uncomfortable with doing in a committee
situation. I believe that the role of the Joint Finance Committee, the Bond Bill Committee, and
this Committee is to do what we are intended to do in a very limited fashion - which is to make
sure that these organizations, boards, commissions are doing what they are intended to do. I
have a very limited view of our role in trying to set or enforce policy issues. I believe policy
issues for all those 3 committees should be decided upstairs in both Chambers, and that those
folks ought to be the ones that makes those decisions. One of the things that I am offended by is
when a policy issue is put into the epilogue language in one of the bills that surprises us and
there is nothing I can do about it. I can vote yes or no. A no vote is tantamount to being a
wasted vote, frankly. And as much as I believe that there is some need to address this, and 7, 8
and 9, … it would be my recommendation that we would do nothing more for these 4 then to
suggest to the extent that the Public Service Commission has some concerns on this that they
bring forward legislation themselves to the General Assembly for their consideration.”

Senator Sokola said, “I don't disagree with you, but there has been less reluctance by the
legislature as a whole to amend Sunset Committee recommendations than either the Bond Bill or
Joint Finance Committee recommendations, so there is an option. The reality is that we do have
a good healthy debate about it {JSC recommendations] in the Senate, and I'm sure you do also
in the House. .. Sometimes recommendations of the Sunset Committee get overturned upstairs.
It doesn't generally happen much with respect to either the Budget bill or the Bond bill. I hear
what you are saying and I don't necessarily disagree with you. In fact, we have had bills
introduced related to some of these issues separate from the Sunset Committee. “

Senator Bunting said, “Representative Hocker and I, for a number of years have been trying to
work with the local cable provider to get something called a skinny rate for the constituents that
we serve who really just want to be able to watch the local channels and a few other things. We
have kind of been told to “pack sand,” literally, and it is frustrating. I know on the federal level
they are trying to deal with a la cart rates. They pretty well dictate to you what channels they are
going to carry – etc., etc. .. other states have these skinny rates where they just pay a very basic
rate which is economical, but they absolutely will not do it.”

                                                 9
Mr. Burcat said he has been working with Senator Bunting and Representative Hocker over the
years on this issue. It is a dilemma because most of the state does have a skinny basic rate. It is
primarily the Media Com area that does not have a skinny basic rate. Unfortunately, if they are
offering what is supposed to be a skinny basic rate, or package, they can offer other channels as
well in that package, so they just decided to offer the skinny basic and expanded basic in a single
package and this is permitted by federal law. It is up to the cable company, as long as they have
the skinny basic channels in some package, then the PSC can't enforce it on a state level to break
it up into 2 packages, and that is the way they've historically had their package. The PSC has
had meetings with the company in question and has basically been told that they are not going to
change this and they correctly contend that they have the federal law on their side. The PSC
would like to see a change for that particular situation, because there is a big difference in the
cost. The PSC has also received many complaints about this although the Commission’s hands
are tied as to what it can do. Mr. Burcat is not sure if a change in state law is going to have any
impact because of the federal preemption issue.

Representative Valihura asked, “Can we tax them? Can we limit the area in which they provide
their service? Can we do something that would ultimately force them into talking with us?”

Mr. Myers replied that you cannot do indirectly what you cannot do directly.

Representative Valihura said, “I guess it is rhetorical in a sense, but I mean, these kinds of
problems like the yard waste problem up north which we will resolve require a little bit of
thinking out of the box and requires a little strong arm tactic and maybe requires a little bit of
everything there to get them to come around. I'm happy to give you some thoughts, Senator, and
talk with Gerald [Hocker] to see what we can come up with.”

Senator Bunting thanked Representative Valihura for his offer of assistance.

There was a motion to amend Recommendation #1 to read: “The Joint Sunset committee
recommends that the Public Service Commission propose legislation relating to these 4
things [Recommendations # 1, 7, 8, 9] for the General Assembly to consider.” The motion
was seconded. Vote – Yes (7). The motion passed

Recommendation #2: Amend the statute to add provisions that direct how the Commission
should assign (certificate) new or expanded service territories to water and sewer utilities
that are problematic in application.
Senator Sokola asked Mr. Burcat if he cared to comment on this recommendation.

