Regulatory commission urged to modify admin rules

The Commonwealth Utilities Corp. wants the standing administrative rules of the Commonwealth Public Utilities Commission to give the utility agency the authority to review and object to bills assessed by the commission and its consultants before these are paid.

CUC legal counsel Deborah Fisher disclosed this in her latest filing with the regulatory commission, revealing that the language requiring CUC to pay the consulting expenses “without limitation” is objectionable and should be stricken.

Fisher’s filing is in response to the CPUC’s hearing examiner report filed on June 17 that indicated several recommendations to the commission, including billings and fees.

“The commission’s consultant and the consultant’s attorney should not be billing CUC directly. CUC needs to have an opportunity to review and object. Equally importantly, the commission should be reviewing these bills first, and then sending the billing to CUC with a request to pay,” according to Fisher.

CUC, she added, sees a potential ethical problem in having a third-party payer of legal services review and comment on billings before the commission has already made its review and set forth its intentions.

“In addition, CUC sees a problem with the commission ordering payment of bills, which in these matters have been substantial, before the billings are put into utility rates,” she said, adding that if CUC had a reserve, this could be an expense budgeted for reimbursement. But without a reserve or credit of any kind, CUC cannot be expected to pay substantial bills without first recovering these expenses in its rates.

Fisher said there are constitutional due process issues involved if the commission acts on this issue before CUC is able to present its position on these fees in an adjudicatory process.

“CUC has the right to review fees before they are paid. CUC has already paid the annual charge of $135,000 to the commission in the beginning of the year for the commission’s operating expenses. This is on top of the fees the commission obtains from the other entities it regulates. See 4 CMC §8426(b). CUC believes it is entitled to see an expense statement which shows where this funding has gone before it is ordered to pay further commission operating expenses as a condition to the commission’s decision on CUC’s rate petition,” she added.

Fisher also said that CUC should not have to pay regular commission expenses for travel and administrative expenses, as these are costs that should be included in the annual assessment for all regulated entities. CUC is only required to pay for expenses that were “not considered or contemplated in determining the annual charges….” based on 4 CMC §8426(d).

“The recent billing of approximately $30,000 is questionable as it appears to include expected costs of the commission which would be part of the annual charge which is paid by all regulated entities, not just CUC. The recent bill from the commission includes hearing examiner travels, commissioner travels, and compensation for time worked by the commission’s administrative assistant.

While the commission can seek payment for expenses incurred by “specific proceedings,” regarding professional and consultative services, these are only for proceedings not contemplated by the commission.