SJR 45: Joint Subcommittee Studying the Responsibilities, Policies and Activities of the State Corporation Commission

September 17, 2002

The joint subcommittee held its first meeting of the interim to review the status of the State Corporation Commission's (SCC) implementation of the recommendations contained in reports of the consultant hired by the joint subcommittee (the GMU Report) and the consultant hired by the SCC (the Wirick Report).

SCC Actions

The director of the Division of Information Resources presented the joint subcommittee with an overview of the actions taken by the SCC to implement some of the recommendations contained in the two consultant reports:

  • Institution of a "strong chairman" structure giving the chairman of the SCC a dominant role in administrative matters affecting all SCC divisions. Under this structure, all divisions of the SCC report to the chairman, who now serves as the primary point of contact for all division-related administrative matters (i.e., operations, budget, and personnel). Although the chairman will continue to be elected annually, the traditional annual rotation of the chairmanship is expected to continue.
  • Creation of two new positions, Counsel to the Commission–Utilities and Counsel to the Commission–Business and Financial to provide a buffer between the commission and commission staff. This action was taken in response to concerns raised in both the GMU and Wirick reports regarding what appeared to be a lack of adequate separation between the commissioners and SCC staff. Commissioners will now rely on these counsel positions in non-administrative matters whenever legal issues or facts of a technical nature are such that direct involvement by SCC staff in formulating a commission decision must be avoided.
  • Designation of individuals as "single points of contact" for each of the primary industry sectors. Each of these individuals is directed by the commission to coordinate all regulatory matters and assume the lead in communicating and encouraging the development of competitive markets involving their respective sectors. The single points of contact are:
    • Director of Communications — telecommunications industry;
    • Director of Energy Regulation — electric, natural gas, and water;
    • Commissioner of Insurance — insurance industry;
    • Commissioner of Financial Institutions — financial industry;
    • Director of Securities and Retail Franchising — investment industry;
    • Clerk of Commission — business entity filings.
    • In keeping with this "regulation by industry" approach, in April 2002 the SCC began identifying all formal cases under categories that matched these primary industry sectors and implemented a computer-based case management system that tracks all documents filed in each formal case. It is anticipated that within two months, the SCC's website will allow the general public to access every public document filed in a case.

  • Adding one attorney position in the Office of General Counsel who will focus on the securities area, bringing the total to two attorneys with primary responsibility in this area.
  • Involvement of stakeholders earlier in the process through stakeholder sessions convened by SCC staff during the development of proposed rules or regulations. The use of such stakeholder sessions has been successful in the development of retail access rules for electricity and natural gas, competitive metering and consolidated billing. Stakeholder sessions are also currently being used in the development of default service guidelines.
  • Establishment, through a collaborative effort, of new performance standards and a remedy plan for Verizon when providing service to Verizon's competitors through a collaborative effort involving all stakeholders.

Subcommittee Comment

A discussion between members of the joint subcommittee and SCC representatives ensued, covering a range of subjects.

Question/Comment: Has the SCC received any feedback on whether the new commission counsel positions were having any impact on the perception of the ex parte separation issue?

Response: There initially seems to be a desire to see if the arrangement works. The current Counsel to the Commission (Utilities) indicated that though things were still in transition, while serving in his role he has not received information from any stakeholders or participants that the arrangement was not working. The effect of the new positions could be measured by inviting comments from practitioners, which, under the newly adopted strong chairman model, could be done both formally and informally.

Question/Comment: Some question remains concerning whether a commission comprised of three individuals, where each commissioner is responsible for issues and cases in a given subject matter area to the exclusion of the other two commissioners, was adequate in terms of the workload and power exercised by an individual commission member. Are individual commissioners still assigned subject matter areas exclusive of other members?

Response: Under the strong chairman model, the chairman would now make the decision regarding which of the commissioners would handle a given issue or case. It was resolved through further discussion, however, that there was nothing to prohibit the chairman from assigning the issues and cases involving a given subject matter to the same commissioner who handled the subject matter prior to the change in structure.

Question/Comment: Has the SCC revisited the issue of increasing the number of commissioners to help the Commonwealth through changes that the industries under the SCC's charge are undergoing?

Response: Such a change is a policy issue that must be determined by the General Assembly. Most other state commissions consist of three or five members. Other than the GMU consultant, who thought increasing the number of commissioners was a good idea, the SCC representative stated that he was unaware of any other advocates for increasing the number of commissioners.

Question/Comment: Recent legislation passed by the General Assembly required the SCC and the Department of Environmental Quality to enter into a memorandum of agreement to govern their coordination of reviews of the environmental impacts of electric generating facilities.

Response: A final memorandum of agreement to coordinate the review on air and water permits for the plants was completed in late July and released in August.

Question/Comment: Has the SCC taken any specific steps to improve its dialogue with the General Assembly?

Response: SCC staff and members are always available to the members of the General Assembly and legislative staff.

Question/Comment: The Wirick Report specifically recommended that the SCC should create rules and procedures for the application of alternative dispute resolution. What has the SCC had done in response to the recommendation?

Response: Rules have been developed for the use of alternative dispute resolution involving some telecommunication issues, and the process would attempt to resolve issues that fell between informal and formal processes. The dispute resolution process has not yet been used.

Question/Comment: Both the Wirick and the GMU Reports discussed consumer and public relations. Concern was expressed that comments would only be accepted by letter.

Response: There are issues associated with receiving comments by fax, including the quality and the lack of original signatures. The SCC official indicated that he would take suggestions that the SCC not require comments to be in letter form and that a form be devised on the website to ensure that correct information is given back to the commissioners.

Public Comment

Chairman Norment concluded that it would be appropriate for the joint subcommittee to receive additional public comment from consumers, the regulated industry, and litigants who appear before the SCC regarding how the changes made by the SCC have been perceived and how the SCC might be improved. Delegate Morgan expressed concern regarding the reluctance of some to come forward for fear of reprisals. He suggested that perhaps they could contact the members individually without having to go on the public record.

It was resolved that a portion of the next meeting will be set aside to receive public comment and recommendations concerning the actions taken by the SCC in response to the consultant reports and how the SCC might be improved.


The Hon. Thomas K. Norment, Jr.

For information, contact:

Amigo R. Wade
Division of Legislative Services


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