1 1 2 3 PUBLIC SERVICE COMMISSION SCREENING 4 5 PUBLIC HEARINGS 6 7 8 Monday, February 11, 2013 9 10 9:27 a.m. 11 12 13 1101 Pendleton Street Gressette Building, Room 207 Columbia, South Carolina 14 15 16 REPORTED BY: LISA GARSON COURT REPORTER 17 18 ----------------------------------------------------- 19 20 21 22 23 24 25 CompuScripts, Inc. A Full-service Court-Reporting Agency Post Office Box 7172 Columbia, South Carolina 29202 803-988-0086 1-888-988-0086 www.compuscripts.com 2/11/2013 2 1 MEMBERS IN ATTENDANCE: 2 SENATOR C. BRADLEY HUTTO, CHAIRMAN 3 REPRESENTATIVE WILLIAM E. SANDIFER 4 REPRESENTATIVE P. MICHAEL FORRESTER 5 ERIK E. EBERSOLE 6 REPRESENTATIVE HARRY OTT, JR 7 JOHN SIMMONS, ESQUIRE 8 THOMAS C. ALEXANDER, ESQUIRE 9 LUKE A. RANKIN SR. ESQUIRE 10 COUNSEL: 11 ANDY FIFFICK 12 HEATHER ANDERSON 13 (INDEX AT REAR OF TRANSCRIPT) 14 15 16 17 18 19 20 21 22 23 24 25 www.compuscriptsinc.com 2/11/2013 3 1 * * * * * * * * * * * * 2 SENATOR HUTTO: This is the Public Service 3 Commission Hearing for Seat 1, Seat 3, Seat 5, and Seat 4 7. There are 15 candidates to be screened. 5 One of the duties of the Review Committee is to 6 screen candidates to determine whether they meet the 7 qualifications. 8 baccalaureate or more advanced degree, and, second, a 9 background of substantial duration in at least one of the Those qualifications are, first, a 10 following areas: 11 protection and advocacy, water and waste water, finance, 12 economics and statistics, accounting, engineering, or 13 law. 14 Energy, telecommunications, consumer The Review Committee is also required to 15 consider the ability, dedication, compassion, common 16 sense, integrity of the candidates, race and gender of 17 the candidates, and other demographic factors to ensure 18 nondiscrimination to the greatest extent possible of all 19 segments of the population of South Carolina. 20 Since we've received applications, we've 21 conducted background investigations of each candidate 22 including credit, law enforcement and driver's license 23 checks. 24 determining the level of knowledge that each candidate 25 has with respect to substantive public utility issues, We have a written examination to assist us in www.compuscriptsinc.com 2/11/2013 4 1 ethical constrains applicable to the Commission in the 2 operation of the Commission. 3 We are here today to have further questioning 4 of the candidates, and to give them an opportunity to 5 make any statement with respect to their qualifications 6 and desires to serve as a Commissioner. 7 Committee Members in attendance will also be given the 8 opportunity to ask questions of the candidates. 9 The Review The Subcommittee will present this report of 10 the candidates to the Full Committee for review meeting 11 and adoption. 12 tentatively scheduled for March 19th. 13 A meeting of the Full Committee is We anticipate the Review Committee will issue a 14 report to the General Assembly on April 11th. 15 may not seek pledges until 48 hours after the Review 16 Committee has issued its official report. 17 will be notified of the time that the report is 18 officially issued. We're going to briefly go into -- 20 REPRESENTATIVE SANDIFER: Candidates 19 21 22 23 Candidates I make a motion to go into Executive Session. All right. Executive Session. We have a motion to go into Do I have a second? 24 REPRESENTATIVE FORRESTER: 25 SENATOR HUTTO: All right. Second. We're just going to www.compuscriptsinc.com 2/11/2013 5 1 discuss how we're going to handle today, and then we'll 2 be right back out. 3 All in favor say, "Aye." 4 (Multiple speakers respond, "Aye.") 5 SENATOR HUTTO: 6 7 8 9 All right. We're now in Executive Session. (The Committee went into Executive Session from 9:27 a.m. to 9:45 a.m.) SENATOR HUTTO: All right. We're back in 10 public session and ready to proceed with our first 11 candidate, David Cannon. 12 (David C. Cannon was duly sworn, after which 13 testimony commenced at 9:45 a.m.) 14 MR. FIFFICK: 15 I'm going to summarize your educational Good morning, Mr. Cannon. 16 background and experience for purposes of the record, and 17 then we'll get going. 18 Mr. Cannon obtained a Bachelor of Science 19 Degree in Mechanical Engineering from Clemson College in 20 1959, and a Master of Science in Instrumentation 21 Engineering in 1964, from Case Institute of Technology, 22 in Cleveland, Ohio. 23 University of North Carolina as a graduate student but 24 left prior to earning an advance degree. 25 Mr. Cannon also attended the In 1959, Mr. Cannon became a junior engineer at www.compuscriptsinc.com 2/11/2013 6 1 Sonoco Products in the design department. 2 1964, he was a graduate teaching assistant and a graduate 3 student at Case Institute. 4 was senior project engineer at Sonoco Products, in 5 Hartsville, South Carolina. 6 From 1962 to From 1965 to 1986, Mr. Cannon While at Sonoco, Mr. Cannon led an engineer 7 design team and was responsible for product design, 8 testing, production, and development. 9 From 1987 to 2001, Mr. Cannon was president and 10 CEO of Edisto Seafarms, Incorporated, on Edisto Island, 11 which was the largest shrimp farm east of the 12 Mississippi. 13 profitability until a series of alien viruses caused 14 successive crop failures and bankruptcy. 15 The company operated with increasing From 2002 to 2004, Mr. Cannon was a contract 16 engineer with Sonoco Products again, and finally from 17 2005 to 2012, he's been president of Production 18 Engineering, LLC. 19 engineering including earthquake and hurricane resistance 20 on Edisto Island. 21 This LLC does residential design and Mr. Cannon, other than changes you've already 22 submitted to the Committee, do you have any changes that 23 you would like to make to your Personal Data 24 Questionnaire that you submitted with your application? 25 MR. CANNON: No. www.compuscriptsinc.com 2/11/2013 7 1 MR. FIFFICK: I would request that Mr. Cannon's 2 Personal Data Questionnaire be entered into the record 3 with any confidential information being redacted. 4 5 (EXH. 1, Personal Data Questionnaire of David C. Cannon, marked for identification.) 6 MR. FIFFICK: As part of our background 7 investigation of the candidate, we've obtained a credit 8 check, driver's license and SLED check. 9 questions of a confidential and personal nature, and 10 Staff asks we'll request that they be taken up in Executive Session. 11 Before we begin questioning, do you have a 12 brief statement that you'd like to make, Mr. Cannon? 13 14 MR. CANNON: this problem with the ethics complaint. 15 16 Andy, you suggested that I address MR. FIFFICK: If you'd like to, you can do that in Executive Session or you can do that now. 17 SENATOR HUTTO: At the end of this public 18 session with you, we're going into Executive Session with 19 you in this room, if you just want to talk about that 20 with us. 21 MR. CANNON: I don't have any problem talking 22 in the public session. 23 it's fairly involved, that I write this up and distribute 24 it. 25 Andy suggested that I -- since So at this time -MR. FIFFICK: Can we have motion to make that www.compuscriptsinc.com 2/11/2013 8 1 as part of the record? 2 REPRESENTATIVE SANDIFER: 3 SENATOR HUTTO: 4 5 All right. I make a motion. We'll make that part of the record. (EXH. 1A, Status of Ethics Complaint by Tommy 6 Mann and Pete Anderson Against David C. Cannon, marked 7 for identification.) 8 9 10 MR. CANNON: If you like, I can discuss this. Or if you just want to take the written -MR. FIFFICK: If you'd just like to relate it 11 orally to us in the fashion that you deem appropriate, 12 and we can have it as part of the record as well. 13 MR. CANNON: The complaint was by Tommy Mann 14 and Pete Anderson, who are members of the town council. 15 I'm a member of the Planning Commission, and I was 16 appointed by the council. 17 I do work on the basis of professional 18 engineer, designing houses and additions to resist 19 hurricane force winds, floods, and earthquakes. 20 just give you the short version of this because it's 21 written out at length. 22 I'll I represented -- I was under contract with 23 Pavilion Restaurant to relocate a septic system, which 24 had been damaged due to erosion on the beach. 25 septic system out of operation because of the leaking www.compuscriptsinc.com DHEC put a 2/11/2013 9 1 nature of the septic tank, and the restaurant, as a 2 result, brought in porta potties. 3 This was not acceptable to the customer base, 4 and they were losing business big time. 5 you may know, we only have what they call, 13 golden 6 weeks, which are the summer weeks when the tourists are 7 there. 8 period of time, so we were under the gun to get the 9 septic system under operation. 10 At the beach, as You either make it or you don't during that The contract that I worked under specified that 11 the contract was satisfied on DHEC approval of the 12 design. 13 I got an e-mail stating that the design was approved. 14 There was a question about whether or not the traffic 15 could continue to flow across the corner of the beach 16 access. 17 This happened Thursday afternoon at about 4:50. The beach access was about 50 feet wide. 18 Traditionally, people cut across the corner to get into 19 the parking lot of the restaurant. 20 administrator advised me that only the town council could 21 make that decision. 22 minutes -- no, about an hour later. 23 The town The town council met about 15 Excuse me. During the public comment session, I presented 24 to the council the design and layout and explained the 25 traffic situation and asked them for a ruling as to www.compuscriptsinc.com 2/11/2013 10 1 whether or not they could continue to have it or not. 2 They went into Executive Session and decided five to 3 nothing not to allow that to happen. 4 There were several beach accesses on the beach 5 being used as private driveways, and they're trying to 6 eliminate this practice. 7 did, incidentally, come up with another way to get into 8 the parking lot. 9 that was lost, but that's the way it goes. 10 This was back in August, and we It took about another week of business This was in August. In December, Mann and 11 Anderson filed a complaint that I had violated Section 12 8-13-740(A)(5) of the Ethnics Reform Act alleging that 13 the law prohibited a public member from representing a 14 business before another public agency. 15 was found by the Ethics Commission. 16 Probable cause I hired a lawyer. The lawyer argued that the law stated that the 17 town council was not an agency of the municipality. It 18 is the governing body of the municipality. 19 not have responsibility over the actions of town council, 20 being an appointee of the town council, and the Ethics 21 Commission agreed and found in favor of us. Also, I did 22 Subsequent to that finding, Mann and Anderson 23 have refused to accept that ruling and have appealed to 24 the Governor, the Attorney General, and Representative 25 Bernstein to invalidate the dismissal of the complaint, www.compuscriptsinc.com 2/11/2013 11 1 and that's where the malice stands. 2 3 MR. FIFFICK: Are there any questions from the Committee? 4 5 Thank you, sir. SENATOR HUTTO: Representative Bernstein have anything to do with this? 6 MR. CANNON: I don't know why Representative 7 Bernstein has been served with these papers. 8 not. 9 10 MR. FIFFICK: Mr. Cannon, please state your full name and home address for the record. 13 MR. CANNON: 14 Street, Edisto, South Carolina. 15 MR. FIFFICK: 16 David Coker Cannon. 2802 Point Mr. Cannon, are you a registered voter? 17 MR. CANNON: 18 MR. FIFFICK: 19 Now to my more formal questions. 11 12 Thank you. No, she did Yes. In what congressional district are you a registered voter? 20 MR. CANNON: 21 MR. FIFFICK: 22 Mr. Cannon, why are you interested in serving 23 24 25 District 1. Thank you. on the Public Service Commission? MR. CANNON: Well, I'm a customer of a lot of the outfits that are regulated by the Public Service www.compuscriptsinc.com 2/11/2013 12 1 Commission, in particular, the electric rates have come 2 to my attention as being excessive and out of line with 3 other utilities that serve the state. 4 I have a home in Darlington, and I'm concerned 5 about Progress Energy. The rates at SCG, at the beach, 6 are something like 45 percent higher than they are under 7 the Progress utility. 8 would like to get involved with maybe doing something 9 about that. I'm curious as to why that is and 10 MR. FIFFICK: 11 Mr. Cannon, have you attended any hearings of 12 the Commission? 13 14 Thank you. MR. CANNON: Yes. I attended one in Charleston. 15 MR. FIFFICK: How do you expect to get up to 16 speed on issues that confront the Commission on a regular 17 basis? 18 MR. CANNON: Well, I've been reading in the ORS 19 website and following the progress of these hearings in 20 the paper. 21 MR. FIFFICK: Thank you, sir. 22 Please describe your experience -- and briefly 23 is perfectly fine -- or expertise in any of the following 24 areas including the time you've been engaged in the 25 issues: Energy issues, telecommunication issues, www.compuscriptsinc.com 2/11/2013 13 1 consumer protection and advocacy issues, water and waste 2 water issues, finance, economics, statistics, accounting, 3 engineering, and law. 4 MR. CANNON: Well, of course, engineering is my 5 field. Not specifically electrical utility engineering, 6 but I have a background in engineering. 7 MR. FIFFICK: 8 Are you familiar with the 2006 Advisory Opinion 9 issued by the Review Committee dealing with attendance at 10 Thank you, sir. legislative receptions? 11 MR. CANNON: 12 MR. FIFFICK: Yes, I am. Are you familiar with the PURC 13 decision? That's the meeting on January 15th, which 14 clarifies the 2006 Advisory Opinion. 15 MR. CANNON: 16 MR. FIFFICK: 17 Yes. Have you attended any legislative receptions since receiving the Advisory Opinion? 18 MR. CANNON: No. 19 MR. FIFFICK: 20 Assume you were serving on the Commission and Thank you, sir. 21 you were approached by someone wanting to discuss a 22 matter that is or may become an issue in a proceeding, 23 how would you handle the situation? 24 25 MR. CANNON: Well, that would be an ex parte situation, and I would just not have any conversation www.compuscriptsinc.com 2/11/2013 14 1 with them. 2 MR. FIFFICK: Are you aware that Commissioners 3 are subject to the Judicial Code of Conduct as well as 4 State Ethics Laws? 5 MR. CANNON: 6 MR. FIFFICK: Yes. Are you affiliated with any 7 political parties, boards, or commissions that would need 8 to be reevaluated if you were nominated and elected? 9 MR. CANNON: 10 MR. FIFFICK: No. Do you belong to any 11 organizations that discriminate based on race, religion, 12 or gender? 13 MR. CANNON: 14 MR. FIFFICK: 15 16 No. Mr. Cannon, what do you believe is the appropriate demeanor for a Commissioner? MR. CANNON: The appropriate demeanor is one 17 that would not bring discredit on the Commission or any 18 appearance of impropriety. 19 MR. FIFFICK: Does that apply only while you're 20 on the bench? 21 seven days a week, 24 hours a day? 22 23 Or do you think those rules apply to you MR. CANNON: It's total application. Twenty-four hours a day. 24 MR. FIFFICK: Thank you, sir. 25 Do you feel there is ever a role for sternness www.compuscriptsinc.com 2/11/2013 15 1 or anger with a Commissioner? 2 3 MR. CANNON: No. That's not according to the code. 4 MR. FIFFICK: 5 You touched on this briefly but, Mr. Cannon, 6 could you please explain the general rule regarding ex 7 parte communications. 8 MR. CANNON: 9 Thank you, sir. In general, if a subject is going to come before the Commission or anticipated to come 10 before the Commission, you're not to have any discussions 11 with third parties about that. 12 If you inadvertently have a conversation on a 13 subject that comes before the Commission, then you should 14 report that and it becomes part of the record. 15 general, the cure for that would be to have all the 16 parties involved in the subject brought up to speed on 17 that communication and give them an opportunity to rebut. 18 In In a case of a serious breach of the ex parte 19 rule, the commissioner would have to recuse himself from 20 discussion. 21 MR. FIFFICK: 22 Please explain the role of the Public Service 23 Commission in regulating government-owned communication 24 service providers. 25 MR. CANNON: Thank you, sir. They do not regulate www.compuscriptsinc.com 2/11/2013 16 1 government-owned service providers. 2 MR. FIFFICK: Thank you, sir. 3 Couple more housekeeping questions. Have you 4 sought or received the pledge of any legislator prior to 5 this date? 6 MR. CANNON: 7 MR. FIFFICK: No. Have you sought or been offered a 8 conditional pledge of support by any legislator pending 9 the outcome of your screening? 10 MR. CANNON: 11 MR. FIFFICK: No. Have you asked any third parties 12 to contact members of the General Assembly on your behalf 13 before the final and formal screening report has been 14 released? 15 MR. CANNON: 16 MR. FIFFICK: No. Are you aware of any friends or 17 colleagues contacting members of the General Assembly on 18 your behalf? 19 MR. CANNON: 20 MR. FIFFICK: No. Are you familiar with the 48-hour 21 Rule which prohibits a candidate from seeking pledges for 22 48 hours after the report has been submitted to the 23 General Assembly? 24 MR. CANNON: 25 MR. FIFFICK: I am. Do you plan to serve your full www.compuscriptsinc.com 2/11/2013 17 1 term if elected? 2 MR. CANNON: 3 MR. FIFFICK: I do. Mr. Chairman, I have no further 4 questions and suggest that the Committee enter into 5 Executive Session, if it's the will of the Committee, to 6 examine Mr. Cannon. 7 SENATOR HUTTO: 8 Anybody on the Committee have a question? 9 REPRESENTATIVE SANDIFER: 10 Mr. Chairman. 11 before us today. Thank you. Thank you, Thank you, Mr. Cannon, for appearing 12 Let me go back to your initial rationale for 13 wanting to serve on the Public Service Commission, and 14 that was dealing solely with the electric rates that you, 15 as a ratepayer, are paying on two different residences. 16 Is that what I understood you to say? 17 MR. CANNON: 18 19 That's my primary interest and motivation. REPRESENTATIVE SANDIFER: Would you describe 20 for us, please, what other issues might come before the 21 Commission other than electric rates? 22 MR. CANNON: Well, there's telecommunications, 23 gas rates, taxicab regulations, public transportation of 24 household goods, and toxic waste. 25 REPRESENTATIVE SANDIFER: Let's go back to your www.compuscriptsinc.com 2/11/2013 18 1 initial observation that your principal reason for 2 wanting to serve was the differential between the two 3 rates in two different locales. 4 I understand that Progress Energy, which is now 5 Duke, supplies you in the Darlington area. 6 you at your other home? 7 MR. CANNON: 8 REPRESENTATIVE SANDIFER: 9 SCG. And there's how much differential between the two? 10 MR. CANNON: 11 REPRESENTATIVE SANDIFER: 12 Who supplies About 45 percent. In your own thinking, is there any logical rationale for that? 13 MR. CANNON: Well, I understand SCG is building 14 two nuclear reactors, but Progress Energy also has 15 nuclear reactors that I know of. 16 REPRESENTATIVE SANDIFER: 17 under the Base Load Review Act? 18 MR. CANNON: 19 Do any of those come Well, the SCG do. Reactors do come under that Act. 20 REPRESENTATIVE SANDIFER: Would you describe 21 for me what that Act is saying as far as your rate is 22 right now? 23 MR. CANNON: Well, I have a chart of the annual 24 increase, and part of that is due to the Base Load Rate 25 Law, but how much is base rate and how much is just www.compuscriptsinc.com 2/11/2013 19 1 increase, you know, operating increase, I can't tell. 2 REPRESENTATIVE SANDIFER: Under the Base Load 3 review, what are they allowed to recover on an annual 4 basis right now? 5 MR. CANNON: They can recover whatever they've 6 spent to date. 7 dollars, I can't tell you that. 8 9 10 REPRESENTATIVE SANDIFER: to know that that's not true? They cannot do that, but Thank you, Mr. Chairman. Those are my questions. 13 14 Would it surprise you we'll get into that at a later time. 11 12 In terms of, you know, millions of SENATOR HUTTO: Any other members have a question? 15 REPRESENTATIVE FORRESTER: 16 You say your expertise is in the engineering 17 field. 18 State of South Carolina? I have a question. Are you presently a Registered Engineer in the 19 MR. CANNON: Yes, I am. 20 REPRESENTATIVE FORRESTER: When was the last 21 time you attended a continuing education to keep your 22 skills up to date? 23 MR. CANNON: Well, that happens all the time. 24 I just completed 15 credit hours towards the end of last 25 year. www.compuscriptsinc.com 2/11/2013 20 1 REPRESENTATIVE FORRESTER: 2 SENATOR HUTTO: 3 the Planning Commission? 4 MR. CANNON: 5 SENATOR HUTTO: 6 the Planning Commission? MR. CANNON: 8 SENATOR HUTTO: 11 SENATOR HUTTO: 14 SENATOR HUTTO: 18 You don't receive pay for that or anything. MR. CANNON: 17 Does it require you to file No. 13 16 Is that an appointment? annual reports with the Ethics Commission? MR. CANNON: 15 How does one become a member of Appointment by the town council. 10 12 Are you presently a member of Yes, I am. 7 9 That's all. No pay. If I use the word green energy, what does that mean to you? MR. CANNON: Green energy means it's a form of energy that does not pollute. SENATOR HUTTO: Probably produces no CO2. Do you know what percentage of 19 green energy is produced in South Carolina? 20 percentage of the total energy is considered green? 21 22 MR. CANNON: Something in the range of one and a half percent. 23 SENATOR HUTTO: 24 MR. CANNON: 25 What What is net metering? Net metering, I would assume, would be energy in minus energy out. In other words, www.compuscriptsinc.com 2/11/2013 21 1 what you buy from the power company minus what you 2 generate and send back. 3 4 SENATOR HUTTO: Service Fund is? 5 6 MR. CANNON: SENATOR HUTTO: questions? 9 10 I think that has to do with telecommunications. 7 8 Do you know what the Universal Anybody else have any Thank you. Motion to go into Executive Session -- we need you to stay. 11 REPRESENTATIVE SANDIFER: 12 (The Committee went into Executive Session from 13 10:06 a.m. to 10:11 a.m.) 14 SENATOR HUTTO: All right. 15 session. 16 How are you, sir? 17 staff counsel, Ms. Anderson. 18 Good morning. We'll start off with some questions by (John Edward Howard was duly sworn, after which testimony commenced at 10:12 a.m.) 20 MS. ANDERSON: 22 Back in open We'll call the next candidate. 19 21 I make a motion. I'm going to give a brief summary of your educational background and experience. Mr. Howard obtained a Bachelor of Science 23 Degree in Business from the University of South Carolina 24 after serving for a period with the US Army. 25 with the Public Service Commission since 2004, and is a www.compuscriptsinc.com He has been 2/11/2013 22 1 member of several national and regional associations of 2 regulatory commissions. 3 He is currently on the Board of Directors for 4 the National Association of Regulatory Commissioners, 5 where he chairs the Committee on Water. 6 Public Council Advisory Board, on the Water Research 7 Foundation, and he is on the Advisory Council of the New 8 Mexico State University Center of Public Utilities. 9 He is on the Prior to him coming onto the Public Service 10 Commission, he was in sales for a few companies involving 11 truck, office supplies, and furniture. 12 five years, Mr. Howard has attended Rate School, Current 13 Issues, Emerging Issues Policy Forum, Water Summit, Water 14 Policy Forum, University of Florida PURC Issues 15 Conference, and Critical Consumer Issues Forum. 16 Over the past He is also active in the Moncks Corner Lions 17 Club, St. Matthews Lutheran Church, Kiwanis Club of 18 Charleston, and the Hibernian Society. 19 As part of our background investigation of Mr. 20 Howard, we obtained a credit check, driver's license, and 21 SLED check. 22 confidential nature, and we request that they be taken up 23 in Executive Session at the appropriate time. 24 25 Staff has questions of a personal or Before we begin questioning, do you have a brief opening statement that you'd like to make? www.compuscriptsinc.com 2/11/2013 23 1 MR. HOWARD: No. I really look forward to the 2 exchange because I just feel like it gives me an 3 opportunity to get a feeling about what's concerning you 4 as the Commission, and, likewise, I hope you learn more 5 about me as a Commissioner. 6 sidebars to what it's like to be a Commissioner. 7 8 I'm looking forward to it. MS. ANDERSON: 10 address for the record. 12 MR. HOWARD: Please state your full name and My name is John Edward Howard. 1908 Bowen's Island Road, Charleston, 29412. 13 MS. ANDERSON: 14 MR. HOWARD: 15 MS. ANDERSON: 16 Are you a registered voter? Yes, I am. Which congressional district are you registered in? 17 MR. HOWARD: 18 MS. ANDERSON: 19 workday at the Commission offices. 20 Thank you very much. 9 11 Maybe I can share some MR. HOWARD: First congressional district. Please describe your ordinary I start my comment with this 21 preface, and I really, I spend a lot of time reading. 22 This job is probably, oh, 85 to 90 percent reading. 23 consequently, I spend most of my day reading. 24 25 So And if we don't have a meeting in Columbia, I will stay home and read because the time is two hours to www.compuscriptsinc.com 2/11/2013 24 1 Columbia and two hours back. 2 reading and doing things at home, and it's very quiet at 3 home, unlike the office. 4 at home. 5 That's time I could be So I get most of my work done Typically, Monday I will review the upcoming 6 case and read testimony. 7 briefings in Columbia. 8 hearings on Tuesday. 9 Commission meeting. Tuesday we generally have our Wednesday -- and sometimes Wednesday we have hearings and a Thursday is hearings. Friday is 10 basically just wrapping up what I've done and looking at 11 what I need to get done to start the next week. 12 I get up early. I get up at 4 or 5 o'clock and 13 get a lot of reading done. 14 obviously there are days we might not be in Columbia on 15 Thursday. 16 Wednesday. 17 That's a typical week, and But basically, in Columbia every Tuesday and Sometimes Thursday we might be in Columbia. MS. ANDERSON: Please describe your experience 18 or expertise in any of the following areas including any 19 time you've been engaged in any issues: 20 telecommunication issues, consumer protection and 21 advocacy issues, water and waste water issues, finance, 22 economics, statistics, accounting, engineering, and law. 23 MR. HOWARD: 24 MS. ANDERSON: 25 MR. HOWARD: Energy issues, You want me to do all of them? If you can give us a brief -It's going to be very brief. www.compuscriptsinc.com The 2/11/2013 25 1 biggest challenge on a nationwide level is energy. 2 being fueled somewhat by the advent of shale gas. 3 It's As Chairman of the Water Committee, I have some 4 reservations about it because I think it might be 5 artificially reducing the price of gas. 6 restrictions on the shale gas and hydraulic fracturing. 7 They can come up with very strict regulations and really 8 clamp down on the mining of hydro fracturing. 9 Very little So here we're having a lot of our coal 10 generating plants switching over to natural gas because 11 it's cheap now. 12 Regulations, then that price will skyrocket. 13 side is supply and demand. 14 that the well diggers are pulling off and going to wet 15 gas or oil because there's no money -- because the shale 16 gas, there's just so much available now. 17 is if the EPA doesn't come up with regulations, then 18 we've got a good, long term source of inexpensive national 19 gas that we could use. 20 If something happens with the EPA The other Right now there's so much gas I'm on the water board. The other side That's probably the 21 next biggest subject that we deal with. 22 perplexing subject. 23 they're justified, about water quality, service of their 24 companies, and we do everything that we can. 25 a whole lot of credit on that. It's really a We have people complaining, and I give ORS The sad part or the part www.compuscriptsinc.com 2/11/2013 26 1 that's hard to get a grip on is, over the last ten years, 2 per person or per residential consumption of water is 3 going down. 4 People are not using nearly as much water or 5 using less water because of more sophisticated commodes 6 with flushing and shower heads, and people are conserving. 7 So with less revenue, the company needs more money. 8 it's a spiral that's going down. 9 they want a rate increase, and they get the rate. 10 So They come up here, and So again, because of the price of it, people 11 conserve more water. 12 what do you do? 13 the Commission, to go to the hearings and hear the 14 people's problems. 15 So again, the price goes down. So It's a frustrating situation to sit on It's a sad situation. Telecom, we probably do less. You know, we do 16 a lot as you look at it on interconnection, but as far as 17 regulatory stuff goes, you've got to admit telecom is a 18 competitive market, so we don't play a role because the 19 alternative regulations in place, and a lot of them are 20 using that. 21 situation. 22 Lifeline and Link Up is an interesting As a matter of fact, we were in a conference 23 last week and commissioners from Georgia will tell you, 24 the Lifeline telephones -- they found some homes had as 25 many as 12 phones, and the company is getting paid $9. www.compuscriptsinc.com 2/11/2013 27 1 There's a lot of fraud and abuse in the system, 2 so consequently, I walked out of the meeting and ran into 3 Nan Edwards, and I said, We need to look into this. 4 luckily enough, that Commissioner walked out, and I said, 5 Go over and talk to this Commissioner. 6 off, and they were on top of it. 7 charging each person $5, and it was an arbitrary figure. 8 They just picked $5 out of the air to get a mailing 9 address for them, so they could see what kind of abuse 10 big thing. 13 dealing with broadband services. 14 Universal services state and nationwide are Accounting and finance? 15 guess. 16 gas. 19 That would be where I was in the gas industry. MS. ANDERSON: Economics, statistics, accounting. MR. HOWARD: accounting. 21 Street come into that? Economics, statistics, and Would that be Wall Street? 22 SENATOR HUTTO: 23 MR. HOWARD: 25 Or I could do gas, I I touched on the problem with gas with the shale 20 24 What they were doing is Now we don't regulate broadband, and that's the 12 18 And she called was done. 11 17 And Would Wall We'll let you go with that. I appreciate that. It might be a short answer, if you don't. I think in the past year, I've met six times www.compuscriptsinc.com 2/11/2013 28 1 with Wall Street brokers or investors. 2 conversation is about something that they want. 3 want less risk than the marketplace. 4 sure they have their cost recovered, and they put the 5 money out, and they want to make sure they get it back 6 and that these companies have a fair rate of return. 7 Most of the They They want to be I didn't realize, when I first got on the 8 Commission, the significance of that, and I guess I never 9 thought about it. It has a large place because if we're 10 considered fair regulators, they get a low interest rate, 11 and that's passed onto the consumer, so the consumer is 12 not paying a high interest rate. 13 Accounting. So that's my concern. The only thing I'd say about 14 accounting is -- and I think they pushed the date back, 15 but it's just -- they're talking about going to 16 international financial accounting, and it just doesn't 17 fit the regulatory model. 18 with rate base and that kind of stuff, and that doesn't 19 do it. We have a regulatory model So they're trying to get that working. 20 So if we're required by law to use 21 International Accounting Standards, hopefully they'll 22 have it for the Regulatory Committee. 23 MS. ANDERSON: 24 MR. HOWARD: 25 What else? Engineering or law. Engineering I have to pass on. Law -- with all you attorneys up there, I guess I should www.compuscriptsinc.com 2/11/2013 29 1 pass on that, too. 2 3 MS. ANDERSON: hearing? 4 How do you prepare for a How long does it take to prepare for a hearing? MR. HOWARD: That goes back to my opening 5 statement about reading. I really don't know. I was 6 telling Pat, I read a couple weeks where Duke is involved 7 in a rate case in North Carolina, and Duke's testimony is 8 5,000 pages not counting ORS. 9 reading. That's an awful amount of A lot is testimony and exhibits and that kind 10 of stuff, but I would say at least 3 or 4,000 pages of 11 reading, and that's where my four hours -- two hours on 12 the road to Charleston comes into play. 13 It gives me more time to read, and that's an 14 exaggeration because most cases are not nearly as intense 15 or long. 16 hour we're in the hearing room listening to testimony, I 17 guess I would spend three hours preparing for it because 18 a lot of questions wouldn't come up. 19 what will come up and what questions will be asked. 20 21 So I'd say for just as a wild guess, for every MS. ANDERSON: But you never know What type of contact do you have with Commission staff? 22 MR. HOWARD: A lot and very good. We have a 23 good relationship, and I guess Dr. Spearman is our 24 adviser. 25 accounting and functions like that, I go to him. He's an overall guru. He's a Ph. D, and www.compuscriptsinc.com I spend 2/11/2013 30 1 a lot of time with Phil Riley and Bill Richardson on the 2 water side, and I spend a lot of time with the staff, and 3 I have what I consider a very good relationship with 4 them. 5 MS. ANDERSON: If you were approached by 6 someone wanting to discuss a matter that is or may become 7 an issue in the proceeding, how would you handle the 8 situation? 9 MR. HOWARD: I would tell them I couldn't do 10 it. That would be a violation and depending what it was, 11 I would tell them to call ORS. 12 wouldn't do it. 13 MS. ANDERSON: If it was ex parte, I Are you familiar with the 2006 14 Advisory Opinion issued by the Review Committee dealing 15 with attendance at legislative receptions? 16 MR. HOWARD: 17 MS. ANDERSON: Oh, yes. Have you attended any 18 legislative receptions since receiving the Advisory 19 Opinion? 20 MR. HOWARD: 21 MS. ANDERSON: No. Are you familiar with the PURC 22 decision at its meeting on January 15th of this year 23 which clarified the 2006 Advisory Opinion? 24 MR. HOWARD: 25 MS. ANDERSON: Yes. Have you attended any www.compuscriptsinc.com 2/11/2013 31 1 legislative receptions or any other legislative caucus 2 meetings, other than delegation meetings, on or after 3 January? 4 MR. HOWARD: 5 MS. ANDERSON: 6 I haven't attended any meetings. What is the appropriate demeanor for a Commissioner? 7 MR. HOWARD: 8 MS. ANDERSON: 9 MR. HOWARD: Appropriate what? Demeanor. I think the number one thing, I 10 think, is integrity of the office and the independence of 11 the office, and I think my demeanor should reflect that. 12 That doesn't mean being stiff-collared, but 13 recognizing who you are and the position you're in and 14 respecting it. 15 MS. ANDERSON: Does that apply when you're on 16 the bench or does that apply seven days a week, 24 hours 17 a day? 18 19 20 21 MR. HOWARD: I think everything I do reflects on that, so I would say seven days a week. MS. ANDERSON: Is there ever a role for sternness or anger with Commissioners? 22 MR. HOWARD: 23 MS. ANDERSON: 24 MR. HOWARD: 25 MS. ANDERSON: Ever a what? A role for sternness or anger. No. Has the job been as you expected www.compuscriptsinc.com 2/11/2013 32 1 it to be? 2 MR. HOWARD: 3 MS. ANDERSON: 4 Has the what? Has the job been as you expected it to be? 5 MR. HOWARD: No. It's a lot more diverse than 6 I expected. Either one of the subjects we mentioned, 7 there's just a whole lot of different branches to it. 8 Electricity, we have, you know, smart grids, wind energy, 9 bio mass. It's a lot more diversified than I thought it 10 would be, and that accounts for a lot of reading. 11 reading is not just testimony. 12 magazines. 13 Testimony, and what I call educational reading from trade 14 magazines, and a whole lot of blogs on the internet. 15 16 My I read a lot of I basically divide my reading into two parts: MS. ANDERSON: How do you think you've done since you've been elected to the Commission? 