Mr. Burcat said SB52, sponsored by Senator Bunting, was recommended specifically by the
Public Service Commission. SB 52 addresses a number issues that are of concern to the
Commission. One of the main concerns is the fact that there are individual property owners or
land owners who were being sent petitions to sign up for water service in accordance with the
law. This is called an inclusion if under certain circumstances under the current law, if there are
a majority of landowners in a certain area that sign up and you haven't opted out then you are
included and you are going to be in that service territory. One of the sections of SB 52 deals
directly with that issue, at least for undeveloped properties and areas, or other than formalized
subdivisions and developments. Mr. Burcat said that since SB 52 addresses this issue, he is not
sure how relevant this recommendation is.

Senator Sokola said the JSC could still take a position on this issue, pending the outcome of
SB52, although it may not be necessary to include it in the JSC legislative package.
                                                10
Senator Bunting stated that he is working on a companion bill to SB 52 to address waste water
issues.

Representative Maier asked whether the PSC meetings and rule making meetings are open to the
public.

Mr. Burcat replied that they are. As far as rule making is concerned, the Commission not only
issued an Order [regarding the Milton waste water issue] in public but the Commission has also
set up public workshops.

Mr. Burcat stated that legal notices are placed in the legal section of the newspaper, and in
conjunction with this the PSC sends a press release to all the major news outlets.

Chairperson McRae said the PSC has also reached out to community groups, particularly on the
energy issues.

Senator Sokola suggested deferring further discussion regarding Recommendation #2 pending
the outcome of SB #52.

Recommendation #3. Amend the statute to delete the outdated Commissioner salary
language.
There was a motion and a second to adopt Recommendation #3. Vote – Yes (8). Motion passed.

Mr. Burcat said the PSC has no objection and would even help draft legislation, if so desired.

*Recommendation #4. Amend the statute to provide that the Chair of the PSC is a full-
time position.

There was a motion and a second to adopt Recommendation #4. Vote – Yes (8). Motion passed.

Recommendation #5. Amend the statute to clarify the distinct role of the Executive
Director and the role of the newly created full-time Chair position.
There was a motion and a second to adopt Recommendation #5. Vote – Yes (8). Motion passed.

**Recommendation #6. Amend the statute to provide that one of the 10 Commissioners be
appointed to serve as Vice-Chair; the Commissioner would remain part-time; define the
role of the Vice-Chair; no salary increase.
Representative Valihura stated that the recommendation should be amended to read “…of the 5
Commissioners …” not 10.

Chairperson McRae stated that the proposed position will include additional work and extra
administrative tasks, as well as supporting the Chair in conflict situations. Chairperson McRae
urged the JSC to consider an additional $5,000 for the vice chair position.

Representative Maier asked about the current salary the Commissioners receive.

Ms. McRae replied that Commissioners receive $30,000 a year and the Chair receives $35,000.



                                                11
Representative Valihura moved that Recommendation #6 be amended to read: “… 5
Commissioners” and after define the role of the vice chair, insert “, and recommend an increase
in salary commensurate with the increased role.”

Representative Valihura moved that Recommendation #4 be amended as follows: delete the
period at the end of the Recommendation and insert “, and recommend an increase in salary
commensurate with the increased role.”

There was a motion and a second to adopt Recommendation #4 as amended.
*Recommendation #4. “Amend the statute to provide that the Chair of the PSC is a full-
time position, and recommend an increase in salary commensurate with the increased
role.” Vote – Yes (8). Motion passed.

Senator Sokola asked where the PSC expects to get the additional funding for the increased
salaries

Mr. Burcat replied that there is additional funding within the millage that could cover these costs
if it was approved.

There was discussion about the Chairperson’s term of office and meeting times.

Senator Sokola asked whether Mr. Burcat stated that there are sufficient resources to cover the
additional Public Advocate positions that the JSC is considering.

Mr. Burcat replied, “…That was a different question because that was putting the Public
Advocate in the office of the Attorney General, who is going to have a different way of dealing
with his department. …If they add an additional 4 or 5 employees that might put us way over the
costs that we could incur. If you combine the 2 agencies that is a problem for the Public Service
Commission, because you have another agency that might end up dictating what we can do with
our budget.”

Senator Sokola asked whether there are sufficient resources for some additional positions,
without any further increase in millage.

