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Is Public Service Commission secretly approving rate hikes?

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Rick Brundrett

From May 2005 through Oct. 30, 2013, the S.C. Public Service Commission (PSC) raised the average electric bill for SCE&G residential customers 21 times.

From October 2005 through Jan. 1, the average bill for Duke Energy Carolinas residential customers using the same amount of electricity (1,000 kilowatt hours per month) was raised 14 times, The Nerve found in a review of rates published by the state Office of Regulatory Staff.

For the period, the increases in average monthly bills for each of the two large utilities totaled more than 20 percent above inflation.

The PSC is a seven-member panel elected by the General Assembly and screened by a legislatively controlled committee. It regulates investor-owned utilities, including the setting of utility rates for residential and business customers.

Although the final decisions of the PSC are made public, the commission apparently meets secretly beforehand in smaller groups when deciding rate cases, based on little-known testimony last year from Commission Chairman G. O’Neal Hamilton, The Nerve’s review found.

Hamilton testified during his screening hearing for re-election that the PSC typically meets in smaller groups to reach a “consensus” before final rulings are issued by the full seven-member body, suggesting that it wasn’t a violation of the state Freedom of Information Act (FOIA) if three commissioners met at a time before a final decision was made.

The law, however, doesn’t allow smaller-group meetings without public notice or for decisions on rate cases to be made behind closed doors, according to Jay Bender, attorney for the S.C. Press Association. The Nerve, through its parent organization, the S.C. Policy Council, is an associate member of the Press Association.

“The way they’re doing it appears to be illegal,” Bender said, when contacted recently by The Nerve. “Each of those smaller groups seems to be a committee, and a notice (of public meetings) has to be given, and discussion would have to be done in public.”

Secret meetings

generally banned

The FOIA  defines a “public body” as not only the governing body of a state or local agency, but also “committees, subcommittees, advisory committees and the like of any such body by whatever name known.”

A governing body must vote publicly to go into a closed session, and the presiding officer must announce the specific reason for meeting secretly, under the FOIA.

The Nerve recently left written and phone messages seeking comment from Hamilton, who makes $104,286 as the commission chairman, but received no response. Hamilton, a retired Farm Bureau agency manager who served on the Bennettsville City Council from 1992-2004, joined the commission in 2004, was elected its chairman in 2006 and re-elected chairman last year, according to the PSC website.

“He’s not allowed to elaborate on his statements (given during last year’s screening hearing),” said Jocelyn Boyd, the PSC’s chief clerk and administrator, when contacted by The Nerve on March 28. “Of course, I don’t have a comment about his testimony.”

Boyd said PSC members, whose positions are considered quasi-judicial though commissioners, such as Hamilton, don’t have to be lawyers, as well as PSC staff, are bound by the state Code of Judicial Conduct – the ethical rule book for judges.

Boyd requested that The Nerve put additional questions in writing about the PSC’s process of deciding rate cases, though she didn’t respond by publication of this story. Those questions included whether the PSC has ever met privately with three or fewer commissioners since 2004 to decide rate cases.

Asked about Hamilton’s testimony last year, Dukes Scott, executive director of the Office of Regulatory Staff, which represents the public in rate cases before the PSC, said, “That’s probably something I wouldn’t get involved with,” adding, “I think the commission does a good job.”

Still, when questioned about his experience when he was a PSC member in 1990s, Scott, an attorney, replied: “If I were going to discuss something, the meetings were open. … The meetings were longer back then, but that’s how we did it.”

Scott said in many rate cases, the PSC approves a settlement agreement among the parties, which typically involves his office. In cases in which rates are increased, the final figures usually are lower than what the utilities initially requested, he said.

‘Unity in our rulings’

During a Feb. 12, 2013, screening hearing for re-election to his seat, Hamilton initially said, under questioning by an attorney for the screening committee, that three of the seven commissioners “can get together and discuss the issues,” according to a hearing transcript.

Hamilton noted that in typical utility rate cases, “we have six months from start to finish to issue an order,” adding, “And this I think is the fastest time scale in the nation.”

Later, under questioning by Rep. Bill Sandifer, R-Oconee and vice chairman of the 10-member screening committee known as the State Regulation of Public Utilities Review Committee, Hamilton said commission members “normally meet in small groups that would not violate” the state Freedom of Information Act.

“And we attempt to have unity in our rulings, and we have basically in most instances been able to do that,” Hamilton said. “And we discuss the matter. We all have our own opinion. We study the pros and cons of it, and we attempt to come up with a resolution that is best for all concerned.”

Under questioning by Sandifer, Hamilton said commissioners are “on duty 24 hours a day because we have the state phone and I-Pad that we constantly contact,” adding, “If anything comes up with the commission that they need you to be a part of, they need your attention on, we know immediately and we keep in contact.”

At the end of the Hamilton’s hearing, Rep. Mike Forrester, R-Spartanburg and a PURC member, raised concerns about Hamilton’s answers.

“Do you see that as actually just a better procedure than meeting in an open session where the public can see all seven of you and converse and come to a decision?” Forrester said.

Hamilton denied skirting the FOIA.

“We would be happy to meet in a group and with the public,” he said. “We don’t hide in transparency at all, but under the structure that we live (with) we haven’t seen that as an available way to do it.”

Rick Brundrett is a senior reporter for The Nerve.