17 MR. HOWARD: Well, I think I've done real good. 18 I came on the Commission, as most of you know, on 19 Wednesday, and we went to National Conference on 20 Saturday. 21 great advantage, and I feel that I stay on top of it, and 22 I do my homework. 23 24 25 So any degree of learning curve would be a I've learned a lot. MS. ANDERSON: Have you sought or received the pledge of any legislator prior to this date? MR. HOWARD: No. I guess I would rather answer www.compuscriptsinc.com 2/11/2013 33 1 20 questions on nuclear construction than that question. 2 It's just so variable. 3 We call it a political process. You know, a lot of times -- well, not a lot of 4 times because I now, with respect to my fellow members on 5 the General Assembly, I try to avoid General Assembly 6 members because the first thing they're going to say is, 7 Are you in this election cycle and what can I do for you? 8 9 And I generally say let me get back to you. When I first ran, the key word was commitment. As I 10 understood in 2004, we could ask, but we couldn't use the 11 word commitment. 12 Now I think the definition has gone further 13 than that and, you know, it just is almost a matter of 14 common courtesy. 15 answer the question. 16 obvious what they can do for me. 17 MS. ANDERSON: 18 What can I do to help you? You have to When you're running, I think it's I have a few follow up questions. 19 Have you sought or been offered a conditional 20 pledge of support by any legislator pending the outcome 21 of your screening? 22 MR. HOWARD: 23 MS. ANDERSON: No. Have you asked any third parties 24 to contact members of the General Assembly on your behalf 25 before the final and formal screening report has been www.compuscriptsinc.com 2/11/2013 34 1 released? 2 MR. HOWARD: 3 MS. ANDERSON: No. Are you aware of any friends or 4 colleagues contacting members of the General Assembly on 5 your behalf? 6 MR. HOWARD: 7 MS. ANDERSON: No. Are you familiar with the 8 48-hour Rule which prohibits candidates from seeking 9 pledges for 48 hours after the report has been submitted 10 to the General Assembly? 11 MR. HOWARD: 12 MS. ANDERSON: 13 Yes, ma'am. Do you plan to serve your full term if reelected? 14 MR. HOWARD: 15 MS. ANDERSON: Yes. Mr. Chair, I'd like to put in 16 the record, Mr. Howard's PDQ, which has been redacted for 17 personal and confidential information. 18 19 (EXH. 2, Personal Data Questionnaire of John Edward Howard, marked for identification.) 20 21 SENATOR HUTTO: 24 25 Any member of the Commission have any questions? 22 23 All right. REPRESENTATIVE SANDIFER: Thank you, Mr. Chairman. Mr. Howard, thank you for serving as Chairman of the Committee on Water. It's an important position www.compuscriptsinc.com 2/11/2013 35 1 2 and important for our State. However, it raised a question with me when you 3 started discussing, for lack of a better term, 4 opportunities that we have in this State, as well as in 5 the United States. 6 water being down and that we were conserving more. 7 that good or bad? 8 9 10 11 12 13 14 15 16 You were talking about the usage of MR. HOWARD: Is It's good if you're the utility, but it's bad if you're the consumer. MS. ANDERSON: If you're the State of South Carolina, is it good or bad? MR. HOWARD: State of South Carolina would probably be a pro and con, but I would go with bad. MS. ANDERSON: So you think it's inappropriate for us to conserve water. MR. HOWARD: No. I think there are other 17 mechanisms that other states use to help offset the 18 revenue loss of the water companies because the water 19 companies have so much fixed costs. 20 variable cost, so when the cost goes down the utilities 21 still have to recoup costs from the water supply, the 22 waste water treatment plants. 23 It's not a large It's a bad situation. And just to mention some -- well, one in 24 particular. Well, the problem with a small water 25 company -- one in particular. I think it's 13 states www.compuscriptsinc.com 2/11/2013 36 1 now, and I'm sure you've probably heard about it, the DIS 2 mechanism. This stands for distribution infrastructure 3 discharge. Pennsylvania was the first state that really 4 pushed it. They put 3 percent surcharge on everyone's 5 bill, and that surcharge money had to be spent on 6 infrastructure improvement. 7 We were in a hearing the other day, a night 8 hearing, and Representative Norman brought a pipe in that 9 was in the ground for years. And the company just hadn't 10 replaced it and said they didn't have the money to 11 replace it. 12 Okay, we have so much infrastructure pipe we have to 13 replace a year. 14 My point is, you have to budget, and say, The attitude of the company when I questioned 15 them in the hearing was these pipes are still good, so 16 why pull them up? 17 whatever you want to use, the clay pipe is still in the 18 ground? 19 ground. 20 So when I ask, How many miles or feet, Eighty percent of the clay pipe is still in the If they had some mechanism to recover some of 21 this cost -- and that's why I didn't say it was bad, 22 Mr. Chairman. 23 is that these small companies don't come in for a rate 24 increase because they can't afford a rate case. 25 company didn't come in for a rate increase for 20 years. It's just a situation. www.compuscriptsinc.com And another thing One 2/11/2013 37 1 Probably more than that. 2 So a lot of things -- and we don't do it in the 3 current set-up. 4 could do, but a lot of states are going to staff in rate 5 cases. 6 case may be in a particular state, and have them, you 7 know, verify that the money is being spent on 8 infrastructure replacement. 9 It could be something that someone else They go to their public staff, or whatever the REPRESENTATIVE SANDIFER: Why don't we move 10 onto another subject. You talked about a meeting at 11 which you were involved dealing with Lifeline and Link 12 Up, and you saw Nan Edwards afterward, and said, you 13 know, you all need to investigate it. 14 MR. HOWARD: 15 REPRESENTATIVE SANDIFER: Why not the PSC? We're not an investigative body. Okay. What is Wall 16 Street's impact on South Carolina utilities, and 17 therefore, is it or is it not important that we have 18 liaison with Wall Street? 19 MR. HOWARD: It's very important that we have 20 liaison with Wall Street because Wall Street has to know 21 the mind of the regulator. 22 there was a picture of the Trade Regulation saying how 23 much Wall Street was looking at us. 24 25 When I first got on there, We hadn't made any decision, but we very much -- I mean, I was in conference last week, and I had www.compuscriptsinc.com 2/11/2013 38 1 a Wall Street analyst want to talk about the Commission, 2 so we sat down for 15 or 20 minutes. 3 REPRESENTATIVE SANDIFER: One final question. 4 You mentioned a few minutes ago that 5 legislators, on certain occasions, come up to you and 6 ask, What can we do as a legislator? 7 8 9 How frequent or infrequent is that type of occurrence? MR. HOWARD: Very infrequent. That's why I 10 don't go, and I have some conversation about, you know, 11 we used to see when you were running and now we don't. 12 REPRESENTATIVE SANDIFER: 13 SENATOR HUTTO: 14 15 Commissioners? Thank you. Any other questions from any I have a couple questions. The issue of green energy, does that come up at 16 Commission Hearings? 17 rate increases, do you take into account whether they're 18 pursuing green alternatives? 19 When utilities come before you for MR. HOWARD: Yes, we do. But I have a 20 skeptical attitude. There's no traditional renewable 21 resources in our state. 22 biomass is a very, very small percentage of the total 23 generation. 24 mention wind offshore. 25 state is that it takes too much room. We mentioned biomass, but Solar and wind is not in play. You might The problem with solars in our www.compuscriptsinc.com The problem with 2/11/2013 39 1 offshore wind, the cost of getting it in. 2 with saltwater, and you're dealing with a lot of 3 high-priced real estate. 4 You're dealing These people that pay a lot of money don't want 5 to look out on the beach at Myrtle Beach and see wind 6 turbines. 7 more money to bring it in. 8 made reference at one time, I'm so glad that the 9 legislature, in their wisdom, has not imposed renewable 10 oil standards on the utilities because it would be hard 11 to achieve. 12 So it has to get beyond there, and it costs It's a tough situation. I You'd have to buy power from South Dakota or 13 Arizona, and that cost would be prohibitive, so the 14 consumer would be paying more money just for the sake of 15 having renewable energy, and most would rather pay less 16 and have traditional generation. 17 SENATOR HUTTO: What about a consumer who 18 wanted to put their own solar panel up, and they may 19 actually from time to time generate more than enough 20 power for their house? 21 22 Should they be able to put that excess power back on the grid? 23 MR. HOWARD: Right. And I agree. There's not 24 a lot. I think the three major electric utilities each 25 have a tariff that deals with that, but it's a very www.compuscriptsinc.com 2/11/2013 40 1 small -- in some cases, I'm just guessing, less than 20 2 people that take advantage of that. 3 two-way meter. 4 5 You have to have a It could be pretty costly. SENATOR HUTTO: Have you all had cases involving that? 6 MR. HOWARD: We've had a lot of -- well, we've 7 had briefings on it. And briefings -- ex parte 8 briefings. 9 it's just my opinion, but the technology changes every Not a whole lot. It's just -- and again, 10 day, so I wouldn't want to burden our ratepayers with new 11 technology that within five years is going to be half the 12 cost of whatever percentage you want to put on it. 13 I guess I'm skeptical on that also because of 14 the price point. 15 guess -- you know, our job is a balancing act between the 16 consumer and the utilities, but right now in the hard 17 economic times in South Carolina, it's just tough. 18 guess the first thing that I do is, is this rate increase 19 justified? 20 not everybody can afford it. 21 You know, the first thing that, I Can the people afford it? And I And in all cases, The same is true with energy efficiency. 22 Energy efficiency is a big thing, and we have -- and you 23 all know better than I do. 24 percentage of mobile homes in the United States, and they 25 just can't be made energy efficient with poor We have the highest www.compuscriptsinc.com 2/11/2013 41 1 construction and proper coating. 2 be able to make it energy efficient. 3 achieve it in mobile home. 4 5 SENATOR HUTTO: I don't know that you'd He's not going to Has the Universal Service Fund outlived the purpose for which it was created? 6 MR. HOWARD: 7 areas that need to be addressed. 8 around 90 percent. 9 and I guess somehow in the future mix, it will be mixed 10 There are still high cost I think it's addressed I think it's achieved a lot of it, in with broadband. 11 12 No. SENATOR HUTTO: Anyone else have follow-up questions? 13 REPRESENTATIVE FORRESTER: 14 follow up on the solar issue. 15 third-party sales? 16 MR. HOWARD: I just would like What are your thoughts on As long as our utilities can 17 furnish it, furnish the base load and serve their native 18 load with a fair reserve margin, I don't see why we would 19 need it. 20 Does that answer your question? Third-party sales -- you were talking about the 21 conversation with solar -- you know, we have a Cost of 22 Service Regulation, and in a rate case, we go over it 23 with a fine-tooth comb. 24 mind, that our consumers are getting the best cost that 25 their utility -- from their utility provider. So we know for a fact, in our www.compuscriptsinc.com 2/11/2013 42 1 So just for the sake of going to a third-party 2 to, you know, just to say we're doing it, I don't see the 3 need of it. 4 from third-parties. 5 6 SENATOR HUTTO: 10:47 a.m. to 10:53 a.m.) SENATOR HUTTO: 10 Back in open session. (Carolyn Leone Williams was duly sworn, after which testimony commenced at 10:56 a.m.) 12 13 We'll now go back (The Committee went into Executive Session from 9 11 All right. into Executive Session. 7 8 Now every one of our utilities do purchase MR. FIFFICK: Good morning, Ms. Williams. How are you? 14 MS. WILLIAMS: 15 MR. FIFFICK: Good morning. I'm doing well. I'm going to summarize your 16 educational background and experience and relevant 17 information for the record. 18 MS. WILLIAMS: 19 MR. FIFFICK: Okay. Ms. Williams attended Columbia 20 College in 1974, before graduating from Wake Forest 21 University in 1979, with a Bachelor's of Arts Degree in 22 History. 23 and Environmental Planning from the University of 24 Virginia in 1982. 25 Ms. Williams then obtained a Master's in Urban From 1982 to 1985, Ms. Williams served as a www.compuscriptsinc.com 2/11/2013 43 1 planner for the Department of Planning and Urban 2 Development for the City of Charleston, then was city 3 planner for the City of Cincinnati, Ohio, from 1985 to 4 1986. 5 Ms. Williams returned to Charleston where she 6 served as an instructor in urban planning for the College 7 of Charleston from 1989 to 1992, while also serving as 8 planning administrator for the Department of Planning and 9 Urban Development for the City of Charleston from 1986 to 10 1982. 11 From 1992, to present, she's been the project 12 manager for the Department of Planning, Preservation and 13 Sustainability for the City of Charleston. 14 Other than changes that you've already 15 submitted, do you have any changes to your Personal Data 16 Questionnaire that you've submitted with your 17 application? 18 MS. WILLIAMS: 19 MR. FIFFICK: I do not. I would request that 20 Ms. Williams' Personal Data Questionnaire be entered into 21 the record with any confidential information being 22 redacted. 23 24 25 (EXH. 3, Personal Data Questionnaire of Carolyn Leone Williams, marked for identification.) MR. FIFFICK: As part of our background www.compuscriptsinc.com 2/11/2013 44 1 investigation of the candidate, we obtained a credit 2 check, driver's license, and SLED check. 3 For the record, I would like to state that the 4 credit check, driver's license, and SLED check revealed 5 no negative results that should be brought to the 6 attention of the subcommittee. 7 Before we begin questioning, would you like to 8 make a brief statement? 9 MS. WILLIAMS: 10 I would. Thank you very much. I want to begin by telling you how impressed I 11 am with the work of the Public Service Commission and the 12 Office of Regulatory Services. 13 knowledge that the Commissioners must have really 14 impressions me, and then in signing up for the Docket 15 Management System and getting those every day and 16 realizing how accessible everything that goes before the 17 Commission is to the public, it makes me very proud to be 18 a citizen of South Carolina and all that went into 19 creating this system. 20 The vast array of I'd like to give you a little bit about the 21 experiences that I've seen that relate as a city planner 22 to the Public Service Commission. 23 planner apply in the past. 24 Public Service Commissioner, a city planner deals with a 25 wide range of elements of the city, whether it's zoning You may not have had a Similar to the work of a www.compuscriptsinc.com 2/11/2013 45 1 or parks or the quality of life or the economic vitality 2 of the city or ensuring that in our long range plans that 3 the water capacity works for the future ideas of the city 4 to really envision the future goals of the city to ensure 5 that they are sustainable and also ensure that we can pay 6 for the elements that are part of the strategic mission 7 for the city. 8 9 All of those are examples, so you can see there's a similarity in terms of the vastness that's 10 covered. 11 listen to all those involved and to understand the 12 subject at hand. 13 has been that diversity, delving deeply into one issue, 14 making recommendations and moving onto a new challenge. 15 A planner also is trained to research, to Part of what I've enjoyed in my career Some of the examples that have occurred my 16 life, as a planner or a project manager, include working 17 on a down-zoning for an island that was part of a mission 18 that was part of a plan. 19 but it was part of what the community wanted. 20 the environmental permitting process associated with the 21 marina that had dirty silt and dirty land and needing to 22 clean that up appropriately, developing a senior center 23 and the fund raising associated with it and the community 24 building associated with it, creating a plan for downtown 25 Charleston that looked at businesses as well as housing It was not an easy thing to do, www.compuscriptsinc.com Overseeing 2/11/2013 46 1 and quality of life and transportation, creating a plan 2 for purposes of port terminals, and finally creating 3 Charleston Green Business Challenge that works with the 4 Alcoas and the Boeings but also works with the small mom 5 and pop stores to increase their energy efficiency and 6 water conservation. 7 Each of these circumstances is vastly 8 different. We listened to the community. 9 the idea and prepared recommendations. We researched Often that 10 research involved wildlife, the Budget and Control Board, 11 DHEC, and the State Energy Office. 12 what I've appreciated is being a good listener, working 13 on consensus building where it's achievable, listening, 14 delving deeper, forming opinions. 15 relate very well to the life of a Public Service 16 Commissioner. 17 Throughout my career, Are all items that I became interested in serving on the Public 18 Service Commission when a friend called me to let me know 19 the timing was coming up. 20 I'd served 30 years within government, and I'm ready for 21 a new challenge. 22 be a good fit with my career. 23 I've focused intently on sustainability, intently on 24 energy efficiency looking at greenhouse gases. 25 The timing also worked that Service for the Commission appears to For the past five years, Interestingly, some of my very first work with www.compuscriptsinc.com 2/11/2013 47 1 the city had to do with annexation, and many of those 2 annexations came about because of communities that had 3 private sewer treatment systems that were not working 4 effectively, and we worked with them to bring them into a 5 municipal system as well as to the city. 6 Finally, I really explored the Public Service 7 Commission in a very deliberative way. At each point so 8 far, I've found the work that they do incredibly 9 engaging, stimulating, dynamic. It seems to be a good 10 fit, in terms of wanting to continue to offer service, as 11 well as a challenge for myself. 12 MR. FIFFICK: 13 I have a series of standard questions that Thank you. Thank you, ma'am. 14 we're going to ask everyone. 15 full name and home address for the record. 16 17 MS. WILLIAMS: Could you please state your Carolyn Leon Williams. Beverly Road, Charleston, South Carolina, 29407. 18 MR. FIFFICK: 19 Are you a registered voter? 20 MS. WILLIAMS: 21 MR. FIFFICK: 22 7 Thank you. Yes. In what congressional district are you registered to vote? 23 MS. WILLIAMS: Congressional district 1. 24 MR. FIFFICK: You touched on this in your 25 opening statement, is there anymore you'd like to tell us www.compuscriptsinc.com 2/11/2013 48 1 about why you're interesting in serving on the Public 2 Service Commission? 3 MS. WILLIAMS: 4 MR. FIFFICK: 5 I think I've covered it. Have you attended any hearings of the Commission? 6 MS. WILLIAMS: I have. I attended a rate 7 hearing, a public hearing regarding the rate. 8 attended some of the deliberations related to that rate 9 case and went to an ex parte presentation related to the 10 integration of resource planner with SCANA. 11 12 13 I also MR. FIFFICK: Have you read any Commission decisions? MS. WILLIAMS: I have. I read a demand-side 14 management related SCANA case through my work, probably 15 three or four years ago. 16 e-mails, it made it very easy to click into something and 17 see a settlement or to see a Commission directive. 18 skimmed a lot. 19 MR. FIFFICK: Also, just with the daily I've Along those same lines, how do 20 you expect to get up to speed on issues confronting the 21 Commission? 22 MS. WILLIAMS: From my understanding, there's a 23 two-week training that may be provided. There's also a 24 National Association of Regulatory Utility Commissioners 25 that offers training. I would think there would be a lot www.compuscriptsinc.com 2/11/2013 49 1 of reading of past cases. I understand there's a 2 terrific staff, as well as fellow Commissioners to learn 3 from. 4 MR. FIFFICK: Thank you. 5 Again, you addressed this in your opening 6 statement, but is there anymore that you'd like to 7 describe in terms of your experience or expertise in any 8 of the following areas, and you may want to include the 9 time you were engaged in those issues: Energy issues, 10 telecommunication issues, consumer protection and 11 advocacy issues, water and waste water issues, finance, 12 economics, statistics, accounting, engineering or law. 13 MS. WILLIAMS: The ones that I checked on my 14 application were energy, water and waste water, as well 15 as consumer protection and advocacy. 16 efficiency realm and energy realm that I'm associated 17 with with the City of Charleston has to do with looking 18 at ways the city can become more sustainable. The energy 19 I've learned a vast amount about some renewable 20 resources, such as offshore wind, and we've talked a good 21 bit about that. 22 created system called The Green Business Challenge that 23 we've got about 70 business that have participated each 24 year thus far. 25 they've identified that they can improve on in terms of We've also tried to create -- we've They have a scorecard with items that www.compuscriptsinc.com 2/11/2013 50 1 energy, and that also tends to relate to their bottom 2 line and what they're able to save as a result of those 3 energy efficiencies. 4 but a lot of it relates to energy. 5 There's water conservation as well, Another element within the past five years has 6 been working with SCG on data that they have given the 7 City of Charleston for both its operations as well as the 8 community. 9 estimate for various years. 10 11 It's been turned into a greenhouse gas Additionally, we estimate transportation also and the impact of that. The water and sewer item I checked really has 12 to do with the early years of working with annexations 13 and working with waste water treatment plants that were 14 no longer functioning appropriately and working with 15 those communities to bring them onto a city system and 16 seeing the stress that that caused those particular 17 organizations. 18 Additionally, also in the long range plan, you 19 also work with water planners to understand where there 20 might be any pressure points where you have the quality 21 and the quantity of water that you need. 22 consumer protection advocacy side, my work is on the 23 advocacy side. 24 advocacy planner who recognizes that while I represent 25 all of the city in their long range planning, I From the As a planner, I'm trained more as an www.compuscriptsinc.com 2/11/2013 51 1 particularly try to understand those who are going to be 2 less involved and those who may need information provided 3 to be able to operate effectively and respond to zoning 4 and plans as well as the angle of just providing 5 information to a planning team of citizens and listening 6 and helping them to lead themselves to the vision that 7 they want for their community. 8 MR. FIFFICK: Thank you, ma'am. 9 Are you familiar with the 2006 Advisory Opinion 10 issued by the Review Committee dealing with attendance at 11 legislative receptions? 12 MS. WILLIAMS: 13 MR. FIFFICK: Yes. Are you familiar with the PURC 14 decision at its January 15th meeting of this year which 15 clarified the 2006 opinion? 16 MS. WILLIAMS: 17 MR. FIFFICK: 18 Yes. Have you attended any legislative receptions since receiving that Advisory opinion? 19 MS. WILLIAMS: 20 MR. FIFFICK: No. Assuming that you're serving on 21 the Commission and you're approached by someone wanting 22 to discuss a matter that is or may become an issue in a 23 proceeding, how would you handle that situation? 24 25 MS. WILLIAMS: I would explain my role politely as a Commissioner and that I cannot enter into any of www.compuscriptsinc.com 2/11/2013 52 1 those conversations and would direct them to appropriate 2 staff. 3 MR. FIFFICK: Are you aware that Commissioners 4 are subject to the Judicial Code of Conduct as well as 5 State Ethics Laws? 6 MS. WILLIAMS: 7 MR. FIFFICK: Absolutely. Are you affiliated with any 8 political parties, boards, or commissions that would need 9 to be reevaluated if you're nominated and elected? 10 MS. WILLIAMS: 11 MR. FIFFICK: No. Do you belong to any 12 organizations that discriminate based on race, religion, 13 or gender? 14 MS. WILLIAMS: 15 MR. FIFFICK: 16 No. What in your opinion is the appropriate demeanor for a Commissioner? 17 MS. WILLIAMS: From the judicial code, someone 18 who should 24/7 operate their life, as well as their 19 work, in a way that's objective and fair. 20 concerned about upholding the integrity of the judicial 21 process. 22 activity. 23 24 25 They should be They should not be involved in political MR. FIFFICK: Do you feel there's ever a role for sternness or anger on the part of a Commissioner? MS. WILLIAMS: Anger, no. Sternness, perhaps. www.compuscriptsinc.com 2/11/2013 53 1 Certainly being very clear about where a limit is reached 2 or what the process is. 3 MR. FIFFICK: Could you please describe for us 4 briefly the statutorily stated purpose and operation of 5 the Base Load Review Act of 2007. 6 MS. WILLIAMS: It's my understanding that the 7 Base Load Review Act came into being so that the utility 8 companies could charge for items that were capital 9 investments that they were beginning to make and that 10 they take those plans for capital investments and 11 identify what they are in the commission, evaluate those 12 thoroughly, and then they're allowed to let the 13 ratepayers begin to pay for that capital investment. 14 MR. FIFFICK: Thank you. Could you please 15 explain the difference between a base load plant and a 16 peaking plant. 17 MS. WILLIAMS: 18 that generally runs continuously. They tend to be 19 nuclear or coal in a power base. They provide the 20 coverage for the energy needs for a community that meets 21 on a regular basis. 22 A base load plant is the one A peaking plant comes into operation for 23 extreme peaks and extreme needs and is not as cheap to 24 operate, but it can be brought into use more quickly than 25 a base load plant can be. www.compuscriptsinc.com 2/11/2013 54 1 2 MR. FIFFICK: Thank you. Have you sought or received the pledge of any legislator prior to this date? 3 MS. WILLIAMS: 4 MR. FIFFICK: I have not. Have you sought or been offered a 5 conditional pledge of support by any legislator pending 6 the outcome of your screening? 7 MS. WILLIAMS: 8 MR. FIFFICK: 9 I have not. Have you asked any third-parties to contact members of the General Assembly on your behalf 10 before the final and formal screening report has been 11 released? 12 MS. WILLIAMS: 13 MR. FIFFICK: I have not. Are you aware of any friends or 14 colleagues contacting members of the General Assembly on 15 your behalf? 16 MS. WILLIAMS: 17 MR. FIFFICK: I'm not. Are you familiar with the 48-Hour 18 Rule which prohibits a candidate from seeking pledges for 19 48 hours after the report has been submitted to the 20 General Assembly? 21 MS. WILLIAMS: 22 MR. FIFFICK: 23 I am. Do you plan to serve a full term if elected? 24 MS. WILLIAMS: 25 MR. FIFFICK: Absolutely. Mr. Chairman, I have no further www.compuscriptsinc.com 2/11/2013 55 1 questions. 2 SENATOR HUTTO: 3 REPRESENTATIVE SANDIFER: 4 Mr. Chairman. 5 with us. 6 Any member have any questions? Thank you, Ms. Williams, thank you for being here I ask your indulgence for a few minutes. Would you please describe for us what you see 7 as the relationship between the Public Service Commission 8 and the Office of Regulatory Service. 9 MS. WILLIAMS: The Public Service Commission is 10 more of a judicial function, and the Office of Regulatory 11 Service is both a regulatory agency that examines, that 12 researches, and that audits the utilities. 13 Regulatory Service would have contacts regularly with the 14 utilities, where the Public Service Commission would only 15 relate to the utilities either at a hearing or perhaps at 16 an ex parte approved commission. 17 REPRESENTATIVE SANDIFER: The Office of Are you familiar -- 18 and I'm dealing with electric right now. 19 familiar with the term obligation to serve? 20 MS. WILLIAMS: Yes. Are you I believe that it relates 21 to -- I'm more prepared for that question as it relates 22 to telecommunications, but I think it has to do with a 23 need for people to have access throughout the state and 24 to look at service areas and to identify. 25 REPRESENTATIVE SANDIFER: Okay. www.compuscriptsinc.com And 2/11/2013 56 1 understanding what you've just said, is that a 2 compensable part of their rate? 3 MS. WILLIAMS: 4 REPRESENTATIVE SANDIFER: 5 Base Load Review Act for a moment. 6 correctly, tell me if I'm wrong, you said that they would 7 be able to recover their capital investment of a period 8 under which construction is going on. 9 MS. WILLIAMS: 10 I would think it is. Let's talk about the If I understood you Right. REPRESENTATIVE SANDIFER: Well, I'll tell you 11 that's not correct. And there's a huge difference 12 between capital investment and a cost of capital, if you 13 will. 14 MS. WILLIAMS: Okay. Okay. 15 REPRESENTATIVE SANDIFER: But let's carry that 16 a step further. 17 of capital are prudently incurred on an annual basis? 18 How do we determine whether those costs MS. WILLIAMS: It's my understanding that there 19 are accounting records that are presented to the Office 20 of Regulatory Service and that the rate can change 21 depending on how the construction is going. 22 REPRESENTATIVE SANDIFER: If I buy into what 23 you've just said, that it's based on accounting, who 24 provides the accounting? 25 MS. WILLIAMS: The accounting comes from the www.compuscriptsinc.com 2/11/2013 57 1 utility, but it's reviewed by the Office of Regulatory 2 Service. 3 4 REPRESENTATIVE SANDIFER: I think they're housed there, too. 5 MS. WILLIAMS: Okay. 6 REPRESENTATIVE SANDIFER: And you were talking 7 about the quality and green energy and so forth. 8 of the elements in dealing with energy provision, is 9 there a place in your deliberations as a commissioner, 10 whether or not a utility is profitable? 11 12 Is one MS. WILLIAMS: Absolutely. It wouldn't be sustainable, if it wasn't profitable. 13 REPRESENTATIVE SANDIFER: Would you vote for 14 something that caused that utility possibly to operate at 15 a negative, in a loss situation? 16 MS. WILLIAMS: Not in a simple kind of way, but 17 my understanding is that the utilities have agreed on 18 profit margins that they can anticipate. 19 saying, would I be supportive of narrowing that profit 20 margin, perhaps. 21 situation. 22 23 But not to any kind of negative REPRESENTATIVE SANDIFER: Thank you very much. Thank you Mr. Chairman. 24 25 So if you're SENATOR HUTTO: questions? Any other members have I noticed that you served on organizations, www.compuscriptsinc.com 2/11/2013 58 1 or things that you've worked on have reference to the 2 title green. 3 South Carolina? 4 Are you an advocate of more green energy in MS. WILLIAMS: I do find it very promising what 5 I've heard about offshore wind, and that's a resource 6 that's so close to our shore, as well as the strength of 7 the wind, and the fact that it's not in such deep waters. 8 9 I know that we have a long way to go in terms of the technology and the transmitting, but that's one 10 example that I'm very hopeful for. 11 that it's an economic driver within the state. 12 SENATOR HUTTO: As well as the fact If no one has any questions, 13 we're going to ask you to stay and everyone else to 14 leave. 15 We're going into Executive Session again. 16 17 18 We'll be back with you all after this shuffle. (The Committee went into Executive Session from 11:15 a.m. to 11:20 a.m.) SENATOR HUTTO: Okay. We're out of Executive 19 Session, but we're going back into Executive Session to 20 talk about the District 1 candidates. 21 22 23 (The Committee went into Executive Session from 11:20 a.m. to 11:40 a.m.) SENATOR HUTTO: All right. We're moving to the 24 Third Congressional District, and our first candidate is 25 Nancy Campbell. www.compuscriptsinc.com 2/11/2013 59 1 2 3 (Nancy Sherer Campbell was duly sworn, after which testimony commenced at 11:40 a.m.) MR. FIFFICK: Good morning, Ms. Campbell. I'm 4 going to briefly summarize your educational background 5 and experience for purposes of getting it on the record. 6 Ms. Campbell obtained a bachelor of arts from 7 Erskine College in 1986 and a master of business 8 administration from Georgia State University in 1991. 9 She was a programmer analyst from 1986 to 1991, 10 first with Electronic Data Systems and then with Dun and 11 Bradstreet Software. 12 MCI as a manager, systems analyst, and programmer 13 analyst, overseeing commercial billing processes for the 14 information technology organization. 15 involved working with Federal Communications Commission 16 and the State Public Service Commission. 17 From 1991 to 2003, she worked with Those positions In 2004, Ms. Campbell took a job with Cass 18 Information Systems handling expense management services 19 for large companies, a job she kept until 2009. 20 2004, Ms. Campbell began serving as a financial officer 21 for Advantage Family Medicine and Urgent Care, a job she 22 currently still holds. 23 Also in Ms. Campbell, other than changes that you've 24 submitted, do you have any changes that you'd like to 25 make to your Personal Date Questionnaire submitted with www.compuscriptsinc.com 2/11/2013 60 1 your application? 2 MS. CAMPBELL: 3 MR. FIFFICK: No. I do not. I would request Ms. Campbell's 4 Personal Data Questionnaire be entered into the record 5 with any confidential information redacted. 6 7 8 9 (EXH. 4, Personal Data Questionnaire of Nancy Sherer Campbell, marked for identification.) MR. FIFFICK: As part of our background investigation of the candidate, we obtained a credit 10 check, driver's license, and SLED 11 record, I would like to state that the credit check 12 revealed no negative results for Ms. Campbell that should 13 be brought to the attention of the Subcommittee. 14 15 16 check. For the Before we begin questioning, do you have a brief statement that you would like to make? MS. CAMPBELL: Thank you. Good morning. I 17 would like to thank the members of the Review Committee 18 for their service to South Carolina and this opportunity 19 to speak to you today. 20 There are two reasons for my interest in the 21 Public Service Commission. 22 and experiences as a match with the requirements. 23 First, I see my skill sets Second, I see the Commissioner's task of 24 balancing the needs of South Carolina's ratepayers and 25 utility providers to ensure that lights come on at any www.compuscriptsinc.com 2/11/2013 61 1 time of the day, clean water comes out of the tap, phones 2 have dial tone, safe taxis pull up to the curb, and other 3 services that we often take for granted as a challenging 4 opportunity that would help me make a difference for my 5 neighbors in my beloved home state. 6 In regards to my experience, I worked for 17 7 years in telecommunications. Twelve years with a long 8 distance service provider and five years in telecom 9 expense management. Let me touch on the elements that I 10 think would be of interest to you in regards to the work 11 of the Public Service Commission. 12 I worked for 12 years at MCI, Incorporated. 13 While at MCI, I was a manager of an information 14 technology team that supported commercial billing for 15 long distance promotions. 16 across MCI's commercial invoicing applications to 17 determine if customers qualified for discounts. 