Mr. Burcat replied, “I think that is the case in the short to medium term, but ..we would have
never expected some of the work that we are doing today 5 years ago, and how expensive it can
be. So to say today that in 4 or 5 years, or 6 years, we wouldn't necessarily need additional
funds ourselves, or significantly more funds, and if the Public Advocate was in the same
position, there is a possibility at that point that we would have an issue. I would think it would
be better if we were in 2 different organizations or departments to separate out - they would
have a separate millage with the utilities – is one way to deal with it. … Or if they are part of the
AG’s office, be funded in the same way that the AG is being funded…”

Rep. Hudson asked about how many staff vacancies exist.

Mr. Burcat replied there are currently 2 vacant staff positions.

There was a motion and a second to adopt Recommendation #6 as amended.
**Recommendation #6. Amend the statute to provide that one of the 10 Commissioners be
appointed to serve as Vice-Chair; the Commissioner would remain part-time; define the

                                                 12
role of the Vice-Chair, and recommend an increase in salary commensurate with the
increased role.” Vote – Yes (8). Motion passed.

Recommendation #7. Amend the statute to specifically reference the “prudence standard”
with regard to the formula/standard to increase the PSC’s ability to exclude costs
unreasonable incurred.
Recommendation #8. Amend the statute (26 Del.C. §302) to allow the imputation of
revenues for expected new customers.
Recommendation #9. Amend the statute (26 Del.C. §302) to allow a disallowance for
facilities that are not used and useful, a fundamental utility regulatory principle.
With regard to recommendations #7,8 and 9: There was a motion, “The Joint Sunset Committee
recommends that the Public Service Commission propose legislation relating to these 4 things
[Recommendations # 1, 7, 8, 9] for the General Assembly to consider.” The motion was
seconded. Vote – Yes (7). Motion passed

***Recommendation #10. The Executive Director of the PSC is directed to continue to act
as an advocate and shall provide advice and recommendations to the members of the
General Assembly with regard to energy issues.
Senator Sokola asked if there were any comments regarding this recommendation.

Mr. Burcat replied that the PSC does not have any issue with this recommendation, however it
would suggest that the phrase “energy issues, “ be amended to read “utility issues.”

There was a motion and a second to adopt Recommendation #10 as amended. ***
Recommendation #10. The Executive Director of the PSC is directed to continue to act as
an advocate and shall provide advice and recommendations to the members of the General
Assembly with regard to utility issues. Vote – Yes (8). Motion passed.

Recommendation #11. The PSC shall report back to the JSC regarding the results of the
Standard Market Variation study that is being conducted by OMB.
Mr. Burcat stated, “We certainly support that recommendation. The only question that came up
in our minds was whether it seems to be very supportive of the Commission needing to do
something about the salary levels of its employees. Its not one hundred percent clear that we
would be able to use that language to support us in trying to make sure that we do get some - not
that we are not getting good consideration but at least added as some more support for us with
regard to having a Standard Market Variation Study performed, and with the understanding that
it is a concern of the Joint Sunset Committee as well.”

Sen. Sokola asked when the PSC expected that that study would be completed.

Mr. Burcat replied that he is not sure. It has already been about 2-3 months and the PSC has not
had any response, at least at the agency level.

Chairperson McRae stated she just received a letter from the new Chairman of the Maryland
Commission seeking information on the Delaware salary structure. Maryland is having the same
problems that Delaware continuously faces - they are completely unable to fill a number of
positions. Chairperson McRae said it was interesting that they were asking for Delaware’s
support considering that they pay better than Delaware does. Salaries are a problem in the Mid
Atlantic Region, and it may also be a national problem.


                                               13
Representative Maier asked whether an efficiency study has been done – such as looking at the
feasibility of combining 2 positions into one and have a higher salary for that one position.

Mr. Burcat said it would be tough to do something like that – currently people consistently work
more than the prescribed 37 and a half hour work week. Delaware has one of the smallest staffs
in the country and the PSC is doing some things in which some commissions (of similar size or
larger) around the country aren’t even involved.

Senator Sokola said, “There are certainly salary issues in a lot of positions throughout state
government and I think most of the legislators who I've talked with and certainly most of my
constituents want people to be fairly compensated but they also want to see results. And to the
extent that we approve of recommendations that give more compensation, go to a full time
position, add more duties to vice chair - these things come back. There is going to be another
review of the Public Service Commission sometime in the future and we are going to want to say
that the recommendations that we did last time were appropriate and that we are having the kind
of results that - this is a PUBLIC Service Commission – it is to benefit the public. That is where
I come from. I want you to be able to hire high quality people and compensate them fairly, but I
want to be able to go back and say because we have these people doing a nice job, that we are all
getting this benefit.”

Mr. Burcat said the problem is that the PSC has a very small staff, not highly compensated, not
compensated in anything close to what the utilities company compensate people in similar
positions, not compensated equally among the Mid Atlantic states. The PSC has a very uphill
battle sometimes when it go into cases and doesn’t have the resources and sometimes not the
right people in the right positions. Often, the PSC hires a consultant, but that is not the optimum
way of handling it. They are not familiar with Delaware issues, they are not familiar with
policies of this Commission and, because they are doing consulting work in 10 other states, they
may have to be careful in how they say things when they come into Delaware so they don't lose
business in their other states. It is an extremely complicated business and the PSC needs to
attract the right talent to come in and in the long run, it is a tremendous benefit for the citizens of
the state of Delaware to have that.

Mr. Burcat said that he hopes that if the Commission was asked if there was any support for this
position [increasing the salaries] from somewhere other than your department, the PSC would be
able to at least say that “the Joint Sunset Committee has voiced it's support to the Public Service
Commission for these increases.”

There was a motion to amend Recommendation #11 to read: “The Chair and Vice Chair of
the JSC could send a letter in support of the results of the Standard Market Variation
study that is being conducted by OMB, after they have read it and are happy with it.” The
motion was seconded. Vote – 8 – yes. The motion passed.

****Recommendation #12. The PSC is directed to establish an In-House Attorney
position, contingent upon securing funding. AND
Recommendation #13. The PSC is directed to work with the Office of the Attorney
General to secure funding for an additional full-time Deputy Attorney General to be
assigned to the PSC.

Mr. Burcat stated that the major concern is getting a second person in the office as a resource
issue, partly to help reduce some of the outside legal costs and also so that if the current DAG

                                                  14
were to leave, it is quite possible that there isn't anybody currently in the AG’s office with
appropriate experience that could step right in and fill that DAG's shoes.

Senator Sokola asked how many of the Commissioners are attorneys.

Mr. Burcat said three Commissioners are attorneys but it would be a direct conflict if the
Commissioners were already signaling where they were on an issue before the Commission met
in its entirety.

Chairperson McRae said she shares Mr. Burcat’s view, because the Commissioners are supposed
to remain impartial until it is time to decide. To the extent that Commissioners as attorneys
would give interpretations of the law, or advise to the staff, those Commissioners would have
more of an influential on the staff's function then was allowed.

Representative Valihura asked whether the PSC preferred Recommendation #12 establishing an
in house attorney position, or Recommendation #13 that would add another full time DAG.

Mr. Burcat replied, “Well, if you go back to #12, which is the in house, first of all, we have a
concern because it looks like it is only one position. So if we were to do #12, that is a resource
issue. Again, we would rather 2 [attorneys] instead of one. So if that were amended to 2, #12
would be our preference. One, because we do think there is a benefit to having the Public
Service Commission's attorney's independent from the AG’s Office, and especially if you were
to move the Public Advocate into that Office. That is another reason to raise that issue, so again,
we see it primarily as a resource issue, but we are concerned about the independence issue as
well.”

Senator Sokola asked whether the PSC’s would recommend something different from #12 or
#13.

Mr. Burcat replied, “It's [Recommendation] #12, with 2 in house attorneys, or we could live with
[Recommendation]#13, but we'd prefer [Recommendation]12.”

Rep. Hudson asked, “Does the agency demand 2 full time attorney's in balance to other
agencies? This seems extreme to me. I feel like all we are doing is dealing with our personnel
issues instead of the way they function as an organization. …We are getting on overkill here
discussing all their personnel needs. Other agencies use the AG’s Office for advice if needed
and if outside counsel is needed, hire someone full time.”

Considering the costs spent on hiring outside attorneys over the past few years, Senator Sokola
asked if that could be equated with full time positions – what would the equivalent number of
full time employees be 1, 1 ½. 2, 3, etc.