18 customer qualified, we calculated the discount and passed 19 it along for display on the next bill. 20 Our purpose was to gather data If the In the late 1990s, my team was involved in 21 developing software for MCI to support the federal 22 Universal Service Fund and various state Universal 23 Service Fund fees. 24 usage, we were able to calculate the Universal Service 25 fees using the customers' total MCI usage. Since our tool collected overall www.compuscriptsinc.com We passed the 2/11/2013 62 1 fees to the appropriate billing system for the next 2 invoice and informed accounts payable of the funds that 3 MCI billed on behalf of government agencies. 4 In addition to being involved with collecting 5 fees to go into Universal Service Funds, we were also 6 involved with distributing credits out of the fund. 7 schools and libraries added lines for Internet usage or 8 other telecom services and products, our application 9 awarded them credit. When We requested monies from the 10 federal or state Universal Service Fund to reimburse MCI 11 for the credits. 12 I also worked for Cass Information Systems for 13 five years in the telecom expense management industry. 14 Cass processes, pays, and audits utility invoices for 15 Fortune 1,000 customers. 16 seven to 12 percent of charges that appear on telecom 17 invoices are actually in error. 18 actual rates on invoices with tariff rates filed with the 19 FCC and state PSCs. 20 Industry analysts estimate that Cass' auditors compare If necessary, Cass files complaints on behalf 21 of customers with the PSC. 22 writing proposals, and explaining services to prospective 23 customers. 24 25 My function was in marketing, For the past nine years, I have worked in a part time financial role for a small business in the www.compuscriptsinc.com 2/11/2013 63 1 healthcare industry. 2 functions, prepare financial statements, file tax 3 returns, and perform business services as needed. 4 I provide accounts payable Many of my efforts in the past five years have 5 been focused in assisting nonprofit organizations in my 6 community. 7 Energy Policy Report highlighted that more than half of 8 our state's residences fall into severe or moderate 9 ranges of illiteracy. One of the findings of your Committee's 2009 I can confirm your findings with 10 stories of my own that I have witnessed through my 11 experiences with Greenville County's United Way, the 12 Community Chest of Honea Path, and volunteer efforts with 13 Watkins Community Center and local schools in my area. 14 My personal educational background includes a 15 bachelor's degree in mathematics from Erskine College 16 with an emphasis in computer science. 17 arts academic community, I gained written and verbal 18 communication skills both in the classroom and in 19 leadership opportunities as yearbook editor and student 20 government president. 21 assets in each of my professional positions. 22 In this liberal These skills have been valuable I earned a master of business administration 23 from Georgia State University. My emphasis was in 24 management, and my studies included business, law, 25 accounting, and economics. Many concepts from my www.compuscriptsinc.com 2/11/2013 64 1 graduate courses have come to mind as I delve into the 2 issues facing the Public Service Commission. 3 I feel that my experiences would allow me to 4 offer valuable insights to the Commission. 5 the private sector has given me an appreciation of the 6 Commission's objective to ensure that ratepayers are not 7 overly burdened by utility providers who prevail in a 8 market of limited competition. 9 also given me an appreciation of the everything relates 10 My work in My nonprofit work has to everything else concept. 11 Yes, we need to motivate utility providers to 12 generate energy in a cleaner fashion and to motivate 13 ratepayers to engage in practices of conservation and 14 energy efficiency. 15 upon educated, informed citizens at all levels of 16 literacy, socioeconomic backgrounds, population 17 densities, and relative distances to utility providers. Conservation and efficiency depend 18 Education is more likely to flourish and 19 radiate when reliable power, water, communication, 20 transportation, et cetera, for those who desire to learn 21 is affordable and readily available from well-regulated 22 utility providers. 23 else. 24 25 Everything relates to everything Our Public Service Commissioners have an important role in balancing everything related to the www.compuscriptsinc.com 2/11/2013 65 1 needs of South Carolina's ratepayers and our utility 2 providers. 3 difference for my neighbors. 4 5 6 7 8 9 It's a challenge I see as a way to make a Thank you for your time. remainder of the conversation. MR. FIFFICK: Thank you. Please state your full name and address for the record. MS. CAMPBELL: Nancy Sherer Campbell. 207 West Greer Street, Honea Path, South Carolina, 29654. 10 MR. FIFFICK: 11 MS. CAMPBELL: 12 MR. FIFFICK: 13 I look forward to the Are you a registered voter? Yes. In what congressional district are you registered to vote? 14 MS. CAMPBELL: 15 MR. FIFFICK: The third. In addition to what you may have 16 addressed in your opening statement, could you please 17 tell us why you're interested in serving on the Public 18 Service Commission. 19 MS. CAMPBELL: I see that my background and 20 experiences are a match for the responsibility of a 21 Public Service Commissioner. 22 that the Public Service Commission has to balance, the 23 balance between the ratepayer and the utility provider as 24 a challenge. 25 MR. FIFFICK: I also see opportunities Have you attended any hearings of www.compuscriptsinc.com 2/11/2013 66 1 the Commission? 2 MS. CAMPBELL: 3 MR. FIFFICK: 4 MS. CAMPBELL: 6 MR. FIFFICK: Yes. Would you care to comment on either of those? 8 9 Have you are read any Commission decisions? 5 7 Yes. MS. CAMPBELL: I attended a recent case when a water situation -- really I was just observing the 10 temperament of the Commissioners, and it was kind of a 11 tense environment because everyone was really upset about 12 the water rates that were being increased. 13 lighthearted moment in the case in which one of the 14 persons who was testifying told about a situation where 15 the water company had done an unscheduled test on 16 whatever release line, and his mother-in-law happened to 17 be in the house, in the toilet, and the whole place burst 18 into laughter. 19 To their credit, none of the Commissioners 20 laughed. 21 maintained dignity in the courtroom. 22 23 24 25 There was one There were a few smiles, but they all MR. FIFFICK: How would you expect to get up to speed on the issues confronting the Commission? MS. CAMPBELL: I would go through all the open dockets in the docket management system. www.compuscriptsinc.com I would review 2/11/2013 67 1 those cases. 2 that are available to learn information about the issues. 3 I would spend time with Ms. Jocelyn Boyd, the chief 4 administrator for the Public Service Commission, and get 5 her to help me prioritize the most important things to 6 look at, and then take my notes and spend some time with 7 the Commissioners and ask for their guidance. 8 9 I would also spend time on various websites MR. FIFFICK: In addition to what you've told us in your opening statement, could you please describe 10 any experience or expertise you have in the following 11 areas, including the time you've been engaged in those 12 issues: 13 consumer protection and advocacy issues, water and waste 14 water issues, finance, economics, statistics, accounting, 15 engineering, or law. Energy issues, telecommunication issues, 16 MS. CAMPBELL: I've been involved in 17 telecommunications and accounting. 18 my opening statement. 19 I'd be glad to. I addressed those in If you'd like me to repeat that, 20 MR. FIFFICK: No. Thank you. 21 Are you familiar with the 2006 Advisory Opinion 22 issued by the Review Committee dealing with attendance at 23 legislative receptions? 24 MS. CAMPBELL: 25 MR. FIFFICK: Yes. Are you familiar with the January www.compuscriptsinc.com 2/11/2013 68 1 15th meeting of this year, which clarified the 2006 2 Advisory Opinion? 3 MS. CAMPBELL: 4 MR. FIFFICK: 5 Yes. Have you attended any legislative receptions since receiving the Advisory Opinion? 6 MS. CAMPBELL: 7 MR. FIFFICK: No. I have not. Ms. Campbell, assume that you 8 were serving on the Commission and you were approached by 9 someone wanting to discuss a matter that is or may become 10 an issue before the Commission. 11 situation? 12 MS. CAMPBELL: How would you handle the I would politely refer them to 13 Ms. Jocelyn Boyd and let them know that it would not be 14 in their best interest for me to discuss the case. 15 MR. FIFFICK: Are you aware that the 16 Commissioners are subject to the Judicial Code of 17 Conduct, as well as state laws? 18 MS. CAMPBELL: 19 MR. FIFFICK: Absolutely. Are you affiliated with any 20 political parties, boards, or commissions that would need 21 to be reevaluated, if you were nominated and elected? 22 MS. CAMPBELL: 23 MR. FIFFICK: 24 25 No. Do you belong to organizations that discriminate based on race, religion, or gender? MS. CAMPBELL: No. www.compuscriptsinc.com 2/11/2013 69 1 MR. FIFFICK: You discussed this in context of 2 your attending the hearings. 3 appropriate demeanor for a Commissioner is? 4 MS. CAMPBELL: What do you believe the I believe a Commissioner needs 5 to maintain respect and treat each person that appears in 6 a hearing with equal respect, and they also need to 7 maintain decorum at all times. 8 listen attentively and respond respectfully. 9 MR. FIFFICK: And also, they need to Do you believe that that applies 10 only while the Commissioner is on the bench or seven days 11 a week? 12 MS. CAMPBELL: 13 MR. FIFFICK: 14 Seven/24. Do you feel there's ever a role for sternness or anger with Commissioners? 15 MS. CAMPBELL: 16 MR. FIFFICK: Maybe sternness, but not anger. Could you please describe the 17 statutorily stated purpose and operation of the Base Load 18 Review Act of 2007. 19 MS. CAMPBELL: The Base Load Review Act had two 20 purposes. One is to allow utility providers to gain 21 additional revenues from ratepayers for the investment in 22 base load power plants. 23 to be able to reimburse ratepayers, if it was determined 24 that the investment that the utility companies paid was 25 not prudent, and the rates needed to be reduced. The other aspect of the law was www.compuscriptsinc.com 2/11/2013 70 1 MR. FIFFICK: Could you expand upon -- you 2 mentioned earlier about being approached by someone, and 3 just give me the general rule on ex parte communication. 4 MS. CAMPBELL: In the event that a Commissioner 5 is exposed or has an opportunity to receive testimony 6 from one party, even if it's an accident then they need 7 to report the event that happened and share that with the 8 other Commissioners, so they're all aware of the same 9 information, and they need to give the same opportunity 10 to the other parties. 11 MR. FIFFICK: Thank you. A few housekeeping 12 questions for you. Have you sought or the received the 13 pledge of any legislature prior to this date? 14 MS. CAMPBELL: 15 MR. FIFFICK: No. Have you sought or been offered a 16 conditional pledge of support by any legislator pending 17 the outcome of your screening? 18 MS. CAMPBELL: 19 MR. FIFFICK: No. Have you asked any third-parties 20 to contact members of the General Assembly on your behalf 21 before the final and formal screening report has been 22 released? 23 MS. CAMPBELL: 24 MR. FIFFICK: 25 No. Are you aware of any friends or colleagues contacting members of the General Assembly on www.compuscriptsinc.com 2/11/2013 71 1 your behalf? 2 MS. CAMPBELL: 3 MR. FIFFICK: No. Are you familiar with the 48-hour 4 Rule which prohibits a candidate from seeking pledges for 5 48 hours after the report has been submitted to the 6 General Assembly? 7 MS. CAMPBELL: 8 MR. FIFFICK: 9 If you are elected, do you plan to serve a full term? 10 MS. CAMPBELL: 11 MR. FIFFICK: 12 Does any member have any questions? REPRESENTATIVE SANDIFER: Thank you, Mr. Chairman. 17 Thank you. 18 your candor with us. 19 my mind. 20 Mr. Chairman, I have no further SENATOR HUTTO: 15 16 Yes. questions. 13 14 Yes. We appreciate you being here and Two or three questions that come to You're a mother of three underage children. 21 How will their lives be impacted if you were elected to 22 the Commission and required to attend hearings, sometimes 23 three or four days a week in Columbia or elsewhere, as 24 well as going to conferences all over the United States? 25 MS. CAMPBELL: I am blessed with a very www.compuscriptsinc.com 2/11/2013 72 1 supportive set of parents and a very supportive set of 2 in-laws who really enjoy being with their grandchildren. 3 They relish getting more involved. 4 REPRESENTATIVE SANDIFER: I'm going back to my 5 own experience when I started in politics. 6 discussed this with your children? 7 MS. CAMPBELL: 8 REPRESENTATIVE SANDIFER: 9 Have you Yes. Are they endorsing what you're doing? 10 MS. CAMPBELL: Yes. I haven't described all 11 the nature of the work, but the concept of going to 12 Columbia today, they knew where I was. 13 delighted. 14 REPRESENTATIVE SANDIFER: Yes. They're With the Base Load 15 Review Act -- and you touched on it a moment ago. 16 of all, what charges may the utility seek to recover? 17 MS. CAMPBELL: First The investment in new capital, 18 especially for a nuclear plant, if they're using base 19 load money to invest in new operating facilities that 20 would offer base load services. 21 REPRESENTATIVE SANDIFER: 22 brick and mortar charges? 23 about. 24 25 MS. CAMPBELL: Can they recover the Tell me what you're talking That's my understanding. For construction of the new facility or anything that's an www.compuscriptsinc.com 2/11/2013 73 1 investment. 2 3 REPRESENTATIVE SANDIFER: That's what I thought you were saying, and that is actually not correct. 4 If you go to that, and you talk about the fact 5 that there can be those charges that are not or are 6 prudently incurred, how do we make that determination? 7 MS. CAMPBELL: That's the role of the Public 8 Service Commission. 9 if the rate should be adjusted. 10 11 They would hear the case and decide REPRESENTATIVE SANDIFER: Is there any ongoing opportunity to ensure that that's done correctly? 12 MS. CAMPBELL: There's reports that the utility 13 provider would need to work with the Review Committee and 14 provide along the way. 15 REPRESENTATIVE SANDIFER: 16 MS. CAMPBELL: 17 REPRESENTATIVE SANDIFER: 18 MS. CAMPBELL: Are there audits? Yes. Who does them? Well, there's the Office of 19 Regulatory Staff that would do the investigative kind of 20 work. 21 22 23 24 25 REPRESENTATIVE SANDIFER: But are there auditors assigned to those specific instances? MS. CAMPBELL: That would be the Office of Regulatory Staff's role. REPRESENTATIVE SANDIFER: Again, those auditors www.compuscriptsinc.com 2/11/2013 74 1 are provided by the utility to the ORS, and they're 2 housed there. 3 And the last one, because you dealt with it a 4 moment ago, that's the Universal Service Fund. 5 outlived its usefulness? 6 MS. CAMPBELL: Has it There are still people -- let's 7 see. In remote areas, the cellular world has changed. 8 Obviously, it's changed the market because a lot of 9 people have cell phone service that didn't have that 10 before, but there are still some barriers that need to be 11 addressed so that everybody has equal access. 12 REPRESENTATIVE SANDIFER: 13 Is that the rationale for the USF? 14 MS. CAMPBELL: The Universal Services Fund fee 15 is set up so that everybody can have universal service, 16 regardless of where they live. 17 that need to add Internet service, they were given money 18 so that everyone has Internet system, if that's where 19 you're going. 20 21 I'm not sure. REPRESENTATIVE SANDIFER: That's not. I'm talking about the South Carolina Universal Service Fund. 22 MS. CAMPBELL: 23 today. 24 Service Fund on it. 25 The schools and libraries It's still collected on my bill I still review my bill, and I have Universal REPRESENTATIVE SANDIFER: I guess where I'm www.compuscriptsinc.com 2/11/2013 75 1 going is, do we need to revisit, as a legislature, that 2 piece of legislation to determine whether or not it is 3 still relevant in today's environment? 4 5 MS. CAMPBELL: Assembly question, not a Public Service question. 6 7 I think that's a General REPRESENTATIVE SANDIFER: opinion. 8 MS. CAMPBELL: 9 REPRESENTATIVE SANDIFER: 10 11 I'm asking your For me -It's not a trick question. MS. CAMPBELL: I'm wanting to say it can go 12 either way, but there's lots of investments that are 13 still out there. 14 15 REPRESENTATIVE SANDIFER: Are you familiar with the obligation to serve? 16 MS. CAMPBELL: Yes. 17 REPRESENTATIVE SANDIFER: And would you agree 18 with me there are some rural areas that would be so cost 19 prohibitive that a person might not be able to afford the 20 basic phone on the wall? 21 MS. CAMPBELL: 22 REPRESENTATIVE SANDIFER: 23 24 25 Yes. Thank you. Thank you, Mr. Chairman. SENATOR HUTTO: have any questions? Thank you. Does anyone else Let me follow up with that. www.compuscriptsinc.com 2/11/2013 76 1 Do you think that the Universal Service Fund 2 should be collected on all phone bills including cellular 3 phone bills? 4 MS. CAMPBELL: Cellular phone bills are 5 intrastate because you can't tie a cellular phone bill to 6 a particular location, so that's why the local commission 7 doesn't regulate the cellular bills today. 8 9 Should the Universal Service fee be collected on cellular bills? A lot of people use their cellular 10 phone instead of having a phone connected on the wall 11 today. 12 SENATOR HUTTO: It's a shrinking market of 13 those paying into the fund because a lot of people, their 14 cell phone is their house phone. 15 16 17 18 19 If I use the term green energy, what does that mean to you? MS. CAMPBELL: It would be clean energy or energy generated without burning fossil fuels. SENATOR HUTTO: What role, if any, should the 20 Public Service Commission have in encouraging energy 21 produced by green energy? 22 MS. CAMPBELL: The danger that greenhouse gases 23 can do to the upper layers of the atmosphere has impacted 24 climate changes, so the opportunities that the Public 25 Service Commission has is to give incentives to utility www.compuscriptsinc.com 2/11/2013 77 1 providers to increase their technology investment in 2 things that they can do to operate these clean, green 3 energy sources rather than burning fossil fuel. 4 5 SENATOR HUTTO: Do you know what net metering MS. CAMPBELL: Net metering is a concept that is? 6 7 you might have a way of putting energy back onto the 8 grid, instead of just using the energy from your house. 9 It goes back into the pool at your house or maybe you 10 have solar panels on your house that put energy in at 11 certain times. 12 difference between energy that you use versus energy that 13 you add to the grid. So net metering would be the net 14 SENATOR HUTTO: 15 REPRESENTATIVE FORRESTER: 16 the solar sales. 17 sales? 18 19 22 Just to follow up on What do you think about third-party MS. CAMPBELL: Sales or cells that sit on top of your house? 20 21 Anybody else? REPRESENTATIVE FORRESTER: Selling to someone else. MS. CAMPBELL: I think that's a way to expand 23 the solar market. We have to have incentives to get 24 solar going. 25 of solar panels on people's houses yet. It's a great concept, but there's not a lot www.compuscriptsinc.com 2/11/2013 78 1 REPRESENTATIVE FORRESTER: 2 that those third-parties become an operator? 3 MS. CAMPBELL: They could be kind of a coop of 4 people who had solar services. 5 electric companies. 6 I'm -- 7 Would you propose Like you have coops for Tell me some more. REPRESENTATIVE FORRESTER: you would propose to do the cost. 9 stranded cost, obligation to serve. I'm just curious how 8 10 MS. CAMPBELL: We've talked about Are you talking about the 11 investment in solar panels? 12 for their investment in solar? 13 I'm not sure if Should someone be reimbursed REPRESENTATIVE FORRESTER: No. If the 14 installer wants to sell to an individual, not back to the 15 grid. What are your thoughts on that? 16 MS. CAMPBELL: The homeowner could be investing 17 as well, if they invest in their house, knowing that they 18 would save money over time. 19 20 I'm still not understanding what you're asking I guess. 21 22 23 REPRESENTATIVE FORRESTER: That's okay. Thank you. REPRESENTATIVE SANDIFER: Couple follow up 24 questions on the fossil fuels and green energy that you 25 discussed a few minutes ago. www.compuscriptsinc.com 2/11/2013 79 1 Are you suggesting that the PSC establish a 2 policy on those issues? 3 MS. CAMPBELL: No, sir. They follow the state 4 regulations that are set by the General Assembly, but 5 they enforce what the General Assembly says. 6 REPRESENTATIVE SANDIFER: I misunderstood what 7 you said. 8 clarification. 9 moment, and we understand that there are those times when 10 a solar cell, whatever it might be, wind farm, it doesn't 11 matter, on the property owner's property, generates 12 excess power. 13 example, at what price should they be selling it? 14 I wanted to make sure that I had 15 When they sell it back to an IOU, for MS. CAMPBELL: Depends on what time of the day they were using it as well. 16 17 Now, let's go to net metering for a REPRESENTATIVE SANDIFER: price that they would be buying power from the utility? 18 MS. CAMPBELL: 19 there's a lot of factors involved. 20 REPRESENTATIVE SANDIFER: 21 24 25 That would be the hope, but Who is paying for the transmission and distribution systems? 22 23 Is it at the same MS. CAMPBELL: But they're using it at their own house? REPRESENTATIVE SANDIFER: But if they're selling it back, the IOU, the coop, whomever is putting www.compuscriptsinc.com 2/11/2013 80 1 that line to that house, they have an investment there. 2 Are they allowed to recover on the investment 3 infrastructure? 4 MS. CAMPBELL: That's the kind of thing to work 5 out with the General Assembly, and the Public Service 6 Commission would follow whatever they say. 7 REPRESENTATIVE SANDIFER: 8 SENATOR HUTTO: Okay. Thank you. We're going to ask you to stay 9 here for a minute and everybody else to leave the room. 10 This is really part of the DHEC initiative to 11 12 13 get people to exercise more. (The Committee went into Executive Session from 12:05 p.m. to 12:08 p.m.) 14 SENATOR HUTTO: Okay. Back in public session. 15 (Randy Mitchell was duly sworn, after which 16 testimony commenced at 12:09 p.m.) 17 MS. ANDERSON: I want to give a general summary 18 of your background. 19 Methodist College and obtained a bachelor of art degree 20 from Lander University in 1972. 21 Mr. Mitchell attended Spartanburg Since 1998, he has served as a Public Service 22 Commissioner. For ten years prior, he was a Saluda 23 County Probate Judge. 24 Saluda County Council. 25 Mitchell Farms and Mitchell Reynolds Business He's also been a member of the He is the current owner of www.compuscriptsinc.com 2/11/2013 81 1 Enterprises. Mr. Mitchell is a member of the National 2 Association of Regulatory Utilities Commissioners, The 3 Southeastern Association of Regulatory Utilities 4 Commissioners, The Federal State Joint Board on Universal 5 Service, President of the Hollywood Ruritan Club. 6 also a member of the Saluda County Cattle Club and 7 Hickory Grove Advent Christian Church. He's 8 I would request that Mr. Mitchell's Personal 9 Data Questionnaire be entered into the record with any 10 11 12 13 confidential information being redacted. (EXH. 5, Personal Data Questionnaire of Randy Mitchell, marked for identification.) MS. ANDERSON: Mr. Mitchell, since you've given 14 us your Personal Data Questionnaire, are there any 15 changes that you'd like to make? 16 MR. MITCHELL: 17 18 19 20 I don't think so. Everything looks good. MS. ANDERSON: Is there a brief statement that you'd like to make? MR. MITCHELL: I just want to first say thank 21 you to this extraordinary group for allowing me to serve 22 these last couple years, and thank you to the General 23 Assembly for allowing me the opportunity to serve. 24 25 I've been on the National Telecom Committee since I've been a member of the Public Service www.compuscriptsinc.com 2/11/2013 82 1 Commission, and I'm quite proud of the record there. 2 presently serve on the joint board, which is as high as 3 you can go in telecom, where only four members of the 4 State Regulatory Association throughout the United States 5 serve on a board with several FCC Commissioners 6 presently, and now we are in the process of debating the 7 Universal Service Fund as it is transforming into the 8 Connect America Fund throughout the country. 9 proud to have had the opportunity to serve on that. 10 I I'm so Before that, for two years, I served on the 11 Universal Service Board, which was an eye-opening 12 experience. 13 the regulatory agency throughout the United States to 14 serve on this board. 15 they do is oversee the FCC funding, which the FCC funding 16 is $17 billion a year, and you are a director over 17 accountants and auditors who oversee that $17 billion, 18 and who, in turn, goes to states for rural healthcare, 19 for the state libraries, and for the high and low cost of 20 the Universal Service Fund. 21 I was one of 17 members, the only one from I was one of 17 members, and what So it was a very eye-opening experience to serve 22 on there, and the one opportunity, I think I was there 23 two years, and there was a pilot program in South 24 Carolina at the Medical University of Charleston that was 25 the pilot program in the country that particular year. www.compuscriptsinc.com 2/11/2013 83 1 $7.9 billion went to the university, and that 2 was to help doctors in rural areas that might not have 3 the facilities to attend to people like others in other 4 areas. 5 flashed to the university, as far as a diagnosis of what 6 that person might have, and we attributed that to saving 7 many lives. 8 9 10 Immediately when they came there, everything was It was a $7.9 billion project. Only thing I would add is that I did serve 11 years as probate judge in Saluda County. Thank you very much for the opportunity. 11 MS. ANDERSON: As part of our background 12 investigation of Mr. Mitchell, we obtained a credit 13 check, driver's license, and SLED check. 14 Staff has questions of a confidential or 15 personal nature, and we request that they be taken up in 16 Executive Session at the appropriate time. 17 18 Please state your full name and home address for the record. 19 20 MR. MITCHELL: Randy Mitchell. I reside at 2031 Hollywood Road, Saluda, South Carolina, 29138. 21 MS. ANDERSON: Are you a registered voter? 22 MR. MITCHELL: I am a registered voter for many MS. ANDERSON: In which congressional district 23 24 25 years. are you registered to vote? www.compuscriptsinc.com 2/11/2013 84 1 MR. MITCHELL: 2 Congressional District. 3 MS. ANDERSON: 4 I'm registered in the Third Please describe an ordinary workday for you. 5 MR. MITCHELL: Generally, Tuesday is a day when 6 we gather with no more than two other commissioners, 7 which we can only have three legally under Act 175. 8 three of us gather to have the agenda presented to us 9 that we usually have on Wednesday, as far as items that So 10 we'll be voting on for that week. 11 important meeting because other activities that are down 12 the road, as far as something that we might have in six 13 months. 14 that Wednesday session, we talk about things that might 15 be coming down the road of what we need to be studying 16 and researching as far as some of these major decisions 17 that we have, and we have certainly made some very major 18 decisions for this state in the last few months. 19 Also, it's a very When we finish discussing the activities for One being, of course, the nuclear facility that 20 we approved, $10 million project in Jenkinsville. 21 take that very seriously at the Commission, and we 22 certainly thank, once again, the General Assembly for 23 their wisdom in providing us with such good features as 24 the Base Load Review Act to do those type of things. 25 MS. ANDERSON: So we Please describe your experience www.compuscriptsinc.com 2/11/2013 85 1 or expertise in any of the following areas, and include 2 the time you've been engaged in the issues: 3 telecommunications, consumer protection advocacy, water 4 and waste water, finance, economics, statistics, 5 accounting, engineering, or law. 6 MR. MITCHELL: Energy, Well, I'll start with telecom. 7 That's been my love and joy. I live in a rural area, and 8 rural areas are very important to the State of South 9 Carolina. We're growing very fast, and you're not going 10 to have industry if you don't have the services there to 11 provide those companies when they come. 12 I think having the proper fiber in places is 13 essential, and I'm proud of the fact that I served on the 14 Telecom Committee, and I think if you check our record in 15 South Carolina, we probably have more under-served areas 16 that have been covered in last few years. 17 probably in a coverage rate right now of 95 to 96 percent 18 in areas, and that's unheard of, having as much rural 19 areas as we have in South Carolina. 20 on the National Telecom Committee has certainly helped in 21 that. 22 We're reaching I think my service Now, when we speak of other -- energy. I go to 23 any forums that I can go to while I'm at NARUC. 24 forums there, at the Commission, that have been very 25 helpful as far as keeping up with the energy matters, and www.compuscriptsinc.com We have 2/11/2013 86 1 they're so important because our state is growing, as you 2 know, by the wise leadership of the General Assembly and 3 groups like you all. 4 This state is growing by leaps and bounds, and 5 it's going to continue to grow if we can provide them 6 with good energy resources at a reasonable rate. 7 have also the debate of renewable energy now, and that's 8 very important. 9 farm. And we Also, in my introduction there, I also I farm on the side, and by the way, we were just 10 checking the statistics. Farming is the number one 11 industry in South Carolina, bringing in billions of 12 dollars to the state and over 200,000 jobs. 13 So it helps to have that voice also in energy 14 because it's very important to this large group that we 15 represent. 16 We have ex parte matters that can be brought, as far as 17 forums that can be presented to the commission during 18 various times where before we reached these issues, we 19 can sit and ask questions, and then we have all the 20 different parties there, including ORS and any other 21 interested parties. 22 I always try to keep aware of current issues. I have found that the briefings that are 23 provided in those different forums have been very helpful 24 to me over the years. 25 because in those briefings, you ask any question, and you Especially the last few years www.compuscriptsinc.com 2/11/2013 87 1 get a good answer. 2 so much to be proud of in South Carolina, and I think 3 this is all contributed to the work that's done by a lot 4 of good groups in South Carolina, and we hope that the 5 Public Service Commission has played a part of that. 6 7 MS. ANDERSON: How do you prepare for a MR. MITCHELL: First thing that I do is, we get hearing? 8 9 We just continue to grow, and we have the agenda as early as we can. Like I spoke of earlier, 10 when we have these forums on Tuesday, I try to find out 11 what will be happening four or five months from there, 12 particularly if we have an agenda that's not real heavy 13 that week. 14 request in, start studying any of the material that's 15 presented, direct testimony, the discovery, anything 16 pertaining to important matters that I'll see coming down 17 the road, as far as what we'll be taking up in hearings. 18 We talk about other things. I get the I think that's so important because it's 19 amazingly -- it amazes me how fast things change now. 20 They change fast in telecom, and they change just about 21 that fast in energy and other resources. 22 renewables is very important. 23 land, so I love the environment, and renewables are very 24 important, and we need to bring forth those renewables as 25 fast as we can. The debate with As I said, I've farmed the www.compuscriptsinc.com 2/11/2013 88 1 However, with the state of the economy, and the 2 way things are now, I wish we could have a larger 3 percentage of renewables, but you have to consider the 4 cost factor. 5 federal government operated the way our great state 6 government does and have an amendment to have a balanced 7 budget, but they don't. 8 9 That's the bottom line. We wish our We operate in South Carolina by trying to balance things, and when we go out and have night 10 hearings over nuclear -- and we had great testimony 11 presented to us. 12 time, but that was the best testimony I've seen in this 13 last nuclear decision we had to make. 14 night and hear those people come in and say, you know, I 15 live in a mobile home with a $400 light bill. 16 fixed income. 17 I've been on the Commission a long When we go out at I'm on a That gets to the heart and the core of 18 everybody there. 19 renewables and make that energy cleaner and healthier, 20 that's wonderful. 21 price. 22 ratepayer. 23 On the other side, if we could bring in The bottom line is balancing the Balancing the price and not overburdening the MS. ANDERSON: How long does it take you to 24 prepare for a typical hearing, electrical, 25 telecommunication, gas, water sewer? www.compuscriptsinc.com 2/11/2013 89 1 MR. MITCHELL: If it's a large hearing, it 2 takes weeks. 3 testimony, and then I try to get as many staff members 4 together. 5 we get those together, and I get them together myself, 6 personally, many, many times and start getting answers to 7 questions very early because you have an awful lot of 8 material to read, and we are blessed both with the ORS 9 and blessed with our staff. 10 I first start by reading over the If I have questions as I read the testimony, They have some of the best staff people around, 11 and they've been around a long time, and they present 12 good information to you. 13 I've found and then going back and reading old cases. 14 like to study old cases, especially the cases that the 15 Supreme Court smile on us about. 16 that we are very proud of, the fact that our waters have 17 been well received by the Supreme Court. 18 real confident on that. 19 It's meeting with all those people. 20 That's the best method that I That's another thing And we feel We have a great legal staff. I first start off personally meeting with the 21 advisers. The economic advisers, telecom, or the actual 22 financial people. 23 go along, I start meeting more with the legal team, and 24 we have those meetings every Tuesday. 25 missed one. That's the first thing. And then as I I don't think I've I could check back, but I don't think I've www.compuscriptsinc.com 2/11/2013 90 1 missed one. 2 3 Maybe one since this last four years. MS. ANDERSON: As a follow up question, what type of contact do you have with staff? 4 MR. MITCHELL: I think I have great contact 5 with staff, if I use them. 6 tired of seeing me come around so frequently. 7 we have computers that are so good that they are phones, 8 carry all the information that we need almost on our 9 telephones, and that's just been so wonderful to have 10 I think they probably get And then that type of information provided to us. 11 They get us answers when we ask questions, and 12 like I said, my favorite thing is to go back and read old 13 cases and see how the Commission was dealing with things 14 in the past, and see how we've changed. 15 get as much material as I can from other states, as far 16 as how they're handling particular companies that do 17 business in both states. 18 MS. ANDERSON: I also like to If you were approached by 19 someone wanting to discuss a matter that is or may become 20 an issue in a proceeding, how would you handle the 21 situation? 22 MR. MITCHELL: Certainly, I know all the ex 23 parte rules. If we have a case that's pending and is 24 going to appear before us, I know the rule is that you 25 cannot discuss it without only two other Commissioners in www.compuscriptsinc.com 2/11/2013 91 1 the room, much less discuss with a third-party or anyone 2 else. 3 was a problem at the Public Service Commission, but I 4 think it is a problem no more. 5 aware of the rules and what they can and what they can't 6 do. I try to be very careful on that. 7 MS. ANDERSON: Years ago, that All Commissioners are Are you familiar with the 2006 8 Advisory Opinion issued by the Review Committee dealing 9 with attendance at legislative receptions? 10 MR. MITCHELL: I am. 11 MS. ANDERSON: Have you attended any 12 legislative receptions since receiving the advisory 13 opinion? 14 MR. MITCHELL: I have not. 15 MS. ANDERSON: Are you familiar with PURC's 16 decision at its meeting on January 15th of this year, 17 which clarified the 2006 Advisory Opinion? 18 MR. MITCHELL: I understood that. 19 MS. ANDERSON: Have you attended any 20 legislative receptions or any legislative caucus 21 meetings, other than delegation meetings, on or after 22 January 15th? 23 MR. MITCHELL: I have not. 24 MS. ANDERSON: What is the appropriate demeanor 25 for a Commissioner? www.compuscriptsinc.com 2/11/2013 92 1 MR. MITCHELL: Well, the demeanor for a 2 Commissioner, if you're in session and you're holding a 3 hearing, I think the first thing always, the Golden rule 4 applies. 5 someone else just like you want to be treated, and you 6 have to be courteous and sometimes that gets -- I've 7 always found because I served in probate for 11 years, if 8 you get in the middle of people's estates, you learn to be 9 courteous, I can assure you, and you start dividing up 10 11 You want to be treated, you want to treat mom and pop's assets. So I had a good, hard lesson in that, over 11 12 years serving as probate judge. 13 think, when people leave that courtroom they need to feel 14 like, look, I haven't had an advantage, and they haven't 15 had an advantage. 16 like that's the kind of treatment they get in the Public 17 Service Commission because we work hard to do that. 18 And the main thing, I We were treated fairly. And I feel I served as chairman, vice chairman. I served 19 my second term as vice-chairman, and the people of this 20 state come first, and the people we regulate come first. 21 If you keep that in the back of your mind, you conduct 22 yourself pretty well. 23 24 25 MS. ANDERSON: Does the demeanor apply only while you're on the bench or does it apply 24/7? MR. MITCHELL: Definitely 24/7 because you set www.compuscriptsinc.com 2/11/2013 93 1 an example out there, and people have to get that feeling 2 that when they come to the Public Service Commission they 3 getting a fair shake. 4 and we have to have direct testimony to read. 5 that direct testimony is convincing, then that's what we 6 go by. 7 an order out of material that doesn't produce good 8 evidence. And if It has to be in evidence because you can't write 9 10 They've got to bring the evidence, MS. ANDERSON: Is there ever a role for sternness or anger with Commissioners? 11 MR. MITCHELL: I think the person serving as 12 the chair has to keep order. 13 out there presenting their cases appreciate that. 14 have to know that everyone is going to be given their 15 time to speak. 16 I think the people that are They We'll all listen and be attentive and listen to 17 what they have to say while they have the floor. 18 was serving as chairman and someone was being rude, it 19 would be my position to calm them down so that everybody 20 is treated fair. 21 22 23 If I MS. ANDERSON: Has the job been as you expected MR. MITCHELL: It's been more rewarding. it to be? I 24 knew it would be a rewarding job, but to think that 25 you're out there helping people, and that you're trying www.compuscriptsinc.com 2/11/2013 94 1 to make this state grow economically, and to see the 2 state grow economically, and to see the industries, even 3 through these troubling times -- that's the first thing I 4 had to learn on the Public Service Commission. 5 When I came on, the first thing that I had to 6 learn, we're providing funds for these companies ten 7 years down the road, 15 years down the road. 8 looking at next year. 9 road, and that's something that's an eye-opening We're not We're looking at 15 years down the 10 experience. 11 we provide these companies money to operate on and they 12 do their job the way that they are doing their job, it 13 saves the ratepayers money. 14 15 I learned that because in the long run, when MS. ANDERSON: How do you think you've done since you were elected to the Commission? 16 MR. MITCHELL: How? I hope a good job. I've 17 given it 110 percent. 18 Carolina. 19 that I've done a good job. 20 everything that I have to please everybody and treat 21 everybody kind. 22 I love the people of South I love serving in office, and I would hope MS. ANDERSON: I've certainly given it What is the purpose of utility 23 regulation? 24 Commission should consider in setting rates. 25 Please describe three objectives that the MR. MITCHELL: The purpose of utility rate -- www.compuscriptsinc.com 2/11/2013 95 1 as you know, utilities are a monopoly. 2 that you hear from that is, well, you know, they're a 3 monopoly, so if I could move somewhere else, I'd go. 4 Well, it doesn't work like that. 5 The first thing And then the next thing that you hear is, well, 6 competition is always the best thing. Well, in certain 7 areas, we don't have competition. 8 boundary lines drawn. 9 we know who are investor-owned utilities. We already have the We know who are cooperatives, and So the 10 financial need is the first priority. 11 sure that that company is financially sound, and that we 12 can regulate them, and that down the road they're going 13 to be providing good service. 14 We have to make The objective, the need comes into play as far 15 as being fair to all customers. 16 have to be treated fairly, and they all have to share 17 whatever the Commission awards certain companies, then 18 that's what they have to share and contribute. 19 the end, it breaks down to energy needs, demand needs, 20 and how we regulate doing that portion. 21 regulate to make sure that their needs are met and that 22 the rates are just and reasonable? 23 important. 24 25 All customer involved And in How do we And that's very Most always, too, is making sure, making sure that the ratepayer gets a bang for their buck in the end www.compuscriptsinc.com 2/11/2013 96 1 because that's the main thing. 2 ratepayer and making sure that the companies operate and 3 they're financially viable, that's the mission of the 4 Commission as far as I'm concerned. 5 MS. ANDERSON: But that balance between Please describe the difference 6 between capital costs and contingency costs for the Base 7 Load Review Act, and please include what the South 8 Carolina Supreme Court said about contingency costs. 9 MR. MITCHELL: Capital cost, we all know, is 10 the first, I mean, that's what you spend for capital. 11 That's what the company calls the gross plan. 12 And contingency is, as we go along, the 13 contingency costs are costs that are recurring, and you 14 have to have a balance with the capital cost. 15 capital cost is what's presented in your direct 16 testimony, as far as what the plants cost. 17 ever balancing line between that and your contingency 18 cost, as plants are built, to make sure that that flow of 19 capital will meet the demands of the plant. 20 MS. ANDERSON: The So it's an I have a few housekeeping 21 questions. Have you sought or received the pledge of any 22 legislator prior to this date? 23 MR. MITCHELL: I have not. 24 MS. ANDERSON: Have you sought or been offered 25 a conditional pledge of support by any legislator pending www.compuscriptsinc.com 2/11/2013 97 1 the outcome of your screening? 2 MR. MITCHELL: No. I have not. 3 MS. ANDERSON: Have you asked any third-parties 4 to contact members of the General Assembly on your behalf 5 before the final and formal screening report has been 6 released? 7 MR. MITCHELL: I have not. 8 MS. ANDERSON: Are you aware of any friends or 9 10 colleagues contacting members of the General Assembly on your behalf? 11 MR. MITCHELL: I'm not. 12 MS. ANDERSON: Are you familiar with the 13 48-hour Rule which prohibits a candidate from seeking 14 pledges until 48 hours after the report has been 15 submitted to the General Assembly? 16 MR. MITCHELL: I am. 17 MS. ANDERSON: Do you plan to serve your full 18 term if reelected? 19 MR. MITCHELL: Surely. 20 MS. ANDERSON: I have no further questions. 21 SENATOR HUTTO: 22 23 All right. Any members have questions? REPRESENTATIVE SANDIFER: Thank you, 24 Mr. Chairman. I want to follow up with a question that 25 Ms. Anderson asked you because you answered your idea, www.compuscriptsinc.com 2/11/2013 98 1 but you didn't answer the direct question. 2 MR. MITCHELL: Yes. 3 REPRESENTATIVE SANDIFER: How did the Supreme 4 Court rule on this idea of capital cost versus 5 contingency cost? 6 MR. MITCHELL: 7 capital cost had to be included. 8 difference there of those costs conflicting, and capital 9 costs must be covered. 10 11 I think it was some REPRESENTATIVE SANDIFER: And did they support the Commission's opinion, or did they overturn it? 12 13 It was my understanding that MR. MITCHELL: My opinion is that they supported the Commission's opinion. 14 REPRESENTATIVE SANDIFER: As you look at the 15 various cases that go to the Supreme Court, appeals from 16 the Commission, what percent of your cases are heard at 17 the Supreme Court, and what percent of those are 18 overturned? 19 MR. MITCHELL: We've had very few overturned 20 recently, Mr. Chairman. 21 Commission to review to actually -- they weren't 22 overturned. 23 was sent back to the Commission, but we've had very, very 24 few that the Supreme Court sent back to us at all 25 recently. We've had them sent back to the We have one particular case, I believe, that I can think of days, seven, eight years ago, www.compuscriptsinc.com 2/11/2013 99 1 but recently we've had very few cases sent back to us. 2 3 REPRESENTATIVE SANDIFER: You've been around since Act 175. 4 MR. MITCHELL: Yes. 5 REPRESENTATIVE SANDIFER: When we formulated 6 Act 175 and made the dramatic changes that we made, how 7 have you felt about this idea that you no longer have the 8 opportunity to interact with constituents? 9 MR. MITCHELL: Well, it took me a long time to 10 really -- I missed doing that, but I didn't once 175 came 11 in, and you laid out the groundwork. 12 Mr. Scott, you'll find out that I'm frequently referring 13 anybody that calls me about anything to Mr. Scott. 14 does a good job handling complaints, and that's the first 15 place that I go when anybody calls me about anything. 16 REPRESENTATIVE SANDIFER: If you contact He One of the things 17 that you mentioned earlier, and I just want to make sure 18 that the panel understands this, you indicated that 19 you've been chairman and vice chairman of the Commission, 20 and I congratulate you, but is that a rotating position 21 that rotates periodically among Commissioners? 22 MR. MITCHELL: It is, but we do not rotate all 23 the time. If you go through history, that doesn't mean 24 that will happen because we've had several occasions 25 where that didn't occur. www.compuscriptsinc.com 2/11/2013 100 1 2 REPRESENTATIVE SANDIFER: Are you suggesting that we should have a larger percentage of renewables? 3 MR. MITCHELL: No. What I'm suggesting, it 4 would be great if we could, if we could afford 5 renewables. 6 instance. 7 South Carolina is the storage. 8 say, well, let's put them in the ocean, and we'll put 9 them in the ocean. As you well know, let's take wind, for 10 It's wonderful. The problem with wind in Then we have some that Well, we have hurricanes in South Carolina, and 11 that presents a problem. 12 people in my county, Saluda County, that I've been 13 talking about windmills. 14 wonderful. 15 shines enough for solar in South Carolina, but the 16 studies that we've conducted, we haven't been able to 17 make it work as far as the financial end of it. 18 If we can encourage it, I want to see 19 We have some experimentation of If we can make it work, that's Let's take solar. renewables work. Everyone thinks the sun Yes, sir. 20 REPRESENTATIVE SANDIFER: 21 something that peaked my interest. 22 that we have conducted. 23 studies? 24 25 MR. MITCHELL: And you just said You said, The studies Does the PSC conduct these No, sir. I probably misspoke. In fact, to say all the studies that we've received at www.compuscriptsinc.com 2/11/2013 101 1 the Public Service Commission that I've been aware of, 2 that I know we have an energy council here in the state, 3 and that's exactly what I was meaning. 4 But, listen, I'd be the first in line for 5 renewables. 6 cleaner, we need to do that. 7 have to look at cost. 8 is mandated, I think the Commission needs to abide by the 9 law. 10 I'm convinced that if we can make the air But on the other hand, we And it's just my opinion, whatever But that's just my conservative approach. REPRESENTATIVE SANDIFER: I have a sneaking 11 suspicion that the chairman will ask you a question about 12 this, but I want to follow up. 13 renewables are not those that create greenhouse gases? 14 think we're confusing a term there. 15 MR. MITCHELL: Did you know that all I I think you are, and I would go 16 a step further to say that that's why I'm a firm believer 17 in nuclear energy. 18 that, what our plans are to take off the old coal powered 19 plants and come with nuclear energy, in my estimation, 20 that could be part of what we're talking about. 21 on how we look at this. 22 If you take the clean air side of REPRESENTATIVE SANDIFER: Depends I'm going to ask you 23 one follow up. Is the Commission planning to go to a 24 larger nuclear fleet, or is that decision made in the 25 legislature? www.compuscriptsinc.com 2/11/2013 102 1 MR. MITCHELL: Once it gets to us, it's our 2 decision to carry out you all's wishes. 3 you that before. 4 5 REPRESENTATIVE SANDIFER: I think I told Your language is sometimes misleading. 6 MR. MITCHELL: Well, let me correct that. 7 Certainly, it's a legislative proposal, and I think we 8 hope that we're carrying out the will of the General 9 Assembly, Mr. Chairman. 10 11 REPRESENTATIVE SANDIFER: Chairman. 12 SENATOR HUTTO: 13 REPRESENTATIVE FORRESTER: 14 Anybody else have questions? Thank you, Mr. Chairman. 15 16 Thank you, Mr. What would you see as our biggest challenge facing the Commission over the next five to ten years? 17 MR. MITCHELL: 18 in line with the nuclear facility. 19 undertaking for a small state, but I'm 100 percent behind 20 it. 21 I've kept up with the Commission for a long time. 22 '80s, we heard the same talk about nuclear development 23 would not move forward, and it has, and it's been good 24 for the state. 25 Well, I hope we keep the price It's a big I think we're making the right decision. I think In the I look upon that, it's a great, it's a large www.compuscriptsinc.com 2/11/2013 103 1 project, but that's one of the main focuses I'm on now, 2 and keeping the rates so they're affordable for the 3 ratepayer. 4 such a recession, and small businesses are suffering. 5 They are suffering, and, I, for one, don't want to do 6 anything that's going to jeopardize them in any manner. 7 That's my other deal because we've been in REPRESENTATIVE FORRESTER: Last question. 8 Where do you see the issues with third-party sales of 9 solar power? 10 MR. MITCHELL: I think if we can get the 11 solar -- I think solar is wonderful. 12 can -- once again. 13 reaction. 14 I think if we The affordability, it's a chain If the affordability -- we need more solar. And I think all increases in sales, no matter 15 third-party or what, I think getting it affordable 16 because you just have to sit in on a few night hearings 17 like we do, and we go around, and I hear sad cases of 18 people choosing, on fixed income, paying their electric 19 bill or buying their medicine. 20 So I include that as another factor at the 21 Commission because that really makes me lay awake at 22 night. 23 you think you've made the right decision, then you can do 24 that. 25 But when you go to bed at night, and you realize So affordability is my deal. REPRESENTATIVE FORRESTER: Thank you. www.compuscriptsinc.com 2/11/2013 104 1 SENATOR HUTTO: 2 MR. MITCHELL: 3 SENATOR HUTTO: The Universal Service Fund. Yes, sir. Do you think that the 4 recipients of that now should be able to utilize those 5 funds to extend broadband in rural areas? 6 MR. MITCHELL: Well, if we can extend broadband 7 in rural areas, I'm for it. As you know, the early days 8 with the Universal Service Fund, the implicit funds were 9 a little unidentifiable, and that was a problem. And 10 that's where we had a decision from the Supreme Court, 11 and we went to the explicit pricing. 12 I think it's worked pretty good here in South Carolina, 13 and I think we've uncovered a lot of unserved areas 14 before Universal Service came in. 15 And in my opinion, It's worked good, and those areas are not going 16 to grow, they're not going to get industry there unless 17 they have fiber there to start with. 18 whole state grow, and that's near and dear to my heart, 19 seeing those areas grow. 20 more deal on the General Assembly. 21 the reason we have this fine network in South Carolina 22 today. 23 if you look at the number of rural areas that we have. 24 25 That just makes the And I'll tell you, I'll put one Their great wisdom is I would hold our telecom network second to none, SENATOR HUTTO: Speaking of the telecom issue, we have more and more people doing away with their www.compuscriptsinc.com 2/11/2013 105 1 landlines and using their cells, which means we have a 2 dwindling number paying into the USF. 3 into the USF? 4 MR. MITCHELL: Should they pay Well, you know, that's a big 5 issue with the Connect America Fund that I was just 6 speaking about. 7 got the bidding process now, and I think it can work. 8 think it can work, but we don't need -- the problem with 9 the -- quite honestly. New UTC designees in those areas, you The FCC, in their delivery now, 10 they're not considering the state regulators enough. 11 There are some, but we need a voice in there. 12 I We're out there on the ground doing the 13 groundwork for them, and there are certain things that I 14 think they have to do to make it work for everyone. 15 Let's face it, nobody likes to go out in rural areas and 16 provide service. 17 some form of helping these companies go out in these 18 areas, you just can't do it. 19 always have some type of Universal Service. 20 It's hard to make money. How we do it? So without That's why you have to This might be a good way where 21 these UTCs go in there, and they have to pay the funds 22 early and bid, but it has problems. 23 you do, if you don't have anybody in the certain areas. 24 That's one of my questions with that. 25 SENATOR HUTTO: I don't know what I'm from a rural area, like www.compuscriptsinc.com 2/11/2013 106 1 you're from a rural area, and it's a double whammy. 2 expensive to run fiber out there, and it's also expensive 3 to run coverage out there for the cellular. 4 It's I mean, both don't cost nearly as much as an 5 urban area where we have a base population. 6 like if you don't put the landlines and the fiber out 7 there, they're necessarily going to make it up in the 8 rural areas. 9 MR. MITCHELL: It's not You always have bad spots. 10 That's my argument. 11 mouth when I sit down to a joint board meeting in 12 Washington. 13 state, we have a lot of fiber to run. 14 That's the first thing out of my And, you know, let's face it, for a rural SENATOR HUTTO: Let me talk to you about solar. 15 Should people that install their own solar panel on their 16 own property and generate more electricity at certain 17 times of the day, be able to put it back on the grid? 18 MR. MITCHELL: I think anybody that has the 19 initiative to install solar panels, sure. I would 20 encourage anybody to do that. 21 defray their costs, absolutely I would encourage. 22 like I stated earlier, I like the idea of renewables. 23 have to all get together and make them work, but I think 24 people have to understand we need nuclear also, and we 25 would love a place to store it that we've already paid If it helps in any way to www.compuscriptsinc.com Just We 2/11/2013 107 1 for. 2 SENATOR HUTTO: The third-party installation of 3 solar -- the seller of nuclear panels wanted to install 4 their own in a church or in their house and finance that, 5 should they have to go through all of the steps to become 6 a utility to do that? 7 MR. MITCHELL: Absolutely not. I think that 8 needs to be worked out somehow. But as you know, 9 Senator, in those particular cases, we were just abiding 10 by the rules that we have in place now. 11 say things can't change. 12 to be given the opportunity, if they need and want to. 13 That's not to Absolutely, I think they need REPRESENTATIVE SANDIFER: Thank you, Mr. 14 Chairman. Would you explain to us the role of the Public 15 Service Commission in regulating government-owned 16 communication service providers. 17 MR. MITCHELL: Mr. Chairman, my understanding 18 in that particular instance, the state does not control 19 the Budget Control Board. 20 indexes that they oversee, so the state has very little 21 in that. 22 23 24 25 The Budget Control Board has REPRESENTATIVE SANDIFER: What's the role of the Public Service Commission? MR. MITCHELL: Very little role if the budget control -- we don't have anything to control over them. www.compuscriptsinc.com 2/11/2013 108 1 We don't -- the Budget Control Board, that's specifically 2 in our -- in Title 58, first thing is the Budget Control 3 Board is excluded. 4 REPRESENTATIVE SANDIFER: 5 MR. EBERSOLE: 6 question for you. 7 8 Thank you. I just have a lighthearted You're a farmer, right? MR. MITCHELL: Yeah. Try to on the weekends. Well, I have beef cattle. 9 10 Okay. MR. EBERSOLE: I was going to ask you how you manage your PSC duties as well as the farming duties? 11 MR. MITCHELL: Well, I grew up on a dairy farm, 12 and if I were dairy farming, I will assume you, I 13 couldn't do it. 14 they pretty much -- I do it on a rotation basis with the 15 pastor, so I eliminate hay and all that. 16 have two boys that work a lot. 17 But beef cattle, I have 100 cows and SENATOR HUTTO: All right. Of course, I We're going to ask 18 you to stay but everyone else to leave. 19 questions to take up with you. We have a few 20 MR. MITCHELL: 21 (The Committee went into Executive Session from 22 12:55 p.m. to 1:15 p.m.) 23 SENATOR HUTTO: 24 session. 25 Congressional District. Yes, sir. All right. Back in public We have our last candidate in the Third www.compuscriptsinc.com 2/11/2013 109 1 2 (Comer Henry "Randy" Randall III was duly sworn, after which testimony commenced at 1:15 p.m.) 3 MS. ANDERSON: I want to give a brief overview 4 of Mr. Randall's educational and experience background. 5 Mr. Randall obtained a Bachelor of Science degree from 6 Presbyterian College and a Masters in Education from the 7 University of Georgia. 8 9 Over the past five years, he has completed continuing education courses through the American Power 10 Association Institute and the South Carolina Economic 11 Development School. 12 the City of Clinton and is a past Clinton City Council 13 member. 14 utility, water utility, and waste water collection. 15 Mr. Randall is the current Mayor of The town of Clinton runs its own electric He has also held a number of 16 administrative-level positions at Presbyterian College, 17 where he served as executive director for Alumni and 18 Community Relations. 19 Power Agency Board since 2004, and on the American Public 20 Power Association Policy Makers Council since 2006, and 21 was the National Chair on the American Public Power 22 Association Policy Makers Council from 2011 to 2012. 23 He served on the Piedmont Municipal Mr. Randall has also served as the Chair of the 24 Clinton-Newberry Natural Gas Authority from 2003, to the 25 present. www.compuscriptsinc.com 2/11/2013 110 1 Do you have any changes that you'd like to make 2 to your Personal Data Questionnaire that you submitted 3 with your application? 4 MR. RANDALL: 5 MS. ANDERSON: No, ma'am. I would request that Mr. 6 Randall's Personal Data Questionnaire be entered into the 7 record with any confidential information being redacted. 8 9 (EXH. 6, Personal Data Questionnaire of Randy Randall, marked for identification.) 10 MS. ANDERSON: As part of the background 11 investigation of Mr. Randall, we obtained a credit check, 12 driver's license, and SLED check. 13 a personal matter and request that they be taken up in 14 Executive Session at the appropriate time. 15 16 Staff has questions of Before we begin questioning, do you have a brief statement that you'd like to make? 17 MR. RANDALL: Just that I appreciate the 18 opportunity to be here today. 19 potential of serving the State of South Carolina in this 20 capacity. 21 22 23 I'm excited about the Thank you for this opportunity. MS. ANDERSON: Would you please state your full name and home address for the record. MR. RANDALL: 24 I go by Randy. 25 Carolina, 29325. Comer Henry Randall, the third. 306 West Maple Street, Clinton, South www.compuscriptsinc.com 2/11/2013 111 1 MS. ANDERSON: 2 MR. RANDALL: 3 MS. ANDERSON: 4 Are you a registered voter? Yes. In which congressional district are you registered to vote? 5 MR. RANDALL: 6 MS. ANDERSON: 7 Why are you interested in serving on the Public Service Commission? 8 9 The third. MR. RANDALL: service. I've always had a passion for I didn't know about the Public Service 10 Commission until I became mayor, and I got interested in 11 the utility business. 12 suggested at one point, he said, You ought to look into 13 this in the future. 14 One of my old city managers So I did some research, and I read a lot about 15 the Public Service Commission. 16 good fit for me at this time, so I'm anxious to try a new 17 challenge and be involved with the Public Service 18 Commission. 19 20 21 MS. ANDERSON: I thought it would be a Have you attended any hearings at the Commission? MR. RANDALL: I have not. I've read the 22 transcript from one, and I've read several of the orders 23 from several of the hearings. 24 25 MS. ANDERSON: How would you expect to get up to speed on the issues confronting the Commission? www.compuscriptsinc.com 2/11/2013 112 1 MR. RANDALL: Well, you know, like anything, I 2 would study a lot. 3 involved. 4 involved, I know there is interaction with the ORS. 5 would be studious, like I am with my duties as mayor and 6 other things. 7 I know there's a lot of reading I know talking with the folks that are already MS. ANDERSON: I Please describe your experience 8 or expertise in the following areas, and include the time 9 you've been engaged in the issues: Energy, 10 telecommunications, consumer protection and advocacy, 11 water and waste water issues, finance, economics, 12 statistics, accounting, engineering, or law. 13 MR. RANDALL: Well, let me start with energy, 14 since that's what I've been dealing with the most. 15 Clinton is an electric city. 16 Newberry Natural Gas Authority. 17 Piedmont Municipal Power Agency, which is a joint action 18 agency that owns 25 percent of the Catawba Nuclear Plant 19 of Unit One. 20 Clinton. We're also in together with We're members of With that, we set rates for the City of 21 Through PMPA, I also serve as the member of the 22 PMPA board and have been the chairman for the past couple 23 years. 24 that are part of PMPA. 25 got involved with the American Public Power Policy Makers PMPA sets the wholesale rates for the ten cities After being involved in PMPA, I www.compuscriptsinc.com 2/11/2013 113 1 Council. It's a group of elected officials nationwide 2 that come together and really talk to legislators from 3 all over the country about public power and about the 4 issues that affect public power. 5 of the Atlantic District, and a few years ago I got asked 6 to be put in the executive committee and moved up through 7 the ranks and became the chairman for a year. I was a representative 8 When I was the chairman, the executive 9 committee has a lot of interesting things that we have to 10 do. 11 the Boiler MACT Rules with Ms. Gina McCarthy, who is head 12 of Air Quality. 13 of testifying with the Intergovernmental Affairs 14 Department at the White House, the Treasury Department, 15 and the Science Department. 16 revolved around the government talking about reducing tax 17 exempt financing options for small cities and small 18 utilities. 19 During that time, I got to testify at the EPA about We also did a lot of visiting and a lot Most of those conversations Also, one other thing, I guess, and this sort 20 of hits on the finance side of it as well. 21 of Piedmont Municipal Power Agency, I've been involved 22 with going every year to New York to make presentations 23 with our finance director and general manager to Moody's, 24 Fitch, and Standard and Poor to make sure that our bond 25 ratings were good and competitive for financing. www.compuscriptsinc.com As Chairman 2/11/2013 114 1 On the natural gas side, Clinton and Newberry 2 have owned this joint gas authority since the '50s, I 3 guess. 4 I've been chairing that since I became mayor. 5 rates for the citizens of the lower half of Laurens 6 County and all of Newberry County. 7 Each city has a mayor and two council members. We set the I learned a good bit about the gas business, 8 and it's very interesting how that all works. Consumer 9 advocacy, you know, as an elected official, I've been a 10 consumer advocate for my whole career. 11 areas -- I've not been involved in telecommunications, 12 other than dealing on the city level with pole attachment 13 fees. 14 The other And engineering, financing, legal, you know, in 15 my business with the city, we look at a lot of 16 engineering reports. 17 finance side. 18 side and the gas side and the power side. 19 all of them. 20 21 22 We look at a lot of audits on the We have to approve all those on the city MS. ANDERSON: I think that's I think the other one was water and waste water. MR. RANDALL: Oh, yeah. Well, the City of 23 Clinton runs our own water distribution. 24 plant, so we set the rates for water. 25 interesting because water and sewer is under ground, so www.compuscriptsinc.com We have a water Water is 2/11/2013 115 1 it doesn't matter how much money you spend on it, nobody 2 ever gets to see it. 3 electricity sometimes, but things get real primitive 4 without water. 5 Commission does our waste treatment, but we do our own 6 waste water collection, so we have to maintain that as 7 well. 8 9 10 We all say you can do without The Laurens County Water and Sewer MS. ANDERSON: Are you familiar with the 2006 Advisory Opinion issued by the Review Committee dealing with attendance at legislative receptions? 11 MR. RANDALL: 12 MS. ANDERSON: Yes, ma'am. Have you attended any 13 legislative receptions since receiving the advisory 14 opinion? 15 MR. RANDALL: 16 MS. ANDERSON: No. Are you familiar with the PURC 17 decision at its meeting on January 15th of this year, 18 that would clarify the 2006 opinion? 19 MR. RANDALL: 20 MS. ANDERSON: Yes, ma'am. I was here. Have you attended any 21 legislative receptions or caucus meetings, other than 22 delegation meetings, on or after January 15th? 23 MR. RANDALL: 24 MS. ANDERSON: 25 No, ma'am. Assume that you were serving on the Commission and you were approached by someone that www.compuscriptsinc.com 2/11/2013 116 1 wanted to discuss a matter that is or may become an issue 2 in a proceeding. 3 How would you handle the situation? MR. RANDALL: Well, according to the Judicial 4 Code of Conduct, the Public Service Commission is under 5 ex parte -- ex parte communication is strictly 6 prohibited. 7 me about that, you immediately have to enter it into the 8 record and refer them to ORS. 9 could not be talking about. 10 So I think if somebody came up and talked to MS. ANDERSON: That's something that we Are you aware that Commissioners 11 are subject to the Judicial Code of Conduct as well as 12 state ethics laws? 13 MR. RANDALL: 14 MS. ANDERSON: Yes, ma'am. Are you familiar with any 15 political party, board, or commission that would need to 16 be reevaluated if you were nominated and elected? 17 18 MR. RANDALL: No. Unless we count city council and those kinds of things. 19 MS. ANDERSON: Do you belong to any 20 organizations that discriminate based on race, religion, 21 gender? 22 MR. RANDALL: 23 MS. ANDERSON: 24 25 No. What is the appropriate demeanor for a Commissioner? MR. RANDALL: If you sit in a seat where you www.compuscriptsinc.com 2/11/2013 117 1 have people in front of you, which I have to do a lot as 2 mayor, I try to treat everyone like I want to be treated. 3 I think demeanor is one of openness, listening, showing 4 impartiality, being fair. 5 being heard. 6 7 8 9 10 11 12 MS. ANDERSON: All folks want to know they're Does that apply only when you're on the bench, or does that apply 24/7? MR. RANDALL: That's the way I try to live my whole life. MS. ANDERSON: Is there ever a role for sternness or anger with the Commissioners? MR. RANDALL: I don't think so. I've never, in 13 all my time being the mayor and the chairs of these other 14 organizations, had to be stern or angry. 15 treat people like they want to be treated, and it works 16 out very well. 17 18 19 MS. ANDERSON: I think we Describe the purpose of the Base Load Review Act. MR. RANDALL: As I understand, the Base Load 20 Review Act allows utilities to recoup prudent costs in 21 the financing of building a new plant. 22 the consumer against having the financial responsibility 23 for imprudent costs associated with it. 24 studied on this was I read the orders of the, I think it 25 was Taxpayers Citizens Committee of South Carolina versus www.compuscriptsinc.com It also protects The thing that I 2/11/2013 118 1 PSC, ORS, and SCE&G, the ability to get the capital and 2 as well as contingency costs. 3 overturned, but I think the contingency costs were not 4 part of the Base Load Review Act. 5 MS. ANDERSON: 6 So I think the orders were What's the difference between capital costs and contingency costs? 7 MR. RANDALL: Well, your capital costs are what 8 you're planning to have to do as you build your plant. 9 Contingencies are things that are unexpected, things that 10 you think might happen, but you don't know if they will 11 or not. 12 13 MS. ANDERSON: What is the distinction between concept of co-generation and distributive generation? 14 MR. RANDALL: Well, co-generation, when you're 15 talking about a company that has several types, when 16 you're talking coal, gas, hydro, you use co-generation 17 basically. 18 been involved just with a company that just does nuclear 19 and does the supplemental power from several points. 20 But I think, you know, with coal, you have Well, most companies I would think, and I've 21 issues with CO2. With nuclear, you have issues with 22 disposal. 23 think co-generation is basically you're trying to use 24 those to make sure that your costs are mitigated and that 25 they're environmentally sound as you run the gamut. There's cost issues with all of them, so I www.compuscriptsinc.com 2/11/2013 119 1 Distributive generation, I'm not sure. 2 MS. ANDERSON: I have a few housekeeping 3 questions for you. Did you make any contributions to 4 members of the General Assembly within six months of 5 filing your application? 6 MR. RANDALL: 7 MS. ANDERSON: No, ma'am. Have you made any contributions 8 to members of the General Assembly since filing your 9 application? 10 MR. RANDALL: 11 MS. ANDERSON: 12 No, ma'am. Have you sought or received the pledge of any legislator prior to this date? 13 MR. RANDALL: 14 MS. ANDERSON: No, ma'am. Have you sought or been offered 15 a conditional pledge of support by any legislator pending 16 the outcome of your screening? 17 MR. RANDALL: 18 MS. ANDERSON: No, ma'am. Have you asked any third-parties 19 to contact members of the General Assembly on your behalf 20 before the final and formal screening report has been 21 released? 