Mr. Burcat replied, “It is an average of $305,000 to $325,000 a year. Some years, … when we
are dealing with some really big issues, it could be significantly higher than that….I have to
emphasize that we are a lot different from other agencies. We have a legal process, basically an
administrative law process, that all of our cases, you have to be an attorney to represent staff
through a process here at the Public Service Commission and all our cases run through a process
so we've got people representing at least the contested cases, we have to have representation.”

Senator Sokola said that he was given a dollar figure, but not a number of attorneys. He realizes
there is a BIG difference between what a low paid attorney gets and what a high paid attorney
                                                15
gets, and if the PSC is hiring high level technical legal expertise, that might be just half of an
attorney. The Senator asked how many full time staff attorneys can $305,000 buy?

Mr. Burcat replied, “I'm not sure it is full time equivalents, but as far as the actual - what we
would be paying a second attorney, we have an attorney at the highest level right now who is
making… a significant salary at the Commission. We don't control that, by the way, but we do
pay it…. The second attorney would be a lower paid position, I would assume. It would be
somewhere, anywhere from $60,000 to $75,000 a year. Whereas the higher paid attorney the
one that is here, would probably be somewhere well into the $90,000's, close to $100,000 range.”

Mr. Burcat said, “…If we hired a junior attorney inside, we would feel confident that we would
significantly reduce that legal cost because we could utilize our senior attorney to do more of the
litigation type of work and it would significantly reduce our outside counsel costs…”.

Senator Sokola asked, “Do you feel if we went with recommendation 12 as amended, that we
would maybe even be reducing the cost to the public slightly, but still be at least as effective
because we have some counsel full time working just for us?”

Mr. Burcat replied, “Absolutely, and more effective because you'd have a second attorney that
we would have hired that would have learned the business and be ready to step into the shoes of
the senior counsel if that person ever left.”

Senator Sokola said, the motion is Recommendation #12 which would be 2 in-house attorneys,
with the understanding that hopefully this won't be an additional financial burden because of the
existing legal fees that they are required to support at this point.

Representative Valihura stated that the PSC is asking for two things: First, adding another
attorney, and second, taking him and moving him in house, or creating something. The JSC
would be recommending a new policy decision.

Mr. Geisenberger, Assistant Secretary of State said, “…I think as you are considering this
recommendation and certainly I strongly agree with Bruce [Mr. Burcat] and Arnetta
[Chairperson McRae] about the amount of work. I know they have done a tremendous amount
of work over the last 15 years to frankly reduce the amount of … outside counsel …by having
dedicated counsel from the public – from the Attorney Generals Office or from in house counsel
can help in that regard in a big way. One thing I think the Committee should give some thought
to, and something I've asked Bruce to do, is I think we really need to meet with the AG’s office.
I frankly have a concern. All of the Dept. of State agencies have relied upon the AG’s Office for
their legal services, and in the case of this particular deputy AG, he is assigned full time to the
Commission, and I think it would be great to have another deputy AG assigned full time to the
Commission, but I also think it can be helpful to have a deputy AG serving in that role. In
particular, I’M thinking of FOIA issues. I personally like the idea of a deputy AG reviewing all
of the FOIA matters that come before the commission, because it doesn't get us into a situation.
There is the potential situation if you have in house counsel where you could have the AGl
disputing a decision made by the in house counsel of the Commission. And that is just
something for the Committee to think about. Have in house counsel to the Commission, you
could have a position where the Attorney General disagrees with something the in house counsel
did and now you have a dispute between the AG and the Commission. That would certainly be a
different dynamic then what happens in any other agency in the Dept. of State, and one I think
should be thought about by this Committee with respect to thinking about 12 and 13. As I said, I

                                                  16
strongly agree that there is a need for an additional full time attorney working for the
Commission. My preference that it be another Deputy Attorney General full time assigned.”

Ms. McRae said, “As you can see, we have not had a family discussion.”

Mr. Geisenberger said that the same way that this Committee is going to talk with the AG’s
office about the Public Advocate’s office, perhaps it would be helpful to also meet with the AGs
office in framing this recommendation too.

Ms. McRae said, “I don't want to belabor this but there is an important consideration. Rick did
lay out some things to consider on the AG’s side, on the other side in the very docket we are
dealing with, there was some very sensitive pricing information and I think it is important to look
at not who is in the seat right now but what the seat is capable of doing. So that it may be for
various reasons the Commission may determine that FOIA request is appropriate withholding
information. And an AG may well have the view that the public's right to know surpasses
everything. In such a circumstance, there really isn't a whole lot of latitude for discussion if it
resides in that forum. And so it may be that we need to talk as a family as has been suggested
that there are very compelling arguments to keep independence as well.”