22 MR. RANDALL: 23 MS. ANDERSON: No, ma'am. Are you aware of any friends or 24 colleagues contacting members of the General Assembly on 25 your behalf? www.compuscriptsinc.com 2/11/2013 120 1 MR. RANDALL: 2 MS. ANDERSON: No, ma'am. Are you familiar with the 3 48-hour Rule which prohibits a candidate from seeking 4 pledges for 48 hours after the report has been submitted 5 to the General Assembly? 6 MR. RANDALL: 7 MS. ANDERSON: 8 Do you plan to serve a full term if elected? 9 MR. RANDALL: 10 MS. ANDERSON: 11 Yes, ma'am. Absolutely. Mr. Chairman, I have no further questions. 12 SENATOR HUTTO: 13 REPRESENTATIVE SANDIFER: 14 15 Any members have questions? Thank you, Mr. Chairman. Mr. Randall, just a few questions that I have, 16 and as you know, I live in a region served by PMPA, 17 although our municipal power doesn't come from PMPA. 18 Can you give me an idea of the initial debt 19 when PMPA was formed, and I think that was in the '70s, 20 and where it is today? 21 MR. RANDALL: It was somewhere close to a 22 billion dollars, as I understand it. 23 it is, but it's a lot lower now. 24 full debt is. 25 I don't know what REPRESENTATIVE SANDIFER: I don't know what the I'm curious because www.compuscriptsinc.com 2/11/2013 121 1 at one time, rather than decreasing, it was an increase 2 in debt, and one that I've been very concerned about. 3 MR. RANDALL: They've gone through several 4 restructures and refis to bring that down, so we're 5 about a year or two away from being in full cost 6 recovery. 7 That has been restructured out into the 2040s. REPRESENTATIVE SANDIFER: When you said a few 8 minute ago that you set rates at the wholesale level to 9 the member cities, how do you establish the rates at PMPA 10 11 that you charge the ten member cities? MR. RANDALL: Well, you know, we have to take 12 the cost of operating the plant -- we are partners with 13 Duke Energy in that plant -- the cost of the financing 14 and put that together. 15 model to come up with the rates, and we're about seven 16 cents KWH wholesale to the cities. 17 REPRESENTATIVE SANDIFER: It's basically a cost of service When you figure those 18 things together, do you also build into it a margin? 19 you were in private enterprise, you'd call it a profit. 20 MR. RANDALL: 21 there's not a profit. 22 our distribution. 23 the wholesale rate. 24 25 If Well, at the wholesale rate, The cities -- do we have to run There's a margin, but it's small at REPRESENTATIVE SANDIFER: You also had a special purpose district in Clinton Newberry Natural Gas www.compuscriptsinc.com 2/11/2013 122 1 Authority. 2 clothed as a municipal power supplier and PMPA, none of 3 which are governed under are PSC. 4 MR. RANDALL: 5 REPRESENTATIVE SANDIFER: Sure. Pipeline safety always. 8 9 Right, except for the safety of the natural gas. 6 7 Would you make a very quick comparison of it MR. RANDALL: Sure. With the gas authority, I guess the difference really is you're dealing with only 10 two cities. When you have ten cities with PMPA, the 11 dynamics are a little different. 12 cities: Rock Hill, Gaffney, Easley, Greer; and smaller 13 cities: Westminster, Abbeville, Clinton, Laurens, and 14 Union. One, you have larger And some are city utilities. Some run with CPWs. 15 So city utilities, the mayor and council and 16 city manager have more control over transfers from the 17 utility to actually run the city in the general fund. 18 When you have a CPW, there's a little more autonomy by 19 the CPW. 20 The gas company, being a special purpose 21 district, the two cities really own this gas company. 22 There's a formula that we take, and it's based on users. 23 Newberry is a little larger, having the whole county, 24 than Clinton, taking half of Laurens County, so there is 25 a formula where Newberry gets about 51 percent, and we do www.compuscriptsinc.com 2/11/2013 123 1 48 percent. It's not all the profits. We have a set 2 amount that we get every year that goes to the general 3 fund. 4 get extra money that's designated for economic 5 development. 6 If there's a particularly good year, we sometimes REPRESENTATIVE SANDIFER: And you also 7 indicated that Clinton operates its own waste water 8 system, but then you're in a partnership with who? 9 MR. RANDALL: We run our own waste water 10 collection, but it goes through a meter. Laurens County 11 Water and Sewer Commission, which is another special 12 purpose district, actually treats the water. 13 I think the city used to do its own waste water 14 treatment, but they sold that to the Laurens County Water 15 and Sewer Commission before I got on the council, so it's 16 before the mid '90s when that happened. 17 REPRESENTATIVE SANDIFER: So are you allowed to 18 establish within the City of Clinton the rates for waste 19 water collection? 20 MR. RANDALL: We get a charge, the city gets a 21 charge from the Laurens County Water and Sewer 22 Commission. 23 keep waste water, but it's mainly through the sewer 24 charge. 25 We have a small margin that we add on to REPRESENTATIVE SANDIFER: Let's talk about www.compuscriptsinc.com 2/11/2013 124 1 telecom for just a minute. 2 suite. 3 You said that was your weaker Tell me about the Universal Service Fund. MR. RANDALL: Sure. I think it's administered 4 by the ORS. 5 LEC Fund are funds are basically to, as I understand it, 6 to bring telephone service into rural areas. 7 The Universal Service Fund and the Interim As part of that, you've got the Lifeline Fund, 8 which provides low income families with the ability to 9 install and for monthly use charges, and then you have 10 the relay service that helps hearing impaired individuals 11 with phone service. 12 13 14 REPRESENTATIVE SANDIFER: And in your opinion, has the USF outlived its usefulness? MR. RANDALL: I would not think so, but depends 15 on if -- and I don't think. 16 in that now. 17 makes communication a little bit easier, but there's 18 issues with 9-1-1, and that kind of thing, that you have 19 to consider when you talk Universal Service Fund, and 20 you're talking about folks that don't have any need. 21 I'm not sure if wireless is I don't think it is. REPRESENTATIVE SANDIFER: Cell phone technology If you're elected to 22 the Public Service Commission, and you've indicated in 23 all your information and long history of public service, 24 how would you react to the fact that you would no longer 25 have this ability to deal directly with constituents or www.compuscriptsinc.com 2/11/2013 125 1 with the legislature for that matter? 2 3 MR. RANDALL: I think I could handle that at this point. 4 REPRESENTATIVE SANDIFER: One final question. 5 Talking about the Base Load Review Act, you talked about 6 going to New York and meeting with the credit rating 7 agencies. 8 Act has had upon IOUs and their ability to borrow funds? 9 What impact do you think the Base Load Review MR. RANDALL: Well, when you are able to get a 10 prudent rate of return on your money, and you go appear 11 in front of Moody's, Fitch, Standard and Poor, your 12 credit rating is important. 13 have, if you're covering your costs, and if you're able 14 to raise your rates to cover your costs. 15 that's -- I don't know if I'm answering what you're 16 talking about. 17 They want to know if you REPRESENTATIVE SANDIFER: So I think Oh, you are. To 18 summarize it, would you say it's important for the Public 19 Service Commission to maintain a relationship with Wall 20 Street? 21 22 23 24 25 MR. RANDALL: Oh, yes. I think you have to. mean, credit ratings are everything on money borrowed. REPRESENTATIVE SANDIFER: Mr. Randall. Thank you, Thank you, Mr. Chairman. SENATOR HUTTO: Representative Forrester? www.compuscriptsinc.com I 2/11/2013 126 1 2 3 REPRESENTATIVE FORRESTER: Thank you, Mr. Chairman. Mr. Randall, with your background in the 4 natural gas authority, municipal power systems, you 5 mentioned a water system, none of which are overseen 6 presently by the Public Service Commission. 7 8 9 In your opinion, should they be in the future? If so, why? If not, why not? MR. RANDALL: Now, Representative Forrester, 10 I'm going to be honest. 11 I don't know. 12 probably not, and here's why. 13 side, they're public power. 14 goals as the Public Service Commission, as being an 15 advocate, providing low-cost power. 16 I have not thought about that. I don't think -- I would say maybe, They are, on the electric So public power has the same You're not worried about investors. 17 worried about your constituents. 18 there is the same. 19 you were asking. 20 You're I think the philosophy I don't know if that's exactly what REPRESENTATIVE FORRESTER: 21 your municipal corporate limits? 22 MR. RANDALL: Do you serve outside We serve electricity to one 23 neighborhood outside our corporate limits. 24 district ranges probably two or three miles in diameter. 25 In the county, we divided that up between people, you www.compuscriptsinc.com Our water 2/11/2013 127 1 know, all the folks that provide water, Laurens, Clinton, 2 the upper part of the county is served partially by 3 Greenville County. 4 REPRESENTATIVE FORRESTER: But those people 5 outside the municipal corporate limits don't have any 6 representation. 7 8 Would their rates go up or down? MR. RANDALL: No. Not as far as on the city council or the gas people do, but water does not. 9 REPRESENTATIVE FORRESTER: Are you aware that 10 municipals don't pay taxes outside their corporate 11 limits? 12 MR. RANDALL: Right. Yeah. 13 REPRESENTATIVE FORRESTER: I guess I said all 14 of that to say this: 15 think you could render an unbiased opinion? 16 Based on your background, do you MR. RANDALL: I have no doubt that I can render 17 an unbiased opinion. 18 I try to do -- everything that I do in life, I try to 19 follow the rules, number one. 20 about what I'm supposed to do, and I try to make sure 21 that everybody is treated the right way. 22 23 I think one thing about me is that I try to learn as much There's no doubt I can be unbiased in any kind of decision that I make. 24 REPRESENTATIVE FORRESTER: 25 SENATOR HUTTO: Thank you. What about renewables and green www.compuscriptsinc.com 2/11/2013 128 1 power in South Carolina? 2 MR. RANDALL: Do they have a future? Yes. Renewables have a future 3 everywhere. 4 union is different. 5 extensively, and I agree with some things where you're 6 talking about the fact that with an RPS, you probably 7 need to look state by state. 8 9 Now, we're different. Every state in the I read the PURC report pretty When you talk renewables, you're talking wind, solar, biomass, geothermal. We're probably not the 10 hottest spot for solar or wind. The best wind spots, 11 from all the data I've seen, is a few miles off the 12 coast. 13 forest, of course, the carbon sinks in South Carolina, 14 which we're very rich in, you've still got to have oil 15 and grease to run fans that go around, so that's still 16 degrading the carbon absorption in the ocean. The wind blows great, but the ocean and our 17 Probably biomass is our most abundant 18 renewable, and even biomass has -- unless the technology 19 gets better and better, you have to have carbon 20 footprint. 21 does that affect the cost of construction, if you're 22 burning up excess wood? 23 stuff that you need for other things to make electric 24 power? 25 My question in one meeting we had is, how When do you get into burning up So I think there's a real need, there's an www.compuscriptsinc.com 2/11/2013 129 1 environmental need, and I think as technology comes on, 2 it's getting better and better. 3 Presbyterian College. 4 deed grant through APPA to study the environmental impact 5 of all sorts of power, but mostly of renewables on an old 6 house. 7 Clinton, we've got lots of old houses and lots of people 8 that don't have as much as others, I wanted to be able to 9 take this, whatever we learned, and maybe apply it to be 10 I've been involved at We commissioned and applied for a And because my interest was in the City of able to help our poorer folks in Clinton. 11 This has studied solar panels, it's studied 12 every kind of awning, and lots of different things. 13 the study is still going on, so we don't have completion 14 yet. 15 with the technology, that's growing in leaps and bounds, 16 is going to be an important part of the mix in the 17 future. The thought is that the combination of renewables 18 19 And SENATOR HUTTO: You're at the college still, right? 20 MR. RANDALL: 21 SENATOR HUTTO: Yes. What have they done there as 22 far as conservation or rehabbing the facilities and dorms 23 with insulation and that type of thing? 24 I'm asking a broader question. 25 you see conservation having in energy consumption? www.compuscriptsinc.com What role do 2/11/2013 130 1 MR. RANDALL: Conservation is important, but I 2 don't think the state can conserve its way out of any 3 kind of energy shortage or energy problems. 4 The college has undergone several steps, mostly 5 using differently lighting, and the times when campus is 6 not in session, cutting off the lights. 7 little scary on parts of the campus, using less heat, 8 cutting the gas back. 9 dorms as to who was the lowest energy user. 10 Makes it a They've even had contests with the I don't know how that works because they're all different sizes. 11 One of the things as mayor and as a member of 12 PMPA, I'm always concerned that we have so much 13 substandard housing where you need funds for energy 14 efficiency and for weatherization, which can help and can 15 conserve. 16 When we're talking about during peak times when 17 everybody with a house that's really sucking up the 18 energy in the summer or winter, whether it be electricity 19 or gas, it's really putting a strain on the system. 20 That's where the conservation part of it is really going 21 to happen. 22 SENATOR HUTTO: 23 All right. 24 else to leave. 25 Anyone else have questions? We're going to ask you to stay and everybody (The Committee went into Executive Session from www.compuscriptsinc.com 2/11/2013 131 1 1:50 p.m. to 1:55 p.m.) 2 SENATOR HUTTO: We are lifting the veil, but 3 we're going into Executive Session, and then we'll 4 probably take lunch. 5 around 2:30, and we'll open up the next round. 6 7 So if you all want to come back at (The Committee went into Executive Session from 1:56 p.m. to 2:05 p.m.) 8 (A recess transpired.) 9 SENATOR HUTTO: Okay. We're back in public 10 session. 11 candidates from the Fifth Congressional District. 12 call on staff to beginning this process. 13 We're going to begin the qualification for We'll (Barbara Ann Brown was duly sworn, after which 14 testimony commenced at 2:45 p.m.) 15 MR. FIFFICK: Ms. Brown, I'm going summarize 16 your educational background, experience, and some other 17 relevant information, just to put it on the record. 18 Ms. Brown obtained a Bachelor of Science Degree 19 from Rollins University, with honors, in 1979, and a 20 Master of Arts Degree in International Relations, Energy 21 Studies, Political Economy Specialty from the University 22 of Southern California, UK branch, in 1985. 23 Ms. Brown obtained a Graduate Certificate in 24 International Family and Community Studies from Clemson 25 University in 2011. Ms. Brown chaired the Florida League www.compuscriptsinc.com 2/11/2013 132 1 of Women Voters, State Board Natural Resource from 1977 2 to 1980. 3 Florida Solar Energy Center and the Florida Governor's 4 Energy Office, and then spent 1981 to 1984, as a 5 recreation program director and foreign media liaison on 6 a United States Air Force base. 7 Ms. Brown then worked for two years for the From 1985 to 1989, Ms. Brown worked for H&S 8 Beer Wholesalers, where she was a public relations and 9 research director. From 1985, to present, Ms. Brown has 10 intermittently performed research for the Kettering 11 Foundation. 12 Air Force base in 1989, analyzing government resource 13 allocations. 14 She worked for the Manpower Office at Shaw From 1989, to the present, Ms. Brown has worked 15 with Clemson University as a youth program adviser and 16 more recently as a County Extension Agent for Economic 17 and Community Development and director for the Laboratory 18 for Deliberative Democracy. 19 Ms. Brown, other than changes that you've 20 submitted, do you have any other changes that you would 21 like to make to your Personal Data Questionnaire that 22 you've already submitted with your application? 23 24 25 MS. BROWN: No, sir. The actual month and year might vary a little bit on some of the -MR. FIFFICK: If you would like, I can get back www.compuscriptsinc.com 2/11/2013 133 1 with you on that. 2 MS. BROWN: I think they're correct. I 3 researched them to the best of my knowledge, but all over 4 the place in Europe, some of the dates might be 5 different. 6 7 MR. FIFFICK: You're still free to update your PDQ after this meeting. 8 MS. BROWN: 9 basically it's what is there. 10 MR. FIFFICK: It may be a month different, but Thank you. At this point, I 11 would request that Ms. Brown's Personal Data 12 Questionnaire be entered into the record and any personal 13 and confidential information be redacted. 14 15 16 (EXH. 7, Personal Data Questionnaire of Barbara Ann Brown, marked for identification.) MR. FIFFICK: As part of our background 17 investigation of the candidate, we've obtained a credit 18 check, driver's license, and SLED check. 19 For the record, I would like to state that the 20 credit check, driver's license check, and SLED check 21 revealed no negative information that should be brought 22 to the attention of the Subcommittee. 23 24 25 Before we begin questioning, do you have a brief statement that you'd like to make? MS. BROWN: No. I'd just thank the Committee www.compuscriptsinc.com 2/11/2013 134 1 for the opportunity to appear in front of you, and I'm 2 excited about what might be ahead. 3 4 MR. FIFFICK: MS. BROWN: Barbara Ann Brown, 20 Naomi Court, in Sumter, South Carolina. 7 MR. FIFFICK: 8 MS. BROWN: 9 MR. FIFFICK: 10 Please state your full name and address for the record. 5 6 Thank you, ma'am. Are you a registered voter? Yes, sir. In which congressional district are you registered to vote? 11 MS. BROWN: 12 MR. FIFFICK: 13 on the Public Service Commission? 14 Five. MS. BROWN: Why are you interested in serving Well, my brief statement really 15 said it. 16 start moving ahead, in spite of the federal government 17 not doing an energy plan, and I thought this might be a 18 way to be part of that. 19 I was excited to hear that we were looking to I always felt that is something our nation 20 needs to take hold of and make changes and move forward 21 and create jobs and have a secure future for all of us. 22 23 24 25 MR. FIFFICK: Have you attended any hearings of the Commission? MS. BROWN: I did attend a hearing that you did on not asking for support from legislators. www.compuscriptsinc.com 2/11/2013 135 1 2 MR. FIFFICK: I meant the Public Service Commission. 3 MS. BROWN: 4 MR. FIFFICK: 5 No. Have you read any of their decisions? 6 MS. BROWN: I did go on the website and did 7 some background reading. 8 Public Service Commission site or the PURC site. 9 MR. FIFFICK: I don't know if it was the It was probably the Public 10 Service site. 11 issues confronting the Commission at this time? 12 How do you plan to get up to speed on the MS. BROWN: Well, I did print off all the laws 13 that we studied for the test and realized there was a lot 14 there. 15 would do the same. 16 procedure manual. 17 over that, and just review everything and know it. 18 I've already learned a lot in the process. I I think I noticed there was a That would be the first step, to go MR. FIFFICK: If you could, please describe 19 your experience or expertise in any of the following 20 areas, and include the time you've been engaged with 21 those issues roughly: 22 issues, consumer protection and advocacy issues, water 23 and waste water issues, finance, economics, statistics, 24 accounting, engineering, or law. 25 MS. BROWN: Energy issues, telecommunication Well, there was a lot of experience www.compuscriptsinc.com 2/11/2013 136 1 with energy issues. 2 education issues. 3 atmosphere where citizens would conserve or use renewable 4 energies or use appropriate energy techniques in their 5 household. 6 Most of it was awareness and Advocacy, in a way, to create an When I managed the Appropriate Technology Small 7 Grants Office for the Governor's Energy Office in 8 Florida, my job, one, was to teach potential applicants 9 how to apply for grants and to, sort of, fulfill all the 10 accountables in the grant proposal. 11 kinds of things, from entrepreneurial inventions for 12 household utensils, cooking utensils that would be more 13 energy efficient, to technology. 14 potpourri of things that could be done. 15 It dealt with all It was a whole It fascinated me that everyday citizens had 16 these ideas that could save energy and could create 17 fuels. 18 integrate the work that I do into all my jobs, so you'll 19 find that when I wrote articles, it was researching. 20 So a lot of the things that I've done, I tend to I can remember when I lived in England with my 21 military husband, and I was serving as a correspondent 22 for Solar Times, I went to a waste facility that was 23 producing methane. 24 after they would produce methane, they used it to heat a 25 brick kiln and made bricks. This was back in '83 or '84, and There was a whole economy www.compuscriptsinc.com 2/11/2013 137 1 that had built up with people making the bricks and 2 building homes. 3 technology to achieve an energy efficient construction 4 material. So there was a whole loop of appropriate So I wrote about that. 5 When I was working as a community youth 6 development agent with Clemson, one of the things that we 7 did early on in the program that I was involved in is try 8 to implement activities in the youth educational 9 programs. I worked with low-income, low-educated 10 communities, and public housing, and a lot of times some 11 of the children may have needed special help with 12 education. 13 they got some of the state of the art things. 14 tended to integrate a lot of my work with energy. 15 But here we found they not only got that, but So I I haven't done a lot with waste, other than the 16 one thing that I mentioned. 17 extension service, we've had programs dealing with water 18 runoff and things like that. 19 involved with that, but it was part of what we promote 20 sometimes with the other agents that are doing those. 21 Being connected with I haven't been directly Most of my finance and accounting things have 22 had to do within grants. Of the 22 years I've worked 23 with extension service, about 19 of those I brought in 24 grants. 25 have to be aware where the expenditures are going and the As the principal investigator for grants, you www.compuscriptsinc.com 2/11/2013 138 1 regulations on how you can spend it and work one-on-one 2 with accounting folks at the university to make sure that 3 things are done correctly. 4 of the other things that you listed. 5 MR. FIFFICK: I'm trying to think of some Water and waste water issues, 6 finance, economics, statistics, accounting, engineering, 7 or law. 8 9 MS. BROWN: My law has been minimal. It's more on protocols and procedures with the Air Force. 10 Particularly when I worked with Manpower. 11 manuals on how things are supposed to be done, and as you 12 analyzed a particular facility, you would go over and see 13 if they were doing those things. 14 the protocol, but it was only on several of the units. 15 think one was chaplains and one was childcare. 16 You read the It's like a law. It's I Then some of the others, it was just one 17 segment of some of the reviews that we did. 18 obviously, with the proposals, you have particular 19 guidelines that you have to go by, too, so they're not 20 legislative laws, but they're procedures that you have to 21 follow. 22 have human rights law and children's rights law course. 23 Particularly with human rights law, you deal a lot with 24 domestic issues and how that might affect society. 25 And then When I was taking the certificate program, I did MR. FIFFICK: Thank you. Are you familiar with www.compuscriptsinc.com 2/11/2013 139 1 the 2006 Advisory Opinion issued by the Review Committee 2 dealing with attendance at legislative receptions? 3 MS. BROWN: Yes. 4 MR. FIFFICK: Are you familiar with the PURC 5 decision at its meeting January 15th of this year, which 6 clarified the 2006 Advisory Opinion? 7 MS. BROWN: 8 MR. FIFFICK: 9 Yes. Have you attended any legislative sessions since receiving the Advisory Opinion? 10 MS. BROWN: No. 11 MR. FIFFICK: Assuming you're serving on the 12 Commission, and you're approached by someone wanting to 13 discuss a matter that is or may become an issue in a 14 proceeding, how would you handle the situation? 15 MS. BROWN: Well, with ex parte rules, you do 16 not, unless they go through the approving procedures 17 where there's a whole criteria of who they inform and 18 when they inform and who needs to be there and who's 19 calling it. 20 can have a hearing. 21 individual, you don't. 22 that, that you've been approached. 23 When that procedure is followed, then you But otherwise, no. MR. FIFFICK: As an Furthermore, you need to report Thank you. Are you aware that 24 Commissioners are subject to the Judicial Code of 25 Conduct, as well as state ethics laws? www.compuscriptsinc.com 2/11/2013 140 1 MS. BROWN: 2 MR. FIFFICK: Yes. Are you affiliated with any 3 political parties, boards, or commissions that would need 4 to be evaluated, if you were nominated and elected? 5 MS. BROWN: I don't think so, other than I put 6 on my application that I had recently joined a group 7 called Applied Solutions, and I might have to check and 8 see who they are more than I know. 9 and they're a nonprofit, but they have a purpose of I've spoken to them, 10 promoting energy efficient programs, which I think that's 11 a good thing. 12 I need to check who funds them. MR. FIFFICK: Okay. Thank you. Do you belong 13 to any organizations that discriminate based on race, 14 religion, or gender? 15 MS. BROWN: 16 MR. FIFFICK: 17 18 No, sir. What do you believe the appropriate demeanor is for a Commissioner? MS. BROWN: Professional. That's one of the 19 things by being a state employee with Clemson, we're 20 drilled from the time we're hired that we may have a 21 certain job. 22 on duty 24/7, and our actions need to appear so. 23 24 25 We represent the state, and basically we're MR. FIFFICK: Does that apply only when you're on the bench? MS. BROWN: I would apply that if I'm filling a www.compuscriptsinc.com 2/11/2013 141 1 state position, whether it's the Commission or an 2 extension agent, whatever, I would apply that to 3 everything. 4 is subject to some kind of reproach, you need to be above 5 the appearance of reproach. 6 7 8 9 10 11 You not only need to not do something that MR. FIFFICK: Thank you. Is there ever a role for sternness or anger in being a Commissioner? MS. BROWN: Well, it's funny. that to any state position. I actually apply I would not say anger, but sternness possibly, yes. MR. FIFFICK: Could you please state the 12 statutorily stated purpose in the operation of the Base 13 Load Review Act of 2007? 14 15 16 MS. BROWN: No. I reviewed the materials, but I don't know that well enough to really -MR. FIFFICK: And as a second question, could 17 you please explain the difference between demand side 18 management programs and energy efficiency programs. 19 MS. BROWN: I read an article that talked 20 about -- and there was a question like that that I 21 answered recently. 22 referring to, but I read an article that talked about how 23 the Commission itself, prior to 2004, had functioned as a 24 demand side organization as far as management, as opposed 25 to when the Office of Regulatory Staff was instituted. I'm not sure if that is what it was www.compuscriptsinc.com 2/11/2013 142 1 It actually helped with energy efficiency as far as 2 management. 3 I believe the article said there had not been 4 any appeals at the time this article was written, and 5 that the summation was that this was a very good move. 6 Now, I don't know if that's what you're referring to 7 because you could also talk about energy efficiency, as 8 far as use of kilowatts and that type of thing, and the 9 demand side being what is the demand for energy use to 10 the population and business needs. 11 MR. FIFFICK: 12 housekeeping questions for you. 13 received the pledge of any legislator prior to this date? 14 MS. BROWN: 15 MR. FIFFICK: Thank you. A few more Have you sought or No, sir. Have you sought or been offered a 16 conditional pledge of support by any legislator pending 17 the outcome of your screening? 18 MS. BROWN: 19 MR. FIFFICK: No, sir. Have you asked any third-parties 20 to contact members of the General Assembly on your behalf 21 before the final and formal screening report has been 22 released? 23 MS. BROWN: 24 MR. FIFFICK: 25 No, sir. Are you aware of any friends or colleagues contacting the General Assembly on your www.compuscriptsinc.com 2/11/2013 143 1 behalf? 2 MS. BROWN: 3 MR. FIFFICK: No, sir. Are you familiar with the 48-hour 4 Rule which prohibits a candidate from seeking pledges for 5 48 hours after the report has been submitted to the 6 General Assembly? 7 8 MS. BROWN: MR. FIFFICK: Do you plan to serve your full term if elected? 11 MS. BROWN: 12 MR. FIFFICK: 13 Yes, sir. Thank you. Mr. Chairman, I have no further questions. 14 15 I didn't remember it was 48 hours. 9 10 I am now. SENATOR HUTTO: Anybody on the Committee have any questions? 16 REPRESENTATIVE SANDIFER: Thank you, Mr. 17 Chairman. 18 you've lived in South Carolina has nothing to do with 19 anything except my own curiosity. 20 Ms. Brown, let me ask you first, how long MS. BROWN: I have lived here longer than 21 anywhere else in my life. We moved here in '84, when my 22 husband was at Shaw. 23 your last military assignment, you stay where you last 24 bought a house, and quite frankly, the weather is much 25 more conducive than Missouri weather. And as quite often happens with www.compuscriptsinc.com 2/11/2013 144 1 REPRESENTATIVE SANDIFER: You indicated that 2 one of your reasons for being interested in this was that 3 you wanted to see the state moving forward with energy 4 plans. Is that a fairly close -- 5 MS. BROWN: Yes, sir. 6 REPRESENTATIVE SANDIFER: Okay. In your role, 7 if you were elected to the Public Service Commission, 8 please tell me how you would propose to do that. 9 MS. BROWN: I think you would be in the middle 10 of what is transpiring. 11 at really closely is, I've always been an educator. 12 That's one reason; extension was a good fit. 13 that Commissioners were even encouraged to share their 14 general knowledge with citizens, like if you go to talk 15 to a rotary club or a group. 16 opportunities to do that. 17 One of the things that I looked But I saw I think that there would be REPRESENTATIVE SANDIFER: What happens when you 18 make that rotary club speech and an individual asks you a 19 question dealing with a case? 20 MS. BROWN: I would have to decline. I was 21 real intrigued with the structure and strictness of the 22 ex parte ruling, and I think that's good. 23 have to work within that. 24 25 REPRESENTATIVE SANDIFER: So you would Then you said that you had promoted energy awareness, conservation, and www.compuscriptsinc.com 2/11/2013 145 1 energy efficiency. In your role as a Commissioner, how 2 would you promote those things? 3 MS. BROWN: I couldn't tell you right now 4 exactly how, other than I think they're important. 5 notice from my background, Deliberative Democracy, 6 citizens need to know information in order to make 7 appropriate decisions. 8 9 You Obviously, if your privileged information is not public, you cannot tell that. But, for example, one 10 of the things that candidates were given to read was the 11 report that the legislature put together. 12 involved with League of Women Voters most of the time 13 I've been in South Carolina. 14 reading that report, and that was very good information. 15 16 I've been I don't remember ever REPRESENTATIVE SANDIFER: Okay. And you're helping to make my point. 17 MS. BROWN: Okay. 18 REPRESENTATIVE SANDIFER: Did you know that 19 that report was not put together by the Public Service 20 Commission? 21 MS. BROWN: I think it was put together by some 22 of the folks involved with the legislature. 23 REPRESENTATIVE SANDIFER: It was. It was put 24 together by the Public Utility Review Committee staff and 25 the Office of Regulatory Staff. Let me go to one other www.compuscriptsinc.com 2/11/2013 146 1 item in that. 2 You said that citizens have knowledge about 3 various and sundry things, and this would help in their 4 need and ability to share that knowledge. 5 were talking about cookware being more energy efficient. 6 Remind you of anything? 7 MS. BROWN: How so? You Well, as far as need, it's a matter 8 of if information is available to citizens to make a more 9 learned decision. Now, I couldn't tell you exactly 10 beforehand what information. 11 predetermined, but the idea that citizens can function 12 better, if they're aware of what's going on around them. 13 I don't have any REPRESENTATIVE SANDIFER: And you also said 14 that you preferred to have an integrated, multiple 15 activity, private, public educational, et cetera, and I'm 16 highlighting it. 17 Now, I'm going to ask you the real question. 18 Did you know that the task of a Commissioner is 19 adjudicatory only? 20 also know that in that position, you do not set public 21 policy? You're not a spokesman, but did you 22 MS. BROWN: 23 REPRESENTATIVE SANDIFER: 24 MS. BROWN: 25 Correct. Well, who does? The legislative branch is how they would set the policy. www.compuscriptsinc.com 2/11/2013 147 1 2 REPRESENTATIVE SANDIFER: But what you've indicated to us in your remarks is totally contradictory. 3 MS. BROWN: I didn't mean them to be. 4 REPRESENTATIVE SANDIFER: Well, they were, and 5 that worries me like crazy when that happens because then 6 we have one branch of government trying to overrule 7 another one. 8 9 MS. BROWN: One of the things that I also saw was that the Public Service Commission and Office of 10 Regulatory Staff work closely together. 11 judge, if you will, you are trying to make decisions. 12 The Office of Regulatory Staff will bring you the 13 information that is deemed necessary, or maybe you've 14 asked for it, however that's put together. 15 manual would clarify that more. 16 And as the The procedure But I also saw that you can ask for other 17 information. 18 ask the Office of Regulatory Staff to get you 19 information. 20 issues that would face you, that could have a bearing on 21 how our state moves forward in energy effectiveness. 22 would be in a position yourself, as a good citizen, to 23 seek the information that you need in order to make 24 appropriate decisions. 25 Now, you can't ask directly, but you can So as the judge of what might be different You Those decisions then become -- as the procedure www.compuscriptsinc.com 2/11/2013 148 1 works out, it becomes part of the overall procedures that 2 are done. 3 REPRESENTATIVE SANDIFER: And I'm going to have 4 stop you because I want to make sure that you understand 5 something. 6 Being in an adjudicatory role means that you 7 simply make rulings on cases that are brought before you. 8 It doesn't mean that you just decide you want to talk 9 about the public policy of this state regarding clean 10 energy. 11 MS. BROWN: Right. 12 REPRESENTATIVE SANDIFER: So the next part is 13 dealing with ex parte communications. 14 that that ex parte prohibition also includes us? 15 MS. BROWN: 16 REPRESENTATIVE SANDIFER: Do you realize Yes. And do you fully 17 understand the difference in the mission of the Public 18 Service Commission and the Office of Regulatory Staff? 19 They're significantly different, so would you describe 20 for me what they might be. 21 MS. BROWN: Well, as you've said, Public 22 Service Commissioners serve as judges on what comes 23 before you with the different utilities, transportation, 24 and different things that you have oversight for. 25 Then the ORS is the information finders. www.compuscriptsinc.com 2/11/2013 149 1 They're the ones that would do the audits, if that's 2 necessary, of the utilities. 3 information to the Commission. 4 the consumer advocates, in a way. 5 They have to be fair to the utilities that have an 6 investment, but they have to be fair to the consumer who 7 wants to use the utilities, so they gather the 8 information for both. 9 They would present the They really are more of REPRESENTATIVE SANDIFER: They have to do both. And then the last 10 question. 11 utility industry. 12 electricity who are not covered under the PSC? 13 We've talked a great deal about the electric Can you name some providers of MS. BROWN: Yes. The electric cooperatives are 14 not, and there was another one listed. 15 think what it was. 16 that's sort of a confession is, I'm still learning. 17 I'm trying to Actually, the one thing, I guess, One thing that I was interested in, and I'm not 18 clear about is, when a government entity, like a city or 19 county, do something, it appeared to me in what I read 20 that what your oversight of that is, is it's more 21 limited. 22 23 24 25 Maybe I'm wrong on that, but I didn't totally understand the difference. REPRESENTATIVE SANDIFER: How about special purpose districts, Piedmont Municipal Power Agency, www.compuscriptsinc.com 2/11/2013 150 1 municipals? 2 3 MS. BROWN: That's probably what I'm referring to. 4 REPRESENTATIVE SANDIFER: Okay. But you did 5 not learn in studying Title 58 of the Code of Laws, 6 whether they were or were not? 7 MS. BROWN: 8 questions. 9 or not. I was reading it, and I had I didn't quite understand whether they were It looked like they weren't, but then there was 10 a place that I read that said you still had oversight on 11 it. I didn't understand what the oversight was. 12 13 REPRESENTATIVE SANDIFER: safety. Thank you, Mr. Chairman. 14 15 Okay. SENATOR HUTTO: Usually it's Thank you, Ms. Brown. Any other members have questions? 16 REPRESENTATIVE FORRESTER: Ms. Brown, could you 17 just share with me what you think your strengths, based 18 on your background, would be, that would make you the 19 best-qualified candidate for this position? 20 MS. BROWN: Well, I can't judge whether I'm the 21 best-qualified because I don't know exactly what the 22 other candidates' qualifications are. 23 I'm well-qualified in the context of, if our 24 state is going to move forward with different energy 25 programs. Some of the things that would come before the www.compuscriptsinc.com 2/11/2013 151 1 Commission, I would have knowledge about, in general, on 2 the quality of it, or should it be a mix of different 3 types of energies, and how one utility's request to do 4 something may or may not limit other fledgling businesses 5 that might be out there in the state. 6 In a general perspective of things that are 7 done for energy conservation, for energy efficiency, for 8 responding to the needs that may be coming down because 9 of climate change, and those regulations, that general 10 knowledge, I've done a lot of work within. 11 have changed somewhat, but interestingly, much of the 12 information is still very valid. 13 Now, things Some of the things that I learned in the late 14 '70s, are still things that need to be implemented across 15 America. 16 move forward in that area. 17 qualification is the knowledge of that state of the art 18 need when it comes to conservation and efficiency and 19 reducing carbon footprint. 20 I'm well-qualified, if the state is going to That's probably my biggest The other thing, and I'm very cognizant to 21 Representative Sandifer's concern, and I didn't mean to 22 put it across like that, but utilities can play a 23 wonderful part in educating the public. 24 that as they present their plan and their reasons for 25 maybe rate increases, they may say, we want to do this. www.compuscriptsinc.com I would presume 2/11/2013 152 1 And part of that could be more conducive to public input 2 and more conducive to working with the public. 3 stories of people wanting to do things that were 4 promoting energy efficiency, and they can't do it because 5 of the current regulations. 6 I hear Now, the Commission might not be able to make a 7 change in that, but it's part of the public record at 8 least. 9 I'm good at working with people. 10 Sometimes you have to bring out the information. I'm very good at awareness of community energy needs. 11 REPRESENTATIVE SANDIFER: Just out of 12 curiosity, how would you propose to reduce the carbon 13 footprint? 14 MS. BROWN: I personally think citizens need to 15 be more involved. 16 not convinced on how to use certain things right now 17 because I haven't delved into economics, but there's 18 processes there that have shown that it would reduce 19 emissions in coal plants. 20 It comes down to economics, and I'm Now, I've also been told that those aren't 21 necessarily economical, but I know from my military work 22 that the military has made a commitment to use renewable 23 fuels. 24 South Carolina get in the position that we will sell our 25 military fuels that we produce right here? If we're able to hold onto our bases, why can't www.compuscriptsinc.com So there's no 2/11/2013 153 1 simple answer to a lot of these things. 2 You have to look at the holistic situation, and 3 that was one of the things in your questionnaire of the 4 different categories that you listed. 5 on that. 6 work together. 7 but if you can get answers on those aspects from the 8 Office of Regulatory Staff, and wherever they get their 9 answers, you would be in a better position to make those 10 Those are holistic components that all need to Now, I'm not an expert in all of those, appropriate decisions. 11 REPRESENTATIVE FORRESTER: 12 MS. BROWN: 13 I'll commend you circle a lot. 14 Thank you. And forgive me if I talk around the It comes with the deliberative dialogue. SENATOR HUTTO: What do you see as the future 15 of green energy in this state? 16 MS. BROWN: I think we have a really good 17 future. 18 there. 19 need to do a mix, and there's a high future for nuclear 20 in this state, that intrigued me because those were the 21 conclusions in the '70s. 22 SENATOR HUTTO: 23 Now, we can't ignore the other things that are If we accept the report that was written about we Do you consider nuclear a renewable? 24 MS. BROWN: Yes. 25 SENATOR HUTTO: And what about citizens putting www.compuscriptsinc.com 2/11/2013 154 1 solar panels on their house, and if they generate more 2 electricity than they might need during certain times of 3 the day, should they be able to sell that back onto the 4 grid? 5 MS. BROWN: Theoretically, yes. But you can't 6 just sell it without the whole system being set up to do 7 that. 8 a simple answer. 9 10 11 That's part of the holistic questioning. SENATOR HUTTO: It's not Do you know what the Universal Service Fund is? MS. BROWN: Not well enough to explain it. 12 think it has something to do with what the utilities 13 might have, but I'm not sure. 14 15 16 17 SENATOR HUTTO: All right. I We'll ask you to stay put and everybody else to leave. (The Committee went into Executive Session from 3:22 p.m. to 3:28 p.m.) 18 SENATOR HUTTO: 19 (Sarah Bramlett Nuckles was duly sworn, after 20 21 Back in open session. which testimony commenced at 3:28 p.m.) MS. ANDERSON: Good afternoon. I'm going to 22 give a very brief overview of your educational and 23 experience background. 24 25 Ms. Nuckles attended Columbus Junior College and Indian River Community College and obtained a www.compuscriptsinc.com 2/11/2013 155 1 Business Administration degree from Florida Atlantic 2 University. 3 She subsequently enrolled in coursework, before 4 obtaining a Masters in Business Administration, at 5 Florida Atlantic University and is currently pursuing her 6 MBA at Winthrop. 7 proprietor of Pencil Heads, LLC. 8 with Capital Management and Engineering from 2005 to 9 2008. 10 Since 2008, she has been the sole She has been employed From 2004 to 2005, she was a planning intern for the City of Rock Hill. 11 She's had various positions, such as accounting 12 clerk, budget officer, and internal auditor with the Fort 13 Pierce Utilities Authority, in Fort Pierce, Florida. 14 She's also had other work experience with managing truck 15 and car dealerships. 16 company and held other financial and accounting 17 positions. 18 She was co-owner of a foreign She served on the Policy Committee for the 19 Metropolitan Transit Commission for the Charlotte Area 20 Transportation Service. 21 Carolina Department of Transportation Commission from 22 2008 to 2012. 23 She also served on the South Do you have any changes that you would like to 24 make to your Personal Data Questionnaire that you 25 submitted with your application, other than the changes www.compuscriptsinc.com 2/11/2013 156 1 that you've already submitted? 2 MS. NUCKLES: I would just like to make one 3 comment under Question 8, where it asks, "Have you been 4 employed or held any position in any of the following 5 areas?" 6 I checked "Engineering," but I did not mean to 7 infer that it was in the professional capacity of an 8 engineer. 9 close-working capacity with engineers all through my long 10 11 It was more as an associate, in a career experience. MS. ANDERSON: I would ask that Ms. Nuckles' 12 Personal Data Questionnaire be entered into the record 13 with any confidential information being redacted. 14 15 16 (EXH. 8, Personal Data Questionnaire of Sarah Bramlett Nuckles, marked for identification.) MS. ANDERSON: As part of our background 17 information of Ms. Nuckles, we obtained a credit check, 18 driver's license, and SLED check. 19 a personal nature, and we request that they be taken up 20 in Executive Session at the appropriate time. 21 22 23 Staff has questions of Before we begin questioning, do you have a brief statement that you would like to make? MS. NUCKLES: Yes, ma'am. I'm not sure what 24 you mean by brief, but I've been studying state and 25 national issues, and certainly one of the big issues for www.compuscriptsinc.com 2/11/2013 157 1 our state is greenhouse gas, air pollution, and all that. 2 One thing that I noted recently, I don't know if any of 3 you saw the picture of the people in Beijing, China, with 4 the masks on their face. 5 Since I live in York County, we've had 6 air-quality issues there. 7 state that is in what's called nonattainment under EPA 8 rules. 9 format there for industries that want to locate in York 10 11 We are the only part of the We're already under, sort of, a cap and trade County. But anyway, Beijing's air quality index is over 12 700, in comparison to the Charlotte metro regional area, 13 including York County, our worse days are in the 100s. 14 The reason that I'm stating this is not to knock China, 15 but I'm concerned that when we're looking at state and 16 national energy policies, and they're looking at it right 17 now, EPA has just passed new rules. 18 going to talk about it tomorrow night, and I think the 19 westerly winds that blow around our continent, blow 20 across the United States, and they come here. 21 The President is So we are subsidizing, I think, the cleaning up 22 of dirty air that comes around the world, and I don't 23 mean for this to sound farfetched. 24 possibility that we might be exporting liquified natural 25 gas, I thought, if we do that, I'm concerned that it When I looked at the www.compuscriptsinc.com 2/11/2013 158 1 certainly could increase our domestic gas cost which 2 could increase our cost to consumers in South Carolina, 3 as well as other utilities all over the nation. 4 And perhaps we might, as a body or legislative 5 group or congressional delegation, think about putting 6 maybe a floor on that liquified natural gas, so our 7 domestic supply remains in a fairly stable price range 8 and perhaps some possible restrictions that those to whom 9 we sell this LNG, maybe they need to use it for reducing 10 that same air pollution in their country. 11 big, and I tend to think on a global scale, but it all 12 boils down to you and me and what I pay on my electric 13 bill. Thank you. 14 MS. ANDERSON: 15 your home address for the record. 16 MS. NUCKLES: Please state your full name and My full name is Sarah Levinia 17 Bramlett Nuckles. 18 Rock Hill, South Carolina, 29732. 19 MS. ANDERSON: 20 MS. NUCKLES: 21 MS. ANDERSON: 22 My address is 1335 Quiet Acres Circle, Are you a registered voter? Yes, ma'am. In which congressional district are you registered to vote? 23 MS. NUCKLES: 24 MS. ANDERSON: 25 That may sound Fifth. Why are you interested in serving on the Public Service Commission? www.compuscriptsinc.com 2/11/2013 159 1 MS. NUCKLES: Well, it's really a natural fit. 2 I've been involved in infrastructure since the '70s, and 3 spent five years as an internal budget officer for the 4 Fort Pierce Utilities, which was electric generation, 5 distribution, and transmission, waste water treatment and 6 collection, water with wells and distribution, natural 7 gas. 8 9 I really became interested in this at that time. That was my first contact in infrastructure. Then 10 when I was in West Palm Beach, and I became an elected 11 official down there, I had involvement in -- well, we had 12 water shortage issues due to rapid development. 13 cable issues with cable franchises. 14 interaction with FP & L. 15 being built, St. Lucie One and Two, affected our power 16 supplies and sources of power. 17 We had We had some The nuclear plants that were So then moving forward, I became involved in 18 transportation when I served in that little intern 19 capacity with the MPO in Rock Hill, and infrastructure is 20 so critical. 21 here, but I see it as an incredibly critical and 22 strategic part of everything we do in this part of the 23 government function. 24 government, and I feel very strongly that our 25 infrastructure needs to be preserved and maintained It's just -- I'm preaching to the choir It's the core function of www.compuscriptsinc.com 2/11/2013 160 1 properly. 2 I spoke about that a lot while I was at the 3 DOT. I think it's a very exciting time for our nation in 4 the energy arena, you know, the shale oil and fracking. 5 I listened to a webinar on hydraulic fracking the other 6 day. 7 independent, which is great, and I'm very excited. 8 think a lot of our industries are cutting edge, in terms 9 of efficiency. We're at the threshold of becoming energy 10 I You know, Malcolm Baldridge, and all of those 11 wonderful quality awards and things that are so critical, 12 and I just want to be part of that, and I want to be a 13 part of it with people who are intelligent and 14 knowledgeable. 15 encourages as much education as possible in this arena. 16 I thank you for that. 17 18 I really appreciate that Act 175 MS. ANDERSON: Have you attended any hearings of the Commission? 19 MS. NUCKLES: Yes, ma'am. I attended the 20 Integrated Resource Plan Hearing for SCE&G in Columbia. 21 It was very interesting. 22 also attended the water hearing in Tega Cay, and I think 23 a decision has been issued recently on that. 24 25 MS. ANDERSON: I tried to scan over Duke's. Have you read any Commission decisions? www.compuscriptsinc.com I 2/11/2013 161 1 MS. NUCKLES: Yes, ma'am. I read the decision 2 on the water hearing, and I'm following one for an issue 3 for resolute forest products that I think is really 4 interesting. 5 6 MS. ANDERSON: How do you expect to get up to speed on the issues in front of the Commission? 7 MS. NUCKLES: 8 MS. ANDERSON: 9 MS. NUCKLES: You mean should I be elected? Yes, ma'am. Well, first of all, I'm going to 10 continue, during this process, you know, until April 1st, 11 if I'm so fortunate to be considered as an eligible 12 candidate, I will continue to follow the news. 13 lot of blogs and energy magazines, and if I did become 14 your next Public Service Commissioner, I would 15 immediately grab the, not grab, but sit down with the 16 Public Service Commission staff and the ORS staff and do 17 a thorough briefing on all of the docket. 18 MS. ANDERSON: I watch a Please describe your experience 19 or expertise in any of the following areas, and include 20 time that you've been engaged in the issues: 21 telecommunications, consumer protection and advocacy, 22 water and waste water, finance, economics, statistics, 23 accounting, engineering, or law. 24 MS. NUCKLES: 25 Okay. several classes in statistics. Energy, Well, in finance, I've had One of the interesting www.compuscriptsinc.com 2/11/2013 162 1 things I noted at the IRP for SCANA was regression 2 analysis, which I just happened to do that this last 3 semester. 4 and any of you that are smiling, know what I'm talking 5 about. 6 It was really exciting. I don't recommend it, I'm planning to write another research paper. 7 By the way, I got an A on that other one, on sustainable 8 operations. 9 think that's an interesting area. I really like operations management. I I've had many, many 10 years in the finance and accounting arena and internal 11 auditing, and I served in positions as controller, as my 12 record indicates, and budget officer. 13 The internal auditing was great because I 14 actually went out to the distribution centers, and I 15 created a statistical analysis for the parts, and there 16 are lot of parts in distribution centers. 17 top of the fuel oil tank at the end of the year to verify 18 the measurement of fuel for the electric generation 19 facility. 20 I climbed on In the engineering area, I was very fortunate 21 to have close association with engineers at the DOT when 22 I served as the Commissioner, and also when I was with 23 Capital Management and Engineering. 24 Penny Sales Tax Project for York County, which has done a 25 great job in getting our transportation up to snuff. We managed the One www.compuscriptsinc.com 2/11/2013 163 1 Let's see, what else? 2 3 MS. ANDERSON: Economics, water, waste water issues, consumer advocacy. 4 MS. NUCKLES: The water, waste water issue, of 5 course, all of that was tied into the Fort Pierce 6 Utility, and we remember American Water Works Association 7 and those professional groups like NARUC and American Gas 8 Association. 9 Also, when I was in West Palm as a 10 Commissioner, that was about the time, I'm trying to 11 remember now, that the groundwater regulations were 12 issued, federal regs, you know, groundwater runoff, which 13 are huge. 14 Palm Beach because it's a rate issue. 15 rates that were added to the residents' bill for that 16 area. 17 And that was a huge issue in the City of West We had to approve We also had a problem with rapid development, 18 and this has occurred in South Carolina, too. 19 30 percent increase in population over the past couple 20 decades. 21 it's transportation or utilities, you have to -- well, 22 it's a tough deal. 23 So I was involved in those areas. 24 I'm trying to remember. 25 We had a In order to provide infrastructure, whether enough for now. You have to really be able to do it. I've probably said I've lived a long time, so I've touched www.compuscriptsinc.com 2/11/2013 164 1 a lot of areas. 2 MS. ANDERSON: Are you familiar with the 2006 3 Advisory Opinion issued by the Review Committee dealing 4 with attendance at legislative sessions? 5 MS. NUCKLES: 6 clarifying, I guess -- 7 MS. ANDERSON: 8 MS. NUCKLES: 9 recently. 10 11 Yes, ma'am. And I also noted the I'll have a follow up. -- statement that you all issued Yes, I am. MS. ANDERSON: And so you're also familiar with our follow up at the January 15th meeting this year. 12 MS. NUCKLES: Yes, ma'am. I believe it 13 indicated that we were not to attend any legislative 14 receptions, particularly if there were any lobbyists 15 there or if they were on the legislative website or on 16 the calendars. 17 to the geographic delegation meeting. 18 I think, basically, all we could do is go MS. ANDERSON: Since that time, since you first 19 received the 2006 Advisory Opinion, did you attend any 20 legislative receptions? 21 MS. NUCKLES: 22 MS. ANDERSON: No. On or after January 15th, have 23 you attended any legislative receptions or any 24 legislative caucus meetings, other than the delegation 25 meeting? www.compuscriptsinc.com 2/11/2013 165 1 MS. NUCKLES: 2 MS. ANDERSON: No, ma'am. Assuming you are serving on the 3 Commission, and you are approached by someone wanting to 4 discuss a matter that is or may become an issue in a 5 proceeding, how would you handle the situation? 6 MS. NUCKLES: 7 MS. ANDERSON: Would you repeat the question? Assuming that you're serving on 8 the Commission, and you're approached by someone who 9 wants to discuss a matter that is or may become an issue 10 11 in a proceeding, how would you handle the situation? MS. NUCKLES: I really like the part of Title 12 58 that deals with ex parte communication. 13 approached me, I would immediately try to stop them from 14 making any comment. 15 they were successful, I would immediately report it to 16 the staff in ORS, and then all other parties that would 17 be involved would have to be briefed. 18 If someone If they did make the comment, and It would be in written form, and all of them 19 would have to be formally notified according to the 20 procedure identified. 21 MS. ANDERSON: Are you aware that the 22 Commissioners are subject to the Judicial Code of 23 Conduct, as well as state ethics laws? 24 MS. NUCKLES: 25 MS. ANDERSON: Yes, ma'am. Are you affiliated with any www.compuscriptsinc.com 2/11/2013 166 1 political parties, boards, or commissions that would need 2 to be reevaluated, if you're nominated and elected? 3 MS. NUCKLES: No, ma'am. I was an officer 4 several years ago in the county where I live, but because 5 the DOT position was nonpartisan, I felt that I wanted to 6 assure my constituents that I was nonpartisan, so I 7 resigned from that office or position. 8 pay my dues, but I believe that's allowed. 9 MS. ANDERSON: I do, however, Do you belong to any 10 organizations that discriminate based on race, religion, 11 or gender? 12 MS. NUCKLES: 13 MS. ANDERSON: 14 Absolutely not. What is the appropriate demeanor for a Commissioner? 15 MS. NUCKLES: I always see the picture -- first 16 of all, it's quasi-judicial, so the Commissioner is much 17 like a judge. 18 picture of Lady Justice holding the scale of justice and 19 the blindfold, and that indicates fairness, impartiality, 20 and I believe that my demeanor should be such that in any 21 capacity or activity as a Commissioner, I should hear 22 only those things presented in the formal context 23 identified by law. 24 25 It's like a courtroom, and I look at the In other words, in the hearings and briefings, and so on. I also believe there is a need to demonstrate www.compuscriptsinc.com 2/11/2013 167 1 integrity, both in your personal life and your 2 professional life, and I like to believe that I've done 3 that and will do that, and compassion and fairness, and 4 comport myself in a way that would be befitting of a 5 position, such a high position. 6 MS. ANDERSON: So the demeanor, is that 7 something that would apply just while you're on the 8 bench? 9 MS. NUCKLES: 10 MS. ANDERSON: 11 All the time. Is there ever a role for sternness or anger with Commissioners? 12 MS. NUCKLES: Not anger, but I think sternness 13 might be necessary at times. 14 time anyone is providing testimony or someone who might 15 be sitting and listening, an observer, you might have to 16 take some necessary action, probably through the 17 chairman. 18 MS. ANDERSON: I think in a courtroom, any Please explain the role of the 19 Commission in regulating government-owned service 20 providers. 21 MS. NUCKLES: 22 MS. ANDERSON: 23 24 25 It does not. What is the purpose of a reserved margin for an electric utility? MS. NUCKLES: The reserved margin is that margin, and I think, let's just say we use -- the average www.compuscriptsinc.com 2/11/2013 168 1 is between 12 and 18 percent, identified in the PURC 2 report. 3 now. 4 unexpected failures of equipment on our Base Load Plan. I think it's running right around 10 percent That's a margin that's out there to provide for 5 It could be a sudden spike caused by something 6 that occurs a long way away and floats back through the 7 grid to our utilities, so it's there as a safety backup. 8 9 MS. ANDERSON: questions. I have a few housekeeping Did you make any contributions to members of 10 the General Assembly within six months of filing your 11 application? 12 MS. NUCKLES: 13 MS. ANDERSON: No, ma'am. Have you made any contributions 14 to members of the General Assembly since filing your 15 application? 16 MS. NUCKLES: 17 MS. ANDERSON: 18 No, ma'am. Have you sought or received the pledge of any legislator prior to this date? 19 MS. NUCKLES: 20 MS. ANDERSON: No, ma'am. Have you sought or been offered 21 a conditional pledge by any legislator pending the 22 outcome of your screening? 23 MS. NUCKLES: 24 MS. ANDERSON: 25 No, ma'am. Have you asked any third-parties to contact members of the General Assembly on your behalf www.compuscriptsinc.com 2/11/2013 169 1 before the final and formal screening report is released? 2 MS. NUCKLES: 3 MS. ANDERSON: No. Are you aware of any friends or 4 colleagues contacting members of the General Assembly on 5 your behalf? 6 MS. NUCKLES: 7 MS. ANDERSON: No, ma'am. Are you familiar with the 8 48-hour Rule which prohibits a candidate from seeking 9 pledges until 48 hours after the report has been 10 submitted to the General Assembly? 11 MS. NUCKLES: 12 MS. ANDERSON: 13 MS. NUCKLES: 15 MS. ANDERSON: 17 Would you plan to serve a full term, if elected? 14 16 Yes. Yes, ma'am. Thank you, Mr. Chairman. No further questions. SENATOR HUTTO: Ms. Nuckles, if elected to the 18 Public Service Commission, you would have the title of 19 Commissioner, and you previously had the title of 20 Commissioner with the DOT. 21 I want you to explain to me, even though the 22 title is the same, do you understand the distinction 23 between those two roles? 24 25 MS. NUCKLES: The fact of the distinction is one of the reasons that I'm sitting here right now. www.compuscriptsinc.com The 2/11/2013 170 1 DOT Commission did not have, maybe it's better to say 2 they didn't have this process. 3 process. 4 There was a selection Yes, we took a test, and we were vetted. They didn't have this quasi-judicial role or 5 Judicial Code of Conduct. I want to be careful what I 6 say. 7 DOT Commissioner that cannot occur as a Public Service 8 Commissioner. 9 commissions in the state as possible could have this same I thought there was some things that occurred as a For instance, I wish that as many of our 10 or similar process. 11 but the idea of ex parte, for instance, I think that's 12 great. 13 accountable way. 14 should know what's going on, so I'm going to be very 15 careful, and say that I like this process better. 16 better fit for who I am as a Public Service Commissioner. 17 I know they're not investor-owned, I think it's great that it's done in an open and I believe in that. SENATOR HUTTO: I think all parties It's a As a DOT Commissioner, you were 18 outspoken and authored articles that were somewhat 19 critical or, at least, challenged other sitting members 20 of the Commission, which was perfectly your right to do, 21 but I want to make sure you understand that this 22 Commission is different than that Commission. 23 In this Commission, you would not be writing 24 your own articles or doing that type of thing. 25 comment on that? www.compuscriptsinc.com Can you 2/11/2013 171 1 2 MS. NUCKLES: And I did comment on that. 3 4 Yes, sir. SENATOR HUTTO: I believe you did and very thoughtfully. 5 MS. NUCKLES: And I wanted you to know that 6 because I know that I have some notoriety, I guess, for 7 doing so. 8 fact that we didn't have the kind of process that you 9 have here, and I felt things were happening that were of 10 That was because of some frustration over the great concern and that were harmful to our state. 11 And I have already pledged, and it's a sworn 12 document, that I would not do so were I to become a 13 Commissioner because I look at it as a judge. 14 judge, you don't discuss cases outside of the courtroom. 15 You don't write letters to the editor. 16 of that, and I can assure you that I'm quite capable of 17 that. 18 19 SENATOR HUTTO: You don't do any Other members have any questions? 20 REPRESENTATIVE SANDIFER: 21 Chairman. 22 I'll start by going down that path. 23 As a Thank you, Mr. Ms. Nuckles, several questions, please, and First of all, how did you become a Commissioner 24 for the DOT? I can't remember when we transitioned from 25 one methodology to another, that's why I'm asking. www.compuscriptsinc.com 2/11/2013 172 1 MS. NUCKLES: I think it was June of 2007. Act 2 114 was signed into law. 3 Act 175, that was adopted by PURC, and that required the 4 new selection process, and I had an interest. 5 That was the reform, similar to I had served on the Metropolitan Planning 6 Organization, and I had previous experience in Palm Beach 7 County and in York County, and I was very interested in 8 transportation, so I decided to apply. 9 And people said, Well, who put you up to this? 10 I said, No one. 11 it, so I did apply and went through the process and 12 served from 2008 to 2012. 13 I'm very interested and passionate about REPRESENTATIVE SANDIFER: That answers my 14 question. 15 started, it was a gubernatorial appointment. 16 17 18 I could not remember whether, at the time you MS. NUCKLES: Well, I'm proud to say I was in the first batch under Act 114. REPRESENTATIVE SANDIFER: Okay. I'm going to 19 just keep going, if I may. 20 Commissioners of the DOT who served with you, what kind 21 of recommendation do you think I would get for you? 22 MS. NUCKLES: If I were to go to all the I think they would say, as 23 they've said to me, that they thought I was very 24 knowledgeable. 25 important questions, and I did before every meeting. They thought that I asked a lot of www.compuscriptsinc.com 2/11/2013 173 1 I asked a lengthy series of questions based on 2 the agenda, got the answers from staff, and had them 3 distributed to all the other Commissioners. 4 like my detailed questioning during meetings. 5 them did not, some didn't mind, you know, you'd have to 6 ask them. 7 difficult for me, and it was difficult for them, and I 8 think that they did not want a lot of the work of the 9 Commission to be open, and that was my big concern. 10 11 They did not Some of I understand it was difficult, and it was And that is completely the opposite of the way the Public Service Commission works. 12 REPRESENTATIVE SANDIFER: In your opening 13 statement, you said that your primary goal was air 14 quality. 15 16 MS. NUCKLES: I said -- well, go ahead. Yes, sir. 17 REPRESENTATIVE SANDIFER: Does the Commission 18 set up the standards by which all of that is measured or 19 handled? 20 MS. NUCKLES: No, sir. It does not. It's regulated in our state through DHEC. The EPA 21 does. That's 22 the way I saw it operating up in York County, and then we 23 have to, you know, comply. 24 comply. 25 emissions this much, or we're going to have to do a cap Our generating plants have to They're going to say you have to reduce your www.compuscriptsinc.com 2/11/2013 174 1 and trade, or we're going to have penalties. 2 reduce your emissions, one or the other. 3 a Duke University survey that said people prefer 4 greenhouse gas controls rather than cap and trade. 5 REPRESENTATIVE SANDIFER: You have to And I just saw But as a policy making 6 body, if those edicts come down, and I call them edicts 7 from EPA, does the Public Service Commission have that 8 authority to make policy to conform? 9 MS. NUCKLES: 10 11 I don't think it does. REPRESENTATIVE SANDIFER: hope not. 12 MS. NUCKLES: 13 REPRESENTATIVE SANDIFER: 14 15 Well, I certainly Thank you. The legislative body is the policy making body in this state. MS. NUCKLES: It's always been. They tell you 16 what to do, and you either do it, or you don't do it. 17 don't have a whole lot of control in that. 18 REPRESENTATIVE SANDIFER: We Also, in your opening 19 remarks you said you would, if elected, one of the early 20 things that you would do is sit down with the PSC and ORS 21 staffs in order to be taught. 22 MS. NUCKLES: 23 REPRESENTATIVE SANDIFER: To get current. All right. 24 believe that sitting down with the staff at ORS 25 constitutes an ex parte communication? www.compuscriptsinc.com Do you 2/11/2013 175 1 2 MS. NUCKLES: I mean, it could, I guess. can't answer that clearly at this time. 3 REPRESENTATIVE SANDIFER: I I'm sorry. And I wrote myself a 4 note as you spoke about your adventure climbing on top of 5 a fuel tank because you were not sure that the 6 appropriate amount of gallons were shown. 7 it, it doesn't matter why, but I guess my overriding 8 question is, as a PSC Commissioner, would you allow the 9 staff to do their job, but also allow the Office of 10 Regulatory Staff to do theirs? 11 and assume their duties for them? 12 MS. NUCKLES: 13 Or are you going to try No, sir. I absolutely would not assume their duties. 14 15 I read into REPRESENTATIVE SANDIFER: would. I didn't say you 16 I asked if you would try. MS. NUCKLES: No, of course not. Going back to 17 the climbing on top of the oil tank, it was a requirement 18 for the audit. 19 of oil was shown on the accounting records. 20 REPRESENTATIVE SANDIFER: 21 You had to verify that the actual amount But there was no staff that could do that? 22 MS. NUCKLES: I was the internal auditor. 23 REPRESENTATIVE SANDIFER: All right. Cleared 24 that up. And as you go into a hearing as a Commissioner 25 in this environment, unlike DOT, would you be able to www.compuscriptsinc.com 2/11/2013 176 1 bring a timely, totally unbiased opinion, and act or 2 react upon the evidence that is demonstrated for you? 3 MS. NUCKLES: Yes, sir. I believe I can, and I 4 have stated that. 5 why I wanted you to know that I am a very fair and 6 impartial person, I believe. 7 I know you're concerned, and that's REPRESENTATIVE SANDIFER: Attendance at 8 functions -- when Ms. Anderson was questioning you, there 9 was a point at which you paused, and you said, I think 10 I've said all I need to say. 11 to tell us more. It seemed as if you wanted I'd like to hear the more. 12 MS. NUCKLES: 13 about when as I was an officer? 14 I don't know. REPRESENTATIVE SANDIFER: Was it the part No. This was in 15 dealing with the two rulings of the PURC and whether or 16 not you had attended functions either during or after the 17 two rulings. 18 MS. NUCKLES: No, sir. 19 mind. 20 obviously a very verbal person, and I don't want to wear 21 you down. 22 but I'm pleased to answer any further questions that you 23 may have. 24 25 I have not done that. That's very clear in my I just feel like I'm That would be the only reason that I stopped, REPRESENTATIVE SANDIFER: Okay. I thought there was more to the story, and I wanted to hear it. www.compuscriptsinc.com 2/11/2013 177 1 2 3 MS. NUCKLES: No, sir. I just have to catch myself sometimes. REPRESENTATIVE SANDIFER: Okay. You have 4 indicated that you are a dues-paying member of the 5 Republican Party. In what -- 6 MS. NUCKLES: York County. 7 REPRESENTATIVE SANDIFER: 8 that, in itself, is a violation? 9 MS. NUCKLES: 10 11 12 13 14 15 it is a violation. Did you know that Sir, I believe -- I don't believe I looked it up this morning. REPRESENTATIVE SANDIFER: It's a political organization. MS. NUCKLES: Yes, sir. But there is an exception area in the law. REPRESENTATIVE SANDIFER: This is all 16 candidates in subsection (a), solicits funds or pays an 17 assessment to or makes a contribution to a political 18 organization or candidate. 19 MS. NUCKLES: The ethics law goes further to 20 say with the exception of section (b)(1), or something, 21 and then it goes down, and it says, any nonjudicial, non 22 judge candidate. 23 mean that that was an exception to the rule. 24 REPRESENTATIVE SANDIFER: 25 And I think I was interpreting that to If you're on the Commission, you cannot. www.compuscriptsinc.com 2/11/2013 178 1 MS. NUCKLES: On the Commission. 