Rep. Valihura said, “I've had a long standing concern about the AG’s Office and the conflicts in
which they are in, in particular when you are representing another branch of government. I truly
believe that we need to carve off the civil function from the Attorney Generals office and provide
legal services through an office of the legal counsel of the Governor. I've said that – I don’t care
which governor it is – it doesn't matter to me. It ought to be in house because you need to have
that. The attorney general ought to be representing THE STATE, as A STATE, not as these
various different agencies. And we are right in the middle of that now – this issue, that is what
we are putting in front of us. I don't particularly find the FOIA issue problematic. DSHA has an
outside counsel. They don't have an AG assigned to them. And I know he takes different views
than the Attorney Generals office, so its going to happen, and indeed the AGs take some
different views then I think it's Mike who is the guy who makes the decision at the end of the day
anyway. They are making judgment calls, and then Mike can overrule them, so I think FOIA is
not necessarily a roadblock to this. I think having it in house, you guys have a specialized need,
and I think you – we ought to be recognizing that specialized need very much like DSHA has a
specialized need, so I favor 12 as amended. “

Senator Sokola stated that he is inclined to support Recommendation #12 also.

Senator Sokola said that the reality is even though the JSC makes a recommendation, that doesn't
put it in the Code and the record will still be open. The Committee will be more than happy to
field further information.

Representative Valihura clarified the motion for Recommendation #12: “The PSC is directed
to establish 2 in house attorney positions contingent upon securing funding.”****

Representative Maier asked if the PSC will need funding for the new positions.

Mr. Burcat replied, “…We would certainly develop a budget that would reduce our outside
counsel and expense. We obviously wouldn't have the need to use outside counsel if we can
count on having 2 in house, so we would definitely reduce our budget.”


                                                17
Sen. Sokola asked, “But you would still reserve the right in the future if you need it for some
special purpose to retain someone with specific legal expertise, but it would be understood that it
would be much less then you currently spend …?”

Mr. Burcat said the PSC employs 2 outside firms, and in the past have had 3 firms for various
needs. “It would certainly cut back on even the number of firms that we would be using in that
situation.”

The motion to adopt Recommendation #12 as amended was seconded. Vote – 8 – yes. The
motion passed.

(No action was taken on Recommendation #13.)

Recommendation #14.The PSC shall provide the JSC with appropriate and timely updates
with regard to any requirement(s) imposed by the U.S. Department of Transportation
Office of Pipeline Safety concerning the PSC assuming the responsibility for intrastate
enforcement of the pipeline safety code or the local distribution operators.
Chairperson McRae said that the Federal Office of Pipeline Safety has really been on the
Commission’s back about the fact that Delaware is the only state that has not taken responsibility
for enforcement of a pipeline safety code. Currently the PSC has a resource person satisfying the
requirement, but the feds want to make it official and put it in Delaware’s hands to enforce.
Delaware has held off complying because we don't have the resources.

Rep. Valihura asked whether in house counsel would take care of the federal requirement.

Mr. Burcat replied, “No, basically what we do now – we have 2 people now who do the work
and they actually go out and investigate pipelines and if there is an accident they send a report to
the Office of Pipeline Safety who then enforces – there is an enforcement action – they actually
enforce it. On these inspections and these violations, there is a different situation when the AG
gets involved. … It would help to some degree to have inside counsel …”

Mr. Burcat said the feds want Delaware have a state law for enforcement, because right now
state law does not permit the Public Service Commission to enforce these things, but the PSC
could actually have a proceeding and impose a penalty if necessary, or some other corrective
order.

A motion was made and seconded to amend Recommendation #14 to read: The PSC will
provide the JSC with the necessary enabling legislation to comply with the federal
mandate. Vote – 8 – yes. The motion passed.

Recommendation #15. As a member of the Consumer Energy Education Group encourage
the group to provide more outreach to civic groups and associations.
A motion was made and seconded to amend Recommendation #15 to read: As a member of the
Consumer Energy Education Group the PSC should encourage the group to provide more
outreach to civic groups and associations. Vote – 8 – yes. The motion passed.