2 REPRESENTATIVE SANDIFER: All right. One 3 question that was asked, and this has been asked of 4 almost all candidates today, is the relationship with the 5 PSC for government-owned communication, and you indicated 6 that there was none. 7 MS. NUCKLES: I believe I recall reading that, 8 for instance, the Budget and Control Board has a 9 communication system. 10 authority over that. 11 I don't believe the PSC has any REPRESENTATIVE SANDIFER: Would it surprise you 12 to know that a communications company may apply to the 13 PSC to determine whether or not an area is served or 14 unserved? 15 MS. NUCKLES: No. I would not be surprised 16 because I thought that under Title 58, part of the 17 function is to determine geographic territories. 18 REPRESENTATIVE SANDIFER: But this is a 19 different section of the code altogether than geographic 20 territories. 21 Thank you. Okay. That's all I have, Mr. Chairman. 22 SENATOR HUTTO: Anyone else? 23 REPRESENTATIVE FORRESTER: Ms. Nuckles, are you 24 aware there are certain utilities that aren't covered 25 under the purview of the Public Service Commission? www.compuscriptsinc.com 2/11/2013 179 1 2 MS. NUCKLES: Municipalities, political subdivisions, they are not. 3 REPRESENTATIVE FORRESTER: You have a lot of 4 background in utilities. 5 strengths that would make you the best candidate for this 6 position? 7 MS. NUCKLES: What would you say are your Well, I would build on that 8 background and enhance it with continuous education. 9 a lifelong learner. I'm Here I am at school at my age, and I 10 would continue to build on that knowledge and hopefully 11 be able to apply it. 12 And you say my strengths? I do have the 13 knowledge. I have the leadership background. 14 it is somewhat broad in scope, which I think is important 15 because I have nonprofit as well as profit business 16 background. 17 the Commission. And I think that would be very beneficial to 18 REPRESENTATIVE FORRESTER: 19 SENATOR HUTTO: 20 21 I believe Thank you. Do you know what the Universal Service Fund is? MS. NUCKLES: Yes. That's a very important -- 22 I believe it's the Telecommunications Act of 1996, set up 23 on a federal level. 24 contributions from communications into a fund, I believe 25 it's administered by the ORS in our state, to provide It essentially is set up with www.compuscriptsinc.com 2/11/2013 180 1 either base land line or cell phone service to those who 2 meet certain needs criteria, and it is coordinated 3 through a number of other agencies in the state, and they 4 have the Lifeline and Link Up. 5 6 It's to make sure that people can communicate and have emergency access. 7 SENATOR HUTTO: It's a good program. All right. We're going to ask 8 you to stay and everybody else to leave. 9 more questions. 10 11 We have a few (The Committee went into Executive Session from 4:06 p.m. to 4:14 p.m.) 12 SENATOR HUTTO: 13 (Mark Christopher Bruce was duly sworn, after 14 Back on the public record. which testimony commenced at 4:15 p.m.) 15 MS. ANDERSON: First of all, I'm going start 16 off by giving a brief summary of your educational and 17 experience background. 18 Mr. Bruce attended Clemson University and 19 received a Bachelor of Science degree in computer science 20 from the University of South Carolina. 21 a number of continuing education courses for the past 22 five years, and he currently works, well, he's the 23 founder and executive director of Santee Riverkeeper 24 Alliance. 25 for Blackbaud, in Charleston, and in the past he's had a He's been there since 2008. www.compuscriptsinc.com He has completed He's also worked 2/11/2013 181 1 number of different employment experiences, including a 2 lot of IT stuff, such as automatic information systems to 3 maximize inventory management, mortgage origination 4 systems, application to support activities for a 5 portfolio, application strategy, management of mutual 6 funds, and some other IT areas, and some consulting as 7 well. 8 Have you seen your Personal Data Questionnaire? 9 MR. BRUCE: 10 11 Yes. MS. ANDERSON: Are there any changes that you would like to make? 12 MR. BRUCE: Yes. I'd like to remove the 13 consumer protection and advocacy issues. 14 I did was insignificant enough not to be on here. 15 MS. ANDERSON: That work that I would request that Mr. Bruce's 16 Personal Data Questionnaire be entered into the record 17 with any confidential information redacted. 18 19 (EXH. 9, Personal Data Questionnaire of Mark Christopher Bruce, marked for identification.) 20 MS. ANDERSON: As part of our background 21 investigation, we obtained a credit check, driver's 22 license, and SLED check. 23 confidential and personal nature, and we'll request that 24 they're taken up in Executive Session at the appropriate 25 time. Staff has questions of a www.compuscriptsinc.com 2/11/2013 182 1 2 Before we begin, do you have an opening statement? 3 MR. BRUCE: 4 MS. ANDERSON: 5 No. Please state your full name and home address for the record. 6 MR. BRUCE: Mark Christopher Bruce. 7 Pike West, Sumter, South Carolina. 8 MS. ANDERSON: 9 MR. BRUCE: 10 11 Are you a registered voter? Yes. MS. ANDERSON: In which congressional district are you registered to vote? 12 MR. BRUCE: 13 MS. ANDERSON: 14 1150 South Fifth. Why are you interested in serving on the Public Service Commission? 15 MR. BRUCE: Well, I started out back when I 16 first graduated from high school working in the public 17 utilities with Santee Cooper. 18 information technology realm over the past 15 to 20 19 years. 20 I then migrated into the I believe the experience that I've gained in 21 all the various industries would allow me to bring a 22 broad knowledge base to the decision-making agency that 23 the Public Service Commission performs. 24 25 MS. ANDERSON: Have you attended any hearings at the Commission? www.compuscriptsinc.com 2/11/2013 183 1 MR. BRUCE: 2 MS. ANDERSON: 3 MR. BRUCE: MS. ANDERSON: How would you expect to get up to speed on the issues confronting the Commission? 8 9 I have briefly scanned some of them over at the regulatory staff website. 6 7 Have you read any of the Commission decisions? 4 5 Yes. MR. BRUCE: I would review legislation that's on record right now that is related to the carbon cap and 10 trade that may affect South Carolina depending on its 11 approval. 12 I read trade magazines relative to the utility 13 industry, speak with other professionals within this 14 industry that is pertinent to the decision-making rulings 15 that the PSC would perform. 16 MS. ANDERSON: Please describe your experience 17 or expertise in any of the following areas, including 18 time you've been engaged in the issues: 19 telecommunications, consumer protection and advocacy, 20 water and waste water, finance, economics, statistics, 21 accounting, engineering, or law. 22 MR. BRUCE: Okay. Energy, I redacted the part about 23 the consumer advocacy, so I won't comment on that one. 24 Energy, I started back when I graduated from high school 25 and finished my first year at Clemson University. www.compuscriptsinc.com I 2/11/2013 184 1 worked as cooperative education student at Santee Cooper 2 Cross Generating Station. 3 did that once or twice, I can't remember, and then I 4 transferred to the University of South Carolina after one 5 year sitting out of college, and then I worked in 6 industrial marketing department at South Carolina 7 Electric and Gas Company and was exposed to rate models 8 in the industrial marketing department. 9 After transferring from -- I In waste water issues, I've been involved with 10 Santee Riverkeeper Alliance and have educated myself 11 relative to water and waste water issues that are 12 pertinent to the health of our environment. 13 that's not a mission of the PSC, I think it's important. 14 Statistics and economics, with the reinsurance Although 15 work in policy management systems, we used statistics 16 that are specific to the reinsurance, I mean insurance, 17 which is the distribution of risk to other buyers of that 18 risk, and that those statistical models that we used were 19 used to analyze the risk and to distribute them 20 accordingly. 21 Could you repeat the list? MS. ANDERSON: Energy, telecommunications, 22 consumer protection and advocacy, water and waste water, 23 finance, economics, statistics, accounting, engineering, 24 or law. 25 MR. BRUCE: In accounting, I was involved with www.compuscriptsinc.com 2/11/2013 185 1 a company here in Columbia back in 1990, working with 2 developing accounting applications that augmented the 3 core functionality of major allocation, which I can't 4 remember what the name of it is, but I wrote applications 5 that augmented the functionality of that application. 6 7 And what was the other? list again? 8 9 Could you repeat the MS. ANDERSON: Energy, telecommunications, consumer advocacy protection, water and waste water, 10 finance, economics, statistics, accounting, engineering, 11 or law. 12 MR. BRUCE: In finance, I've worked for various 13 financial companies, such as mortgage banking, banking, 14 securities industry in New York, portfolio management was 15 one of the companies, Wachovia Bank, and I was exposed to 16 the financial applications related to the specific 17 industries that those companies were located, that they 18 performed their business in. 19 And engineering, I worked at Santee Cooper and 20 South Carolina Electric and Gas and performed engineering 21 duties as a cooperative educational student. 22 MS. ANDERSON: Are you familiar with 2006 23 Advisory Opinion issued by the Review Committee dealing 24 attendance at legislative receptions? 25 MR. BRUCE: Yes. www.compuscriptsinc.com 2/11/2013 186 1 MS. ANDERSON: Have you attended any 2 legislative receptions since receiving the Advisory 3 Opinion? 4 MR. BRUCE: No. 5 MS. ANDERSON: Are you familiar with the Review 6 Committee's decision made on January 15th of this year, 7 which clarified the 2006 Advisory Opinion? 8 MR. BRUCE: Yes. 9 MS. ANDERSON: Have you attended any 10 legislative receptions or any legislative caucus 11 meetings, other than delegation meetings, on or after 12 January 15th? 13 MR. BRUCE: No. 14 MS. ANDERSON: Assuming that you are serving on 15 the Commission, and you are approached by someone wanting 16 to discuss a matter that is or may become an issue in a 17 proceeding, how would you handle the situation? 18 MR. BRUCE: I would communicate to the 19 individual that as a Commissioner, I would be prohibited 20 from discussing any idea, any information related that 21 may come before the Public Service Commission in a 22 proceeding. 23 MS. ANDERSON: Are you aware that Commissioners 24 are subject to the Judicial Code of Conduct, as well as 25 state ethics laws? www.compuscriptsinc.com 2/11/2013 187 1 MR. BRUCE: Yes. 2 MS. ANDERSON: Are you affiliated with any 3 political parties, boards, or commissions that would need 4 to be reevaluated, if you were nominated and elected? 5 6 MR. BRUCE: I don't know. I'd say probably not. 7 MS. ANDERSON: Do you belong to any 8 organizations that discriminate based on race, religion, 9 or gender? 10 MR. BRUCE: 11 MS. ANDERSON: 12 13 No. What is the appropriate demeanor for a Commissioner? MR. BRUCE: To hold himself or herself in a 14 respectable manner within society, so as to not remove 15 the -- so the person is respected and upholds the 16 integrity of that position. 17 18 MS. ANDERSON: person is on the bench or does that apply 24/7? 19 MR. BRUCE: 20 MS. ANDERSON: 21 Would that apply while the All the time. Is there ever a role for sternness or anger with Commissioners? 22 MR. BRUCE: No. 23 MS. ANDERSON: What are the industries 24 regulated by the Public Service Commission? 25 name each of them, can you describe the Commission's www.compuscriptsinc.com And as you 2/11/2013 188 1 regulations of each? 2 MR. BRUCE: Telecommunications is to regulate 3 the rates for local exchange character. 4 regulate broadband, cable, and one other category. 5 don't remember. 6 They do not I Electricity is to -- electric utilities is to 7 establish rates and to perform due diligence with respect 8 to the rate base load and how that relates to the -- I'm 9 sorry. I can't remember that part. 10 Waste water issues, to perform rate base load 11 analysis so the rates are in line with the expenses 12 incurred, and that the company's financial integrity is 13 maintained, while also preserving economic development of 14 South Carolina and taking into account the using and 15 consuming public. 16 Transportation is to ensure that the safety part was 17 moved to the Department of Transportation to maintain the 18 licensing of motor vehicle carriers. 19 remember the rest of it. Vehicle carriers and the Department of Sorry. 20 MS. ANDERSON: 21 regarding ex parte communication? 22 23 MR. BRUCE: the -- I'm sorry. 24 25 Can you explain the rule Ex parte communication involves I can't remember. MS. ANDERSON: questions. And I can't Just a few general housekeeping Did you make any contributions to members of www.compuscriptsinc.com 2/11/2013 189 1 the General Assembly within six months of filing your 2 application? 3 MR. BRUCE: No. 4 MS. ANDERSON: Have you made any contributions 5 to members of the General Assembly since filing your 6 application? 7 MR. BRUCE: 8 MS. ANDERSON: 9 No. Have you sought or received the pledge of any legislator prior to this date? 10 MR. BRUCE: No. 11 MS. ANDERSON: Have you sought or been offered 12 a conditional pledge of support by any legislator pending 13 the outcome of your screening? 14 MR. BRUCE: 15 MS. ANDERSON: No. Have you asked any third-parties 16 to contact members of the General Assembly on your behalf 17 before the final and formal screening report is released? 18 MR. BRUCE: No. 19 MS. ANDERSON: Are you aware of any friends or 20 colleagues contacting members of the General Assembly on 21 your behalf? 22 MR. BRUCE: No. 23 MS. ANDERSON: Are you familiar with the 24 48-hour Rule which prohibits a candidate from seeking 25 pledges for 48 hours after the report is submitted to the www.compuscriptsinc.com 2/11/2013 190 1 General Assembly? 2 MR. BRUCE: 3 MS. ANDERSON: 4 Yes. if elected? 5 MR. BRUCE: 6 MS. ANDERSON: Yes. 7 questions, Mr. Chairman. 8 SENATOR HUTTO: 9 Do you plan to serve a full term Thank you. I have no more Mr. Bruce, how long have you lived in Clarendon County? 10 MR. BRUCE: Four years. 11 SENATOR HUTTO: Because I noticed on your job 12 description, there was several stints of time that you 13 were in Colorado. 14 Colorado company, or were you actually living in 15 Colorado? Maybe you were just working for a 16 MR. BRUCE: 17 company in Colorado. 18 19 I was living here and working for a SENATOR HUTTO: And the Santee Riverkeeper Alliance, what is that? 20 MR. BRUCE: Santee Riverkeeper Alliance is a 21 charitable organization that advocates clean water and 22 fights people or entities that create pollution. 23 24 25 SENATOR HUTTO: Mr. Sandifer might have some questions. REPRESENTATIVE SANDIFER: Thank you, Mr. www.compuscriptsinc.com 2/11/2013 191 1 Chairman. 2 most of them off of your testimony a few minutes ago. 3 Mr. Bruce, several questions, and I'll base When Ms. Anderson asked you how you would come 4 up to speed were you elected, I noticed that you said 5 that you would review federal regs, trade magazines, and 6 speak with other professionals. 7 blatantly omitted, and you might want to tell me what 8 that might be. 9 One thing I thought was Could it be the state law of South Carolina? 10 MR. BRUCE: 11 REPRESENTATIVE SANDIFER: 12 Absolutely. have any import? 13 MR. BRUCE: 14 REPRESENTATIVE SANDIFER: 15 But does that not I think that's the most important. When you say, Speak with other professionals, of whom were you speaking? 16 MR. BRUCE: Other professionals, like the 17 Department of Health and Environmental Control, other 18 scientific professionals who study rate base loads. 19 REPRESENTATIVE SANDIFER: Do you believe that 20 those conversations would or would not constitute an ex 21 parte communication? 22 MR. BRUCE: 23 24 25 not. If they were out of state, probably If they were in state, probably. REPRESENTATIVE SANDIFER: Maybe so. Okay. If they do constitute an ex parte communication, what action must www.compuscriptsinc.com 2/11/2013 192 1 you take? 2 MR. BRUCE: I would notify the Public Service 3 Commission and/or the Office of Regulatory Staff that the 4 communication took place and with whom. 5 6 REPRESENTATIVE SANDIFER: additional follow up? 7 MR. BRUCE: 8 REPRESENTATIVE SANDIFER: 9 10 Is there any Could be. I can't remember. Will you please describe for me the difference in the role of the Public Service Commission and the Office of Regulatory Staff? 11 MR. BRUCE: The Office of Regulatory Staff 12 represents the public, using and consuming public, while 13 also balancing the economic development of South Carolina 14 and also preserving the financial integrity of public 15 utilities. 16 The Public Service Commission performs duties 17 of initiating investigations through the Office of 18 Regulatory Services and makes judgments as to the rate 19 increases and whether they happen or not. 20 21 22 23 24 25 REPRESENTATIVE SANDIFER: So the PSC initiates those investigations. MR. BRUCE: It has the authority to do so, however, it is not required. REPRESENTATIVE SANDIFER: We talked a few minutes ago, Ms. Anderson did, about the industries, and www.compuscriptsinc.com 2/11/2013 193 1 I made a brief list, and I can hardly read some of my own 2 writing. 3 covered under the PSC were telecommunications but not 4 broadband; is that correct? Some of the industries that you said were 5 MR. BRUCE: 6 REPRESENTATIVE SANDIFER: 7 What about cellular communication? 8 9 Yes, sir. MR. BRUCE: couldn't remember. No, sir. 10 That's the other one I Thanks for reminding me. REPRESENTATIVE SANDIFER: Is there ever an 11 instance where broadband might fall under the purview of 12 the PSC? 13 MR. BRUCE: Not to my knowledge. 14 REPRESENTATIVE SANDIFER: I'm not sure. You talked about 15 electricity. What types of entities, who either generate 16 and/or distribute electricity, might not be? 17 MR. BRUCE: 18 REPRESENTATIVE SANDIFER: 19 Privately owned utilities. covered. 20 MR. BRUCE: 21 REPRESENTATIVE SANDIFER: 22 MR. BRUCE: 23 24 25 So Duke Power is not Municipalities. Could be. Excuse me. Any others? I don't recall at this time. REPRESENTATIVE SANDIFER: Electrical cooperatives? www.compuscriptsinc.com 2/11/2013 194 1 MR. BRUCE: 2 REPRESENTATIVE SANDIFER: 3 MR. BRUCE: 4 REPRESENTATIVE SANDIFER: 5 They are covered? Yes, sir. How about specific purpose districts? 6 7 Yes, sir. MR. BRUCE: I don't know the law. On certain cases. It would depend. It could apply. 8 REPRESENTATIVE SANDIFER: 9 vehicles and part of that was transferred to 10 transportation. 11 the PSC? 12 You talked about What types of vehicles are covered under MR. BRUCE: Vehicles where the service is 13 provided to the public, such as Santee Wateree would be a 14 good example of one. 15 REPRESENTATIVE SANDIFER: 16 MR. BRUCE: 17 REPRESENTATIVE SANDIFER: 18 MR. BRUCE: 19 REPRESENTATIVE SANDIFER: 20 How about a bus? I don't know. How about a taxi cab? Yes. How about a limousine? 21 MR. BRUCE: Yes. 22 REPRESENTATIVE SANDIFER: How about a limousine 23 that's owned by a funeral home primarily used for taking 24 a bereaved family to and from funerals, but might on 25 occasion rent that limo for a wedding? www.compuscriptsinc.com 2/11/2013 195 1 MR. BRUCE: 2 REPRESENTATIVE SANDIFER: 3 Yes. And then water, what types of water systems are covered by the PSC? 4 MR. BRUCE: Where the public would consume a 5 pod of water under -- I can't elaborate on it. 6 sorry. 7 REPRESENTATIVE SANDIFER: 8 about the Base Load Review Act. 9 MR. BRUCE: 10 12 Sorry. REPRESENTATIVE SANDIFER: Mr. Chairman. 13 Tell me a little bit Base Load Review Act establishes the -- I can't recall. 11 I'm Thank you, Thank you, sir. REPRESENTATIVE FORRESTER: Just a quick 14 question. After you took your test, did you do any 15 review of what you thought you might have missed? 16 MR. BRUCE: 17 REPRESENTATIVE FORRESTER: 18 19 Yes, sir. I did. Can you explain Universal Service Area? MR. BRUCE: The Universal Service Fund is a 20 fund that provides local, basic local exchange service in 21 rural communities. 22 REPRESENTATIVE FORRESTER: 23 MR. BRUCE: 24 REPRESENTATIVE FORRESTER: 25 Who manages that? I don't know. Just looking over your experience, what areas do you think make you www.compuscriptsinc.com 2/11/2013 196 1 2 qualified for this position? MR. BRUCE: I would say my financial exposure 3 to the financial industry. 4 industries, while working at Lucent Technology, and the 5 banking exposure that I have. 6 7 8 9 The telecommunication REPRESENTATIVE FORRESTER: How would those three help you? MR. BRUCE: They would allow me to have an understanding of the financials of the company and how 10 those financials are created in peeling back the layers 11 of a company's earnings, with respect to what they 12 report, and making decisions based on that information. 13 REPRESENTATIVE FORRESTER: 14 SENATOR HUTTO: 15 here and everybody else to leave. 16 17 Okay. Thank you. I'll ask you to stay (The Committee went into Executive Session from 4:37 p.m. to 4:45 p.m.) 18 SENATOR HUTTO: All right. 19 REPRESENTATIVE FORRESTER: Back on the record. Mr. Chairman, I'm 20 going to recuse myself from this hearing. 21 excused, thank you. 22 (Representative Forrester exits.) 23 SENATOR HUTTO: 24 REPRESENTATIVE SANDIFER: I'd like to be 25 All right. Mr. Chairman, if I may, I'd like for the record to indicate his recusal and www.compuscriptsinc.com 2/11/2013 197 1 his absence from the hearing. 2 3 SENATOR HUTTO: We'll call you back when we're finished. 4 5 Okay. (Headen Bynum Thomas was duly sworn, after which testimony commenced at 4:46 p.m.) 6 MS. ANDERSON: First of all, I'm going to start 7 off with a brief overview of your educational background 8 and experience. 9 Mr. Thomas graduated from Wofford College in 10 1973, and received a Bachelor of Arts degree in 11 Economics. 12 completed several hours in continuing education and tax 13 preparation over the past five years. 14 Manufacturer's Supply Company in Rock Hill in the 1970s, 15 and worked for Piedmont Natural Gas Company in Charlotte 16 from 1983, until 2006. He received an MBA from Winthrop. He has He worked at 17 He has served in a variety of roles, including 18 tax staff accountant, corporate tax manager, director of 19 investor relations, and corporate communications. 20 Following his employment with Piedmont Natural Gas, Mr. 21 Thomas has held various part time positions. 22 worked at Heritage Preserve, a closely-held business 23 involving real estate investments. 24 25 In 2007, he Since 2009, he has worked part time at Moore & Moore, CPAs. Since 2010, he has worked part time at www.compuscriptsinc.com 2/11/2013 198 1 Edisto Heritage Development. 2 in North Carolina. 3 He is also a licensed CPA Do you have any changes that you would like to 4 make to your Personal Data Questionnaire that you 5 submitted with your application? 6 MR. THOMAS: No changes, but I believe you did 7 misspeak. 8 report, but I believe you misspoke, and you said I 9 started at Piedmont Natural Gas in 1993, and I actually 10 I don't have any corrections to the written started in 1983. 11 MS. ANDERSON: That's correct. 12 At this time, I would like to request that 13 Mr. Thomas' Personal Data Questionnaire be entered into 14 the record with any personal and confidential information 15 being redacted. 16 17 (EXH. 10, Personal Data Questionnaire of Headen Bynum Thomas, marked for identification.) 18 MS. ANDERSON: As part of our background 19 investigation, we obtained a credit check, driver's 20 license, and SLED check. 21 confidential and personal nature, and we request that 22 they be taken up in Executive Session at the appropriate 23 time. 24 25 Staff has questions of a Before we begin questioning, do you have a brief statement that you'd like to make? www.compuscriptsinc.com 2/11/2013 199 1 2 3 4 5 MR. THOMAS: Not at this time. I'm here to answer your questions. MS. ANDERSON: Please state your full name and home address for the record. MR. THOMAS: My name is Headen Bynum Thomas, 6 and my address is 116 Creekside Drive, Fort Mill, South 7 Carolina, 29715. 8 MS. ANDERSON: 9 MR. THOMAS: 10 11 Are you a registered voter? MS. ANDERSON: Yes. In which congressional district are you registered to vote? 12 MR. THOMAS: 13 MS. ANDERSON: 14 15 Fifth Congressional District. Why are you interested in serving on the Public Service Commission? MR. THOMAS: I believe that I have an 16 opportunity here to serve the citizens of the State of 17 South Carolina. 18 training and experience puts me in a position to make a 19 strong contribution to the effective regulation of public 20 utilities in the state. 21 MS. ANDERSON: 22 I believe that my background and Have you attended any hearings at the Commission? 23 MR. THOMAS: 24 MS. ANDERSON: 25 Commission's decisions? I have. Have you read any of the www.compuscriptsinc.com 2/11/2013 200 1 MR. THOMAS: 2 MS. ANDERSON: 3 4 I have. How do you expect to get up to speed on the issues confronting the Commission? MR. THOMAS: I plan to do a lot more reading 5 and studying, much as I've been doing over the last 6 several months, asking a lot of questions and doing a lot 7 of listening. 8 said, You don't learn anything when you're talking. 9 need to shut your mouth and listen. 10 When I was brought up, my mother always MS. ANDERSON: You Please describe your experience 11 or expertise in any of the following areas, and include 12 the time that you've been engaged in those issues: 13 Energy, telecommunications, consumer protection and 14 advocacy, water and waste water, finance, economics, 15 statistics, accounting, engineering, or law. 16 MR. THOMAS: I've been involved in finance and 17 accounting and energy issues for quite a while, at least 18 since 1983. 19 started out in the tax department and was involved in tax 20 compliance, tax planning, and the pulling together of 21 information with regard to taxes, filing rate cases. 22 While I was with Piedmont Natural Gas, I I was communicating with all publics regarding 23 energy issues, particularly natural gas issues, and I was 24 involved in the finance area and investor relations and 25 communicating with securities analysts, as well as www.compuscriptsinc.com 2/11/2013 201 1 putting together background information with regard to 2 capital structure. 3 MS. ANDERSON: Are you familiar with the 2006 4 Advisory Opinion issued by the Review Committee dealing 5 with attendance at legislative receptions? 6 MR. THOMAS: 7 MS. ANDERSON: 8 11 Have you attended legislative receptions since receiving the advisory opinion? 9 10 I am. MR. THOMAS: Not since the clarification on the 15th. MS. ANDERSON: I have to follow up on that, but 12 for the first part regarding the 2006 Advisory Opinion, 13 did you attend any receptions since receiving the 2006 14 Advisory Opinion? 15 MR. THOMAS: 16 MS. ANDERSON: I did. Are you familiar with PURC's 17 decision at a committee meeting on January 15th of this 18 year, which clarified the 2006 opinion? 19 MR. THOMAS: 20 MS. ANDERSON: I am. Have you attended any 21 legislative receptions or any legislative caucus 22 meetings, other than delegation meetings, on or after 23 January 15th? 24 MR. THOMAS: 25 MS. ANDERSON: No. I have not. Assume you are serving on the www.compuscriptsinc.com 2/11/2013 202 1 Commission, and you are approached by someone wanting to 2 discuss a matter that is or may become an issue in the 3 proceeding, how would you handle that situation? 4 5 MR. THOMAS: I would not entertain those type of discussions. 6 MS. ANDERSON: Are you aware that Commissioners 7 are subject to the Judicial Code of Conduct as well as 8 state ethics laws? 9 MR. THOMAS: 10 MS. ANDERSON: Yes. Are you affiliated with any 11 political parties, boards, or commissions that would need 12 to be reevaluated if you are nominated and elected? 13 MR. THOMAS: 14 MS. ANDERSON: No. Do you belong to any 15 organizations that discriminate based on race, religion, 16 or gender? 17 MR. THOMAS: 18 MS. ANDERSON: 19 20 21 22 23 No. What is the appropriate demeanor for a Commissioner? MR. THOMAS: A Commissioner should be impartial and courteous and respectful. MS. ANDERSON: Would that apply only while on the bench or seven days week, 24 hours a day? 24 MR. THOMAS: 25 MS. ANDERSON: Pretty much all the time. Is there ever a role for www.compuscriptsinc.com 2/11/2013 203 1 sternness or anger as a Commissioner? 2 MR. THOMAS: I don't think anger would be 3 appropriate. 4 in a court-like setting. 5 sternness, keep things in order, may be appropriate. 6 You're dealing with a judicial situation, MS. ANDERSON: There is a time when perhaps What is the purpose of the Base 7 Load Review Act, and please include a description 8 regarding capital costs and contingency costs? 9 MR. THOMAS: The Base Load Review Act relates 10 to the planning for new generation facilities and the 11 purposes to make sure that they're thoroughly evaluated 12 and well-planned and that the plan is carefully followed 13 and that the Commission is updated throughout the 14 process. 15 The capital costs would involve everything that 16 goes into the building of the plant, the siting of the 17 plant, the purchasing of the property, the licensing, the 18 testing, the bringing on-line. 19 opinion, are not as well-defined. 20 for the planning and laying out of risks and contingency 21 plans for the risks, so my belief is that the contingency 22 costs or those costs that could be associated, if those 23 things don't go according to plan. 24 MS. ANDERSON: 25 Contingency costs, in my The structure calls What is the purpose of a reserve margin for an electric utility? www.compuscriptsinc.com 2/11/2013 204 1 MR. THOMAS: The reserve margin is an excess 2 capacity in order to meet peak demand to be sure there is 3 enough capacity during times when facilities may be down 4 for repairs, things of that nature. 5 MS. ANDERSON: Did you make any contributions 6 to members of the General Assembly within six months of 7 filing your application? 8 MR. THOMAS: 9 MS. ANDERSON: No, ma'am. Have you made any contributions 10 to members of the General Assembly since filing your 11 application? 12 MR. THOMAS: 13 MS. ANDERSON: 14 No, ma'am. Have you sought or received the pledge of any legislator prior to this date? 15 MR. THOMAS: 16 MS. ANDERSON: I have not. Have you sought or been offered 17 a conditional pledge of support by any legislator pending 18 the outcome of your screening? 19 MR. THOMAS: 20 MS. ANDERSON: I have not. Have you asked any third-parties 21 to contact members of the General Assembly on your behalf 22 before the final and formal screening report is released? 23 MR. THOMAS: 24 MS. ANDERSON: 25 I have not. Are you aware of any friends or colleagues contacting members of the General Assembly on www.compuscriptsinc.com 2/11/2013 205 1 your behalf? 2 MR. THOMAS: 3 MS. ANDERSON: No, ma'am. Are you familiar with the 4 48-hour Rule which prohibits a candidate from seeking a 5 pledge for 48 hours after the report has been submitted 6 to the General Assembly? 7 MR. THOMAS: 8 MS. ANDERSON: 9 Yes. Would you plan to serve a full term if elected? 10 MR. THOMAS: 11 MS. ANDERSON: 12 I am. I do. I have no further questions, Mr. Chairman. 13 SENATOR HUTTO: Mr. Sandifer? 14 REPRESENTATIVE SANDIFER: Thank you, Mr. 15 Chairman. 16 based upon more about what you have just testified to and 17 anything else. 18 Mr. Thomas, let me ask you a few questions When you were asked your reason for wanting to 19 serve, if I wrote my note correctly, you said because you 20 believe in the effective regulation of the utilities. 21 22 MR. THOMAS: I believe what I said is that I believe I could help with the effective regulation. 23 REPRESENTATIVE SANDIFER: Does the Public 24 Service Commission regulate anything other than 25 utilities? www.compuscriptsinc.com 2/11/2013 206 1 MR. THOMAS: Well, you've got the electric, 2 gas, waste water, and sewer companies, the movement of 3 household goods and personal effects, the movers of 4 hazardous waste, taxi cabs, and some aspects of 5 telecommunications. 6 REPRESENTATIVE SANDIFER: 7 MR. THOMAS: 8 REPRESENTATIVE SANDIFER: 9 How about buses? Not to my knowledge. Okay. How about rail? 10 MR. THOMAS: There are some things in the law 11 that relate to the railroads, but I'm not familiar with 12 what the regulatory purpose of the Public Service 13 Commission is. 14 REPRESENTATIVE SANDIFER: 15 MR. THOMAS: 16 Pipeline safety? Pipeline safety is pretty much, I think, at the federal level. 17 REPRESENTATIVE SANDIFER: And I noticed that 18 you said one of your strengths that you communicate with 19 the financial analysts. 20 Commission, would you try to make sure that that was a 21 continued communication with the analysts and with Wall 22 Street? 23 MR. THOMAS: Were you elected to the Only in an appropriate manner, and 24 at this point, I'm not sure what that appropriate manner 25 would be. www.compuscriptsinc.com 2/11/2013 207 1 2 REPRESENTATIVE SANDIFER: Is it important for the State of South Carolina to liaise with Wall Street? 3 MR. THOMAS: I believe it is. 4 REPRESENTATIVE SANDIFER: You said that you 5 would be impartial, attentive, and respectful. 6 those were the three words you used. 7 impartial means to you in this setting. 8 9 MR. THOMAS: I think Describe to me what Impartial, to me, means that you listen to the evidence or the input from all parties. 10 You take it into account, and you don't bring any 11 prejudices to the table. 12 you evaluate appropriately all the evidence. 13 REPRESENTATIVE SANDIFER: You come with an open mind, and In weighing that 14 evidence, would you give weight to one side or the other, 15 particularly if that side were represented by the ORS? 16 MR. THOMAS: No, sir. I don't believe so. I 17 believe the ORS is there to represent the interest of the 18 consuming public, but all sides would carry equal weight. 19 REPRESENTATIVE SANDIFER: When they represent 20 the consuming public, is that the only responsibility 21 they have? 22 MR. THOMAS: That's the primary responsibility. 23 REPRESENTATIVE SANDIFER: Do they have, for 24 example, a responsibility for the integrity of our 25 investor-owned utilities, for example? www.compuscriptsinc.com 2/11/2013 208 1 MR. THOMAS: The rate structure, in the end, is 2 supposed to be fair to both the customers and the 3 utility. 4 REPRESENTATIVE SANDIFER: If you go to Act 175, 5 and you read the charge given to the Office of Regulatory 6 Staff, is that one of the tenants in Act 175? 7 MR. THOMAS: 8 REPRESENTATIVE SANDIFER: 9 MR. THOMAS: 10 Is there a third one? I believe that there are standards for good customer service and reliability as well. 11 12 I believe it is. REPRESENTATIVE SANDIFER: Are they a party to actions at the Public Service Commission? 13 MR. THOMAS: They being -- 14 REPRESENTATIVE SANDIFER: 15 MR. THOMAS: The ORS. They are -- I'm not real sure of 16 the legal term, in terms of a party to the actions, but, 17 yeah. 18 19 REPRESENTATIVE SANDIFER: Are they a party of record? 20 MR. THOMAS: Yes, sir. 21 REPRESENTATIVE SANDIFER: 22 MR. THOMAS: 23 REPRESENTATIVE SANDIFER: Automatically? I believe so. Talk about the Base 24 Load Review Act a minute. When you say that projects 25 under base load are thoroughly evaluated, what www.compuscriptsinc.com 2/11/2013 209 1 2 determination is being made in that thorough evaluation? MR. THOMAS: Is the project needed for the 3 provision of future electric service? 4 being built in the manner that takes into account the 5 most effective use of the resources while the project is 6 being constructed or evaluating the alternative fuel 7 sources that may come into play? 8 9 10 REPRESENTATIVE SANDIFER: Is the project Does the term prudently incurred mean anything? MR. THOMAS: That's a huge part of the whole 11 deal, trying to determine, along the way, that 12 expenditures are wise and prudent. 13 REPRESENTATIVE SANDIFER: As part of the Base 14 Load Review Act, would you explain to me the part of 15 those costs that could be passed along to the consumers 16 during the construction or immediately prior to that. 17 18 19 20 21 MR. THOMAS: During construction, I think that it's the primary cost that is passed to the customers. REPRESENTATIVE SANDIFER: Describe that for all of us, so that everybody understands what AFUDC means. MR. THOMAS: AFUDC is the allowance of funds 22 used during construction, and it's basically an interest 23 calculation on the money used and expended by the utility 24 company while going through the process. 25 REPRESENTATIVE SANDIFER: Are they able to www.compuscriptsinc.com 2/11/2013 210 1 collect on monies expended for brick and mortar? 2 MR. THOMAS: 3 after the project is completed. 4 Well, that would be, I believe, REPRESENTATIVE SANDIFER: On reserve margin, 5 you indicated that it was to cover peak demand. 6 any other rational reason for an IOU to have a margin? 7 MR. THOMAS: Is there Well, I believe that there are a 8 lot of different reasons. Facilities have to go down 9 from time to time for formal maintenance. Facilities go 10 down from time to time because they just, they're maybe 11 not maintained as they should or things just don't always 12 work right. 13 REPRESENTATIVE SANDIFER: From the time that an 14 application is filed with PURC and with PSC, until the 15 time the generation starts at a nuclear site, have you 16 got an idea of what that time frame might be? 17 18 MR. THOMAS: very long. That time frame traditionally is Five to ten years. 19 REPRESENTATIVE SANDIFER: 20 MR. THOMAS: 21 REPRESENTATIVE SANDIFER: Try ten to 14. Well, I stand corrected. But what I'm getting 22 at is, should that margin also include the amount of 23 generation needed prior to a new unit actually coming on 24 line? 25 MR. THOMAS: Yes, sir. The power has to come www.compuscriptsinc.com 2/11/2013 211 1 from somewhere. 2 REPRESENTATIVE SANDIFER: Tell me, if you will, 3 the difference between a base load plant and a peek 4 plant. 5 MR. THOMAS: A base load plant is one designed 6 to run almost constantly and provide needs that are there 7 virtually every day. 8 service the needs on the days of highest demand. 9 here, those days would be in the summertime, when The peeking plants are there to 10 people's air-conditioners are running hard and 11 constantly. Around 12 The peeking facilities are designed to come 13 on-line quickly, and frequently are fueled by natural 14 gas. 15 and nuclear. The base load plants are typically fueled by coal 16 REPRESENTATIVE SANDIFER: And then another term 17 used in the electric industry is wheeling. 18 that term? 19 20 21 MR. THOMAS: I'm not that familiar with that. No, sir. REPRESENTATIVE SANDIFER: 22 Thank you, Mr. Chairman. 23 SENATOR HUTTO: 24 25 Do you know Okay. All right. Thank you, Mr. Thomas. Mr. Thomas, we're going to ask you to stay here and everybody else to leave. (The Committee went into Executive Session from www.compuscriptsinc.com 2/11/2013 212 1 5:05 p.m. to 5:10 p.m.) 2 SENATOR HUTTO: We'll finish this last 3 candidate today, and one of the candidates has withdrawn, 4 so instead of starting at 9, we'll start at 9:30, so 5 we'll have three candidates in the morning instead of 6 four. 7 8 (Swain Edgar Whitfield was duly sworn, after which testimony commenced at 5:12 p.m.) 9 MR. FIFFICK: Good afternoon, Mr. Whitfield. 10 I'm going to briefly summarize your educational 11 background and your experience and some other relevant 12 information to get it on the record. 13 Mr. Woodfield attended Erskine College from 14 1981 to 1982, and Kennesaw College, now Kennesaw State 15 University, from 1982 to 1983. 16 Arts degree in geography from the University of Georgia 17 in 1986. 18 Laidlaw Carriers, Incorporated, in traffic operations, 19 customer service, management, and driver supervision. 20 From 1987 to 1990, he was employed by Yeomans 21 Transportation, Incorporated, as an operations manager. 22 From 1990 to 1991, Mr. Whitfield served as a director of 23 operations for Senn Trucking Company, responsible for 24 operations, customer service, and outside sales. 25 1991, he founded Whitfield Transportation, Incorporated, He obtained a Bachelor of From 1986 to 1987, Mr. Whitfield worked for www.compuscriptsinc.com In 2/11/2013 213 1 where his duties included compliance, reporting, 2 management, operation, accounting, customer service, and 3 sales. 4 1995 to 1999, he served on the Winnsboro City Council 5 handling the utilities of the Town of Winnsboro, 6 including electric, water, waste water, and natural gas. 7 Mr. Whitfield was elected to the Public Service 8 Commission in 2008, and he has served continuously until 9 the present. 10 Mr. Whitfield sold the business in 2008. From Mr. Whitfield, other than changes that you've 11 submitted, do you have any changes that you would like to 12 make to the Personal Data Questionnaire you submitted 13 with your application? 14 MR. WHITFIELD: 15 MR. FIFFICK: Not at this time. No, sir. At this time, we would request 16 Mr. Whitfield's Personal Data Questionnaire be entered in 17 the record with any personal and confidential information 18 being redacted. 19 20 21 (EXH. 11, Personal Data Questionnaire of Swain Edgar Whitfield, marked for identification.) MR. FIFFICK: As part of our background 22 investigation of the candidate, we obtained a credit 23 check, driver's license, and SLED check, and for the 24 record, I would like to state that the credit check, 25 driver's license, and SLED check revealed no negative www.compuscriptsinc.com 2/11/2013 214 1 results of Mr. Whitfield that should be brought to the 2 attention of the Subcommittee. 3 4 Before we begin questioning, do you have a brief statement that you would like to make? 5 MR. WHITFIELD: Yes, sir. 6 long day. 7 the opportunity to be before you. 8 brief statement at this time. I know it's been a 9 Members of the Review Committee, I appreciate I'd like to make a First of all, I'd like to thank you for the 10 opportunity and thank the legislature for the opportunity 11 to serve the last four years. 12 privilege. 13 happened in this first term of mine. 14 It's been an honor and It's also been a challenge. A lot has First, when I was elected, I had a short period 15 of when I had to decide what to do with my company. 16 the short six weeks between mid-May and July 1, when I 17 was sworn in, I did sell the company. 18 after talking to three companies, and I did sell out. 19 Unfortunately, I've been unable to sell my office 20 building, so I've still got an office building in 21 Fairfield County for sale. 22 In I was fortunate, I've been through extensive training, through 23 NARUC, and I want to thank you for that. 24 through Unit 1 and Unit 2 at Michigan State University. 25 I've been to Utility Rate School, and I continue to www.compuscriptsinc.com I've been 2/11/2013 215 1 strive to seek education, and it's a constant learning 2 process. 3 While you have my background, prior to being a 4 Commission, and Mr. Fiffick read some of that, so I'm not 5 going to go through that again. 6 fit four years ago, prior to coming on the Commission; 7 however, I don't think there's any substitute for having 8 served as a Commissioner, and then through the processes 9 that we go through and actually the experience of hearing I think I had a unique 10 a case and being the judicial body that we are. 11 are some adjustments, having been a person that's worked 12 in a productive-type, producing revenue all these years. 13 I've had to find myself not being an activist and take on 14 the role of judge and be an impartial body. 15 can't be for either side. 16 that calls balls and strikes. 17 There I realize I I have to be like the umpire It's been a fabulous experience and there are 18 many, many challenges ahead. We talked last time, I 19 believe, that the population growth, and our census has 20 confirmed that as we gain a new congressional district. 21 Our population will continue to grow, and there are going 22 to be challenges that face our utilities as we go through 23 the next term that we'll deal with with the population 24 growth and demand being what it is. 25 landmark cases that I've been involved in in my first There are several www.compuscriptsinc.com 2/11/2013 216 1 term as a Commissioner that are what I would consider 2 cases of a lifetime. 3 and I would like the opportunity to serve another term to 4 help shepherd these cases as they continue to unfold. 5 There are two that come to mind, Again, it's been a fabulous experience. It's 6 been a nice career change. I can't thank you enough. 7 I've served on several major NARUC Committees, as you 8 see. 9 committee, and hopefully, if I'm reappointed, I can maybe I have been considered for leadership on one major 10 seek a leadership role on some of those committees and 11 also leadership at my commission. 12 thank you. 13 14 15 16 17 18 MR. FIFFICK: Thank you, sir. Could you please state your name and home address for the record. MR. WHITFIELD: Yes, sir. Swain E. Whitfield. 111 Heritage Road, Blackstock, South Carolina, 29014. MR. FIFFICK: 20 MR. WHITFIELD: 21 MR. FIFFICK: Are you a registered voter? Yes, sir. In which congressional district are you registered to vote? 23 MR. WHITFIELD: 24 MR. FIFFICK: 25 I have some standard questions that I'll be asking you now. 19 22 With that, I'd like to Fifth. Mr. Whitfield, could you please describe an ordinary workday for you in the Commission in www.compuscriptsinc.com 2/11/2013 217 1 2 the offices and otherwise. MR. WHITFIELD: Well, we come in, and I guess 3 first things first, like anybody in this day and age, we 4 go through e-mails, and, we, of course, as you know, we 5 can't respond to a lot of people. 6 e-mails and interoffice e-mails, and we have a lot of 7 publications that's come in. Typically, I'll see what 8 cases may be coming forward. I'll go through pretrial 9 testimony on cases coming before us, rebuttal testimony, A lot are staff 10 and then depending on what day it is, I may go and 11 debrief with our staff, never more than three of us. 12 have an excellent staff. 13 our staff multiple times a day. 14 tired of me bothering them, and they do have various 15 areas of expertise. 16 of expertise, and we rely on them heavily. 17 We I'm probably interacting with I'm glad they don't get Each person having a different area MR. FIFFICK: Thank you. In addition to the 18 information you've already conveyed, could you please 19 describe your experience and expertise in any of the 20 following areas, and include the time that you've been 21 engaged in the areas: 22 issues, consumer protection and advocacy issues, water 23 and waste water issues, finance, economics, statistics, 24 accounting, engineering, or law. 25 Energy issues, telecommunication MR. WHITFIELD: Well, Mr. Fiffick, of those www.compuscriptsinc.com 2/11/2013 218 1 areas now that I've been on the Commission, I would say 2 that I've been -- I don't know that I'd call myself an 3 expert, but I've had to be intimately involved in each of 4 the areas you've mentioned. 5 coming on the Commission, I did have some experience in 6 energy areas and water and waste water as a local city 7 councilman back in the '90s. 8 9 If you refer to prior to Winnsboro had its own water and waste water department, electric department, and natural gas 10 department. 11 heavily involved then, and I would like to point out that 12 27 percent of the cases last year were transportation 13 cases, and as you know from my background, I had 22 years 14 in transportation prior to coming on the Commission. 15 We're mostly thought of as regulating energy issues, and 16 those are our biggest cases and telecommunications. 17 do regulate transportation, certain areas of it, and that 18 was 27 percent of our cases last year, and I believe I'm 19 the only one on the Commission that's held federal 20 authority and served in that industry for 22 years. 21 We don't regulate municipalities, but I was MR. FIFFICK: Thank you, sir. We How do you 22 prepare for a hearing, and how long does it take to 23 prepare for a telecommunications, natural gas, water, or 24 sewer case? 25 MR. WHITFIELD: I guess I started down that www.compuscriptsinc.com 2/11/2013 219 1 path with you a minute ago when I was talking about the 2 workday. 3 we'll start going through the testimony and, depending on 4 the case, it could be a lot of reading. 5 less, but I'm one of these, I read what I can on-line on 6 the computer or maybe on my cell, but I'm one of these 7 that still likes to read it in print, and call me what 8 you want, but sometimes it's a pretty heavy stack of 9 testimony, and it's a lot of reading. First of all, we'll gather our testimony, and Some cases are We'll go through 10 that, and then usually rebuttal testimony and sometimes 11 surrebuttal testimony will come in, and sometimes near 12 the end, settlement testimony comes in which will change 13 everything. 14 a fine advisory staff. 15 an electric and gas guy, and of course, we have 16 Dr. Spearman, our executive assistant, and we have six 17 attorneys. 18 testimony, and we prepare right up to the time. 19 there's a night hearing, we're at that night hearing, 20 public hearing, giving citizens a chance to speak and 21 we're considering the testimony given to public 22 witnesses. 23 go and prepare the write-up of the hearing, and if there's 24 a settlement, that can change things almost at the last 25 minute. So we go with our staff, we have, as I said, We have two accountants, we have So I meet with our staff once we've read the It carries a lot of weight with us. www.compuscriptsinc.com If Then we 2/11/2013 220 1 MR. FIFFICK: Thank you, sir. If you were 2 approached by someone wanting to discuss a matter that is 3 or may become an issue in a proceeding before the Public 4 Service Commission, how would you handle that situation? 5 MR. WHITFIELD: I would simply tell him that I 6 could not discuss it. The law prohibits me from 7 discussing it. 8 like that with me. 9 when I was trying to tell him about a night hearing, I don't know of anything that's come up I did have a constituent one time 10 giving him the dates and times of it, and he didn't quite 11 get it, so I had staff send a letter out to him and a 12 couple other people letting them know the dates and times 13 of the public hearings and that I could not discuss the 14 case. 15 like to discuss the case with me at some other time. 16 immediately went to our clerk, and she placed it in the 17 record, and all the parties had to be notified, and I 18 think all the parties realized it was purely inadvertent 19 on the part of this constituent. 20 nobody contested anything, but that is the only incident 21 that I can recall in four and a half years of that coming 22 up. 23 He inadvertently wrote back to me telling me he'd MR. FIFFICK: I It's in the record, and Thank you, sir. Are you familiar 24 with the 2006 Advisory Opinion issued by the Review 25 Committee dealing with attendance at legislative www.compuscriptsinc.com 2/11/2013 221 1 receptions? 2 MR. WHITFIELD: 3 MR. FIFFICK: Yes, sir. Are you familiar with the PURC 4 decision at its meeting on January 15th, of this year, 5 clarifying the 2006 Advisory Opinion? 6 MR. WHITFIELD: 7 MR. FIFFICK: 8 Yes. Have you attended any legislative receptions since receiving that advisory opinion? 9 MR. WHITFIELD: 10 I the last four and a half years. 11 MR. FIFFICK: 12 13 No, sir. I have not, nor have What is the appropriate demeanor for a Commissioner? MR. WHITFIELD: The appropriate demeanor is to 14 be courteous to everyone that comes before us in the 15 hearing room, to use sound judgment, to be patient. 16 of these hearings go on, we have some long days, and we 17 have some long nights, too. 18 about a month, so I think patience is a big virtue. 19 think listening is the biggest part. 20 listen to what the expert witnesses say. 21 testimony, and again, we have some brilliant witnesses 22 that come across the witness stand. 23 Harvard, Yale, MIT, University of Cal-Berkeley, 24 Vanderbilt. 25 regardless of what side they're on, and you rule on the Some We had one case that went I To sit there and Read your You name it, And you listen to each and every witness, www.compuscriptsinc.com 2/11/2013 222 1 evidence and determine from the facts of the case and the 2 rule of law set by the State of South Carolina, by the 3 General Assembly. 4 5 MR. FIFFICK: Thank you. Is there ever a role for sternness or anger on the part of a Commissioner? 6 MR. WHITFIELD: No, sir. There's not a role 7 for that. Not from the bench, nor should there be with 8 our staff in the commission and day to day activities. 9 You know, there are seven us and we don't always agree on 10 things, but we respect each either. 11 function as a unit, and that's seven different people 12 coming from seven different perspectives, but we respect 13 each other. 14 when we disagree. 15 Assembly or PURC or anyone else, so there's no place for 16 that. 17 18 We get along, and we We are not going to demean the body, even We're not going to demean the General MR. FIFFICK: Thank you. Has the job as Public Service Commissioner been as you expected it to be? 19 MR. WHITFIELD: It has been that and then some. 20 It's been a tremendous learning experience. I've been 21 through extensive training and things are constantly 22 changing. 23 rewarding and everything that I -- it's been more than I 24 thought it would be. 25 constantly thinking of things that I used to never give It has been really, really challenging and However, I think I find myself www.compuscriptsinc.com 2/11/2013 223 1 any thought to. 2 allowable? 3 appearance of impropriety? I catch myself thinking about 4 things that I used to not think about. 5 vigilant, and we have to be on our toes and make sure 6 that we don't do something that would violate or give the 7 appearance that there's any impropriety. Is it appropriate? 8 9 I have to constantly be aware, is this MR. FIFFICK: Would it give the We have to be How would you rate your performance, since being elected to the Commission? 10 MR. WHITFIELD: I would say my performance has 11 been great. Again, I'm eager to give back to the state a 12 lot of the training that I received. 13 position to give back to the citizens of South Carolina 14 some of the training that I've benefited from. 15 been difficult to attain leadership, both at NARUC and 16 the Commission because, I know you all are aware, we've 17 had historic levels of Commissioners in leadership 18 positions. 19 also had four standing major Committee chairmen at the 20 same time. 21 1889, at NARUC, that you had that happen. 22 little bit of, I don't know another word to use, but, 23 envy of South Carolina in its leadership roles. 24 been considered for leadership on a major committee, but 25 I think, typically, they're looking to see if I'm I think I'm in a It has David Wright was President of NARUC, but we That might be the first time in history since www.compuscriptsinc.com So there's a I have 2/11/2013 224 1 reappointed, and respectfully to you all, I hope I am. 2 MR. FIFFICK: Please explain the general rule 3 regarding ex parte communications. 4 MR. WHITFIELD: Ex parte communications are 5 distinctly prohibited and not allowed under any 6 circumstances. 7 including fines and imprisonment. 8 fellow Commissioner, we are supposed to report it to you, 9 to the PURC Committee. There's severe penalties for that, If we suspect it of a We do have allowable ex partes 10 quite frequently where we notice them, and publish them 11 on the record, and all the parties are allowed to come in 12 and give us a briefing or update. 13 allowable ex parte briefings, which happen frequently. 14 MR. FIFFICK: And those are Thank you. Would you please 15 relate the statutorily stated purpose and operation of 16 the Base Load Review Act of 2007, to include a discussion 17 of contingent and capital cost. 18 MR. WHITFIELD: Well, the Base Load Review Act 19 was passed by the legislature in 2007, and you want to 20 know in terms of capital costs? 21 MR. FIFFICK: Include in your overview, a brief 22 discussion of contingent and capital costs and how they 23 relate. 24 25 MR. WHITFIELD: I'll answer that first. Okay. Well, if you don't mind, The Base Load Review Act allows www.compuscriptsinc.com 2/11/2013 225 1 the utility to do several things. One is that it allows 2 for a preconstruction order, in which the company can 3 recover certain preconstruction costs. 4 capacity factor of 70 percent or greater and be larger 5 than a 300-megawatt facility or larger. 6 company, if they choose, to seek preconstruction recovery 7 costs. 8 schedules and milestones in the Base Load Review Act, and 9 in presenting those milestones, they have to come back 10 annually to show they're meeting that and that they're 11 prudent in doing so. 12 costs associated with that capital investment. 13 case, as you know, it did go onto the Supreme Court, one 14 of our Base Load Review orders did go to the Supreme 15 Court and the Supreme Court disallowed the contingent 16 fund of $438 million, and now they have to come back each 17 time for the contingency costs to be included in rate 18 base. 19 allow the company to recover costs and fuel proceedings 20 for environment costs, such as, reagents, limestone, 21 emission control, limestone and other reagents that are 22 needed in the emission control process. 23 Act is designed to allow the company to seek recovery for 24 its cost going forward, so that at the end of the day 25 some of the costs will be covered in advance as the plant It has to be a That allows the Going forward, the company has to present certain Then they're allowed to recover In our The other thing the Base Load Review Act is to www.compuscriptsinc.com Base Load Review 2/11/2013 226 1 is being built. Otherwise, the plant is not useful, and 2 typically, the company is not allowed to recover costs 3 until the plant is used and useful. 4 used and useful, a lot of the costs are interest costs 5 that have been paid earlier, and it allows the company to 6 seek capital investment at better rates than they would 7 have otherwise. 8 You're lowering the burden on what would be the 9 ratepayers cost at the end of the day, instead of saying So when the plant is So you're doing two things there. 10 here's your plant and here's your big mortgage with it. 11 Instead, you've absorbed a lot of those interest costs 12 early on, from day one, when you started the 13 preconstruction. 14 MR. FIFFICK: Thank you, sir. I have a few 15 housekeeping questions. 16 pledge of any legislator prior to this date? 17 MR. WHITFIELD: 18 MR. FIFFICK: Have you sought or received the No, sir. Have you sought or been offered a 19 conditional pledge of support by any legislator pending 20 the outcome of your screening? 21 MR. WHITFIELD: 22 MR. FIFFICK: No, sir. Have you asked any third-parties 23 to contact members of the General Assembly on your behalf 24 before the final and formal screening report has been 25 released? www.compuscriptsinc.com 2/11/2013 227 1 MR. WHITFIELD: 2 MR. FIFFICK: No, sir. Are you aware of any friends or 3 colleagues contacting members of the General Assembly on 4 your behalf? 5 MR. WHITFIELD: 6 MR. FIFFICK: No, sir. Are you familiar with the 48-hour 7 Rule which prohibits candidates from seeking pledges for 8 48 hours after the report has been submitted to the 9 General Assembly? 10 MR. WHITFIELD: 11 MR. FIFFICK: 12 Yes, sir. Do you plan to serve out your full term if reelected? 13 MR. WHITFIELD: 14 MR. FIFFICK: 15 I sure do. Thank you, sir. Mr. Chairman, I have no further questions. 16 SENATOR HUTTO: Any questions, Mr. Sandifer? 17 REPRESENTATIVE SANDIFER: Thank you, Mr. 18 Chairman. 19 successful four-plus years. 20 information, I can't help but commiserate with your 21 inability to sell your office building. 22 Commissioner Whitfield, congratulations on a As I looked at your Going through your information, one thing that 23 caught my attention, and I think it's unusual, and I'd 24 like a little explanation is, the fact that you ran for 25 South Carolina House of Representatives in District 41, www.compuscriptsinc.com 2/11/2013 228 1 in 1992, and District 77 in 2004. 2 explanation. 3 MR. WHITFIELD: Would you give us some Yes, sir. I ran in House 4 District 41 in 1992. The first time I ran for public 5 office. 6 learned a lot and stayed involved. 7 council a couple years later, and I won that and served a 8 four-year term there. 9 District Two, and we moved Blythewood, and I ran for a I think I was 29. I lost to an incumbent, but I I ran for city My wife teaches in Richland School 10 house seat in 2004. 11 fell a little short of the mark. 12 served on a couple of state and local county boards and 13 ran for the Commission in 2008. 14 15 I received about 5,400 votes, but I stayed involved and REPRESENTATIVE SANDIFER: So you're residency, did that change between '92 and '04? 16 MR. WHITFIELD: Yes, sir. After I got off 17 Winnsboro Council in 1999, probably about 2000, is when I 18 moved. 19 REPRESENTATIVE SANDIFER: You identified the 20 fact that there have been two landmark cases that you 21 said, I think, that both of them are ongoing. 22 tell us what are they involving? 23 MR. WHITFIELD: Yes, sir. Would you I think I can do 24 that without violating anything. They're cases that are 25 in the past, so I can say what's public. www.compuscriptsinc.com I have to be 2/11/2013 229 1 careful. 2 E, which is the Base Load Review case involving V.C. 3 Summer Nuclear Station, Units 2 and 3. 4 that's the first case of that magnitude in nearly 30 5 years, so it was a case of a lifetime, and Representative 6 Sandifer, you know that is still ongoing as the plants 7 are under construction, and we have an annual review, so 8 that's about all I can say. 9 One of them, naturally, is what we know as 2196 REPRESENTATIVE SANDIFER: 10 MR. WHITFIELD: As you know, That's all I need. The other case that I was 11 referring to was the Duke-Progress merger, which Duke is 12 now, once the merger is consummated, will be the largest 13 electrical utility in America. 14 states, South Carolina being one of the states, and it is 15 still unfolding as we speak, and I don't know how much 16 more I can say about that. 17 That merger affects six REPRESENTATIVE SANDIFER: That's all you need 18 to say. I just need to know what cases we were talking 19 about, in your mind, as being landmark cases. 20 MR. WHITFIELD: Those are the two. 21 REPRESENTATIVE SANDIFER: One of the things 22 that you told Counsel was that you go through your 23 e-mails when you come in the office. 24 an e-mail comes in, and you open it and find that 25 inadvertently you have opened an ex parte communication? What happens when www.compuscriptsinc.com 2/11/2013 230 1 MR. WHITFIELD: That's a good question. 2 Thankfully, prior to my coming on the Commission, maybe 3 something to do with Act 175, they had setup public 4 e-mail addresses for us, and then we have a regular 5 e-mail account, and our staff is very good about not only 6 screening that public e-mail, but also screening phone 7 calls, they screen our mail. 8 I think that's, as you folks on the PURC Committee want 9 it, but that hasn't happened to me. 10 We're pretty insulated, and REPRESENTATIVE SANDIFER: And you were talking 11 about taking testimony. 12 the majority of settlement testimony comes from, would 13 you say that a lot of it comes from ORS? 14 MR. WHITFIELD: If you had to characterize where Yes, sir. Absolutely. A lot 15 of times in a case, you'll have multiple intervenors, and 16 ORS is the party that works with all the intervenors. 17 We're not allowed to have any contact with them 18 whatsoever, so ORS and staff at ORS and attorneys at ORS, 19 they're the ones, and I don't know exactly how they do 20 that, but they do it, and sometimes they don't. 21 Sometimes they'll have a settlement where they may get 22 six or seven intervenors, and all parties except one or 23 two sign on, and we have a settlement, but you'll have 24 two parties that still haven't signed on to the 25 settlement, so then we're in another predicament. www.compuscriptsinc.com Yes, 2/11/2013 231 1 sir. 2 with the intervenors, but also with the public. 3 course, as you well know, they're representing the 4 consumers' interest, so they're working with the 5 consumers to help get their concerns met as well. 6 I would say ORS is the main body working, not only REPRESENTATIVE SANDIFER: Of If you looked at a 7 calendar year, give us an idea of how many 8 adversarial-type hearings you conduct in a year. 9 10 11 12 MR. WHITFIELD: Are you talking about major? REPRESENTATIVE SANDIFER: No. Just adversarial hearings, whether big or small, is it two a month or 20? MR. WHITFIELD: Well, I wish I had some figures 13 for the exact number of cases, but we can have an 14 adversarial hearing in a transportation case. 15 always happen, but it does. 16 or two or three ongoing battles going on at all times. 17 Of course, electric cases are heavily contentious and 18 contested, but if you want my honest opinion, some of the 19 water and waste water cases are some of the most -- if 20 you want to get people really mad, mess with their 21 drinking water. 22 case are the most contentious ones that I've seen. 23 Electric can be, telecom can be, they all can be. 24 would say some of the most emotional cases I've seen are 25 the water and electrical cases. It doesn't Honestly, there's always one And some of the water and waste water www.compuscriptsinc.com But I 2/11/2013 232 1 REPRESENTATIVE SANDIFER: You talked about the 2 extensive training that you've taken, and I commend you 3 for that. 4 the best since being on the Commission? 5 What training would you categorize as being MR. WHITFIELD: The best? Well, it's essential 6 that you go to Michigan State to Level 1 and Level 2. 7 did it separate years. 8 one in 2009. 9 it was good also. I The first one in '08, the second The Utility Rate School, I did in 2010, and I think the unique thing is that it 10 takes you through a mock case, the entire exercise, a 11 week long of a mock rate case. 12 had been a Commissioner for a couple years and been 13 through a couple of serious water cases. 14 Michigan State is a must. 15 Commissioner Training that's helpful and very effective. 16 When I went through, they had the NARUC Committee chairs 17 that actually came in and gave us their expertise, plus 18 the staff gave us their expertise. 19 compressed into a one or two day. 20 21 22 I would say NARUC also has some New REPRESENTATIVE SANDIFER: The NARUC course was That's kind of like boot camp. MR. WHITFIELD: 23 actually a week long. 24 separate years. 25 Now, fortunately for me, I Well, the boot camp, those are Week one and two, and I did it in There is some other training. REPRESENTATIVE SANDIFER: No. www.compuscriptsinc.com I don't need to 2/11/2013 233 1 know all of it. I just wanted your personal opinion. 2 MR. WHITFIELD: I would say the NARUC boot 3 camps and the Utility Rate School. 4 REPRESENTATIVE SANDIFER: And then, is it safe 5 to say that the primary residual effect of the Base Load 6 Review Act is the fact that it allows the utilities to 7 attract capital at a reasonable rate? 8 9 MR. WHITFIELD: Absolutely. I was privileged to give the South Carolina perspective at a Wall Street 10 dialogue with the major credit agencies hanging onto 11 about everything that I said. 12 week that Standard and Poor downgraded the U.S. 13 government's credit rating. 14 to do that. 15 not mistaken, we were ahead of the game in South 16 Carolina, and Georgia, if I'm not mistaken, passed their 17 Base Load Review Act simultaneously in the Georgia State 18 Senate while they were already having their case ongoing 19 before the Georgia Public Service Commission. 20 say we did it right. 21 years before the case, and from what I learned and read 22 about, they tried to do the two simultaneously. 23 it got a lot of press. 24 25 Absolutely. It happened to be same It was a really unique time That is the effect, and if I'm We had the law in place several REPRESENTATIVE SANDIFER: Commissioner. So I can Thank you, Thank you, Mr. Chairman. www.compuscriptsinc.com I think 2/11/2013 234 1 SENATOR HUTTO: Anybody else? 2 REPRESENTATIVE FORRESTER: Just one quick 3 question. 4 facing your role in the Public Service Commission in the 5 coming years? 6 7 What do you see are the biggest challenges MR. WHITFIELD: You mean for the Commission as a whole? 8 REPRESENTATIVE FORRESTER: 9 MR. WHITFIELD: Right. I see the biggest challenges 10 are continuing to provide affordable and reliable energy 11 and utilities at fair rates for South Carolina ratepayers 12 with the constraints that I know are facing us. 13 those are the federal regulations that are -- one set is 14 already in place. 15 then there are two more breathing down our neck. 16 316 B, which has to do with the cooling water intake and 17 the Coal Act, and if those are implicated, it's going to 18 take more diligence on our utilities part to continue to 19 provide low cost, affordable, reliable power for South 20 Carolinians. 21 so because we've had some good news here in South 22 Carolina, but we have to get our manufacturing base back 23 on. 24 we have to get, we've got to get that manufacturing jump 25 started and going again. And The EPA regs, the air quality, and Rule I think it's crucial that we continue to do We have rural areas that have not come around, and The only way we're going to do www.compuscriptsinc.com 2/11/2013 235 1 it is to be able to provide affordable, reliability 2 power. 3 in all classes of ratepayers, be it, residential, 4 commercial, large industrial, whatever. 5 the biggest challenge, plus any other federal mandates 6 that may come our way. Not only for the industry, but for the citizens 7 REPRESENTATIVE FORRESTER: 8 SENATOR HUTTO: 9 everybody else to leave. I think that's Thank you. We'll ask you to stay and As I told you earlier, once we 10 finish this, he'll be excused. 11 Session, and we'll see you all in the morning at 9:30. 12 We'll remain in Executive (The hearing adjourned at 6:05 p.m.) 13 14 15 16 17 18 19 20 21 22 23 24 25 www.compuscriptsinc.com 2/11/2013 236 1 2 3 4 5 6 7 CERTIFICATE OF REPORTER I, Lisa A. Garson, Court Reporter and Notary Public for the State of South Carolina at Large, do hereby certify: That the foregoing transcript was taken before me on the date and at the time and location stated on the 1st page of this transcript; that all statements made on the record at the time of the proceeding were recorded stenographically by me and were thereafter transcribed; that the foregoing transcript as typed is a true, accurate and complete record of the proceeding to the best of my ability. 8 9 I further certify that I am neither related to nor counsel for any party to the cause pending or interested in the events thereof. 10 11 Witness my hand, I have hereunto affixed my official seal this 27th day of February, 2013, at Greenville, Greenville County, South Carolina. 12 13 14 15 16 17 18 19 20 _____________________________ Lisa A. Garson, Court Reporter Notary Public State of South Carolina My Commission Expires: December 19, 2019 21 22 23 24 25 www.compuscriptsinc.com 2/11/2013 237 I N D E X 1 PAGE 2 3 CANDIDATE: 4 DAVID. C. CANNON 5 5 JOHN EDWARD HOWARD 21 6 CAROLYN LEONE WILLIAMS 42 7 NANCY SHERER CAMPBELL 59 8 RANDY MITCHELL 80 9 BARBARA ANN BROWN 131 10 SARAH BRAMLETT NUCKLES 154 11 MARK CHRISTOPHER BRUCE 180 12 HEADEN BYNUM THOMAS 197 13 SWAIN EDGAR WHITFIELD 212 E X H I B I T S 14 15 1 David C. Cannon Personal Data Questionnaire 7 16 1A Ethics Complaint 8 17 2 John Edward Howard Personal Data Questionnaire 34 18 3 Carolyn Leone Williams Personal Data Questionnaire 43 19 4 Nancy Sherer Campbell Personal Data Questionnaire 60 20 5 Randy Mitchell Personal Data Questionnaire 81 21 6 Comer Henry Randall Personal Data Questionnaire 110 22 7 Barbara Ann Brown Personal Data Questionnaire 133 23 8 Sarah Bramlett Nuckles Personal Data Questionnaire 156 24 9 Mark Christopher Bruce Personal Data Questionnaire 181 25 10 Headen Bynum Thomas Personal Data Questionnaire 198 www.compuscriptsinc.com 2/11/2013 238 1 2 11 Swain Edgar Whitfield Personal Data Questionnaire 213 Reporter's Certificate 236 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 www.compuscriptsinc.com