Recommendation #16. The Joint Sunset Committee requests that the Joint Finance
Committee provide additional funding to provide more training opportunities for PSC staff
to ensure that employees continue to have the appropriate understanding and proficiency
in their areas of expertise.
Senator Sokola asked whether funding for training opportunities come from that millage.
                                              18
Mr. Burcat replied, “It does come through millage. …I think we need to request this as a
recommendation but we pointed it out as an issue in our response….We do have sufficient
funding – it is just a question of getting approval through the Joint Finance Committee – getting
approval for the additional ability to expand the dollars to provide the training.”

Representative Hudson asked how much the PSC currently spends on training.

Mr. Burcat said the PSC currently spends about $50,000 for training.

Representative Hudson asked how much more the PSC is looking to spend.

Mr. Burcat replied that this has been discussed and they are talking about an additional $20,000.

Rep. Hudson asked on what that funding would be spent.

Mr. Burcat replied that it would not be for higher education, but rather to send staff to technical
conferences.

Rep. Maier stated that she hopes the PSC will cross train those folks that are about to retire – as
there is a need for that institutional knowledge.

The motion to adopt Recommendation #15 was seconded. Vote – 8 – yes. The motion
passed.

E. Any Other Business
Senator Sokola said, “Just one or two other brief comments - we discussed a couple of times the
issue of wireless and some of those things. I'm having a bill drafted that would prohibit wireless
providers from passing along third party costs, unless there was a separate form reviewed by the
Public Service Commission and approved by the Public Advocate. … We will circulate that and
I would like to hear your comments. If you think it is completely out of line with what you
should be doing, let me know, but there is clearly a sentiment from the public that we need to do
something more, and that is clearly outside the bounds of the wireless jurisdiction that the feds
are granting because it is not wireless communication, it is entertainment that they are selling and
they are selling frequently.”

Senator Sokola continued, “The second thing, I'm sure that other members of the Committee, as
well others who are not on the Committee have been getting an awful lot of calls from people
about excess gas charges. My understanding is that Delmarva Power is not allowed to make a
profit on the gas end, but there are people who are suggesting that there is some sort of
incestuous relationship between Delmarva Power and whoever they are buying gas from,
because these late season winter bills are just through the roof. I've got to believe you guys are
getting calls on that as well. Can you comment briefly on the gas issue?”

Mr. Burcat replied, “We do get calls about gas. As you recall, gas was priced a lot lower several
years ago with – over the past 2 or 3 years, natural gas prices have sky rocketed. They have
come down a little bit this year and we've seen some drops and we've passed through.”

Mr. Burcat said, “I think what you are hearing, because we've checked out a lot of bills – we've
gotten a lot of complaints –is that we've had a lot colder February and March then we had last
year in January … So what happened with these folks, when we checked their bills is they …are
                                                 19
using a lot more energy because it is a lot colder outside. So what we've seen is, they are being
charged the right amount – they are not getting passed through inappropriate costs, at least
looking at those specific bills that we've received, they are just using a lot more for obvious
reasons.

Senator Sokola asked whether the DPA has also been getting similar calls.

Mr. Citrola said, “In regards to natural gas, I think the issue you are talking about, the gas cost
rate, and many consumers seem to think they are not getting the benefit of when the gas market
dips, although we pay when it goes up because there is a specific line item for the cost of gas that
they purchase. Unfortunately, it is a band that governs that so even if the price of natural gas
dips, if it doesn't dip far enough, the company is not required to come in to have that rate
changed. Now recently, this year, you had a combination of both – an adjustment to the base
rate which was somewhat offset by a decrease in the gas costs rate and that in conjunction with –
I'm sorry, that was far outweighed by the colder season of February, March. We ran into the
same issue as you keep your thermostat at 68 and the average temperature for the particular
month is 4 or 5 degrees lower, in terms of percentage the average temperature of 40 is now 32 –
10% - your bill with the same usage would go up a minimum of 10% plus a couple of
percentages for the increased rate. Yes, the bills are higher but there is nothing illicit going on,
on the wholesale side.”

Senator Sokola stated that if anything else comes up to the let the JSC know.

F. Adjournment
The meeting was adjourned at 2:25.


April 26, 2007/dap




                                                20

				
DOCUMENT INFO