Annual report of the Georgia Public Service Commission, January 1, 1995 - December 31, 1995

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The Annual Report of The Georgia Public Servi.;:e Commission
January 1, 1995.- December 31, 1995

The mission of the Georgia Public Service Commission is to safeguard the public trust and promote a viable and robust economy in the communications, commercial transportation
and energy utilities marketplace.
The Georgia Public Service Commission Dave Baker, (R-Atlanta)
Robert Baker, Jr., (R-Gwinnett) Mac Barber, (D-Commerce) Bob Durden, (R~Grayson) Stan Wise, (R~Cobb)

CURRENT DECISIONS, FUTURE 'DIRECTIONS

Ever since the Georgia Public Service Commission was established in 1879, its jurisdiction and responsibilities have reflected and responded to business and industry growth, technological <level;. ~pment and changes in consumer concerns and demands. This was dearly evident during 1995, the Commission's 116th year of service, as it strived to provide for the public good as well as promote a healthy business economy. The concept that most clearly defined the past year, however, was deregulation and it changed the PSC's activities dramatically.

With the passage of the Federal Aviation Authorization Act of 1994, for example, the majority of commercial motor carriers no longer had to file tariffs or seek rate approval from the Commis.sion: And while the PSC exercised absolute regulatory authority over investor-owned natural gas and electric power utilities, and. continued to set rates, require long-range energy plans and projections, and provide for the safety of gas pipelirie distribution systems, it also began to gather information about deregulating them.

The area most affected by the onset of deregulation, though, was telecommunications. When

Senate Bill137 became law, it opened up local telephone service markets to competition and set

the course for ending the sanctioned monopoly of BellSouth and 33 other local telephone compa-

nies across the state. Formally referred to as the Telecommunications and Competition

Development Act of 1995, SB 137 also paved the way for interested communities to have toll-free

calling between central offices of telephone companies situated within.a radius of 25 miles of each

other (extended area service or EAS).



Recognizing that competition among telephone service providers would undoubtedly increase, SB 137 negated the PSC's authority to set the rates consumers paid for telephone services. Rather, the legislation intended that market.forces would set prices, with competing companies deciding rates, terms and conditions among themselves. The PSC thus assumed the role of manager/facilita- . tor, one that w~uld guide a fair and smooth transition to open-market competition, ensure reasonable access to services, monitor rates and service quality and execute decisions only when competing companies could not come to agreeable terms.

Free-market competition is the most widely discussed issue facing regulators of public utilities._ And while there are many specifics to be addressed in each public utility arena, at the foundation of the debate lies the more ambiguous notion of the regulatory compact.

CURRENT DECISIONS,FUTURE DIRECTIONS
Continued from Pre~ious Page

By virtue of their unique status as legally-sanctioned monopolies, public utilities accept the currently undisputed obligation to provide equitable service to all customers and to charge similarly-situated customers the same price, and on the same terms and conditions, for their servic~s. In return, public utilities benefitfrom certain protected rights~ to earn a sufficient rate of return on their investments, to impose reasonable rules on customers for using services, and to enjoy some degree of protection against competition in their service areas. This give and take relationship between public utilities and the general public has com~ to be known as the "regulatory compact."

What might happen to the basicnature of this compact if competition became the sole determinant of who provides what services to whom and at what price is the question all regulatory agencies and legislative bodies contemplating deregulation must ultimately answer.

In general, while conceding that some degree ofcompetition within public utilities would seem to be inevitable as well as potentially cost-effective, regulatory agencies express some concern that a move toward competition may of necessity be a move away from service. They reason that if customers are to be given the freedom to pick ;nd choose among"utilities in order to minimize their costs, it follows that utilities should be given the right to pick and choose among customers in order to maximize their profits.

In effect, unregulated competition might only succeed in lowering costs for a few while raising. them for many others. Or worse, it might eventually work to deny service altogether to those cus- tomers whose needs are simply too limited or too difficult to meet to warrant attention in a freely competitive marketplace.

There are no easy solutions to the issue.s under debate. Policy changes which provide the .PSC

with both opportunities and challenges must be decided. Careful and deliberate study of the many

particulars should occur in an atmosphere which allows utility users and producers the freedom to

express their present .and future needs. That atrp.osphere began to form clearly in the latter .half of

1995, and it will certainly be the one in which the Georgia Public Service Commission will operate

in 1996 and beyond.



FIRST QUARTER
JANUARY-MARCH, 1995

New Commission Begins Work
Two new Commissioners joined the ranks at the PSC to give the regulatory agency a Republic can majority for the first time in history. Dave Baker (R-Adanta) and Stan Wise (R-Cobb) joined .immediate past chairman Robert Baker, Jr. (R-Gwinnett), new chairman Bob Durden (R-Grayson) and Mac Barber, the Commission's lone Democrat from Commerce, at the first Administrative Session of the year on January 3, 1995.

Intrastate Trucking Deregulated
For the first time in fifty years, motor carriers other than household goods movers and passe;ger carriers no longer had to file tariffs ind seek rate change approval from the PSC. With the Federal Aviation Authoriz;tion Act of 1994, economic regulation ofihtrastate trucking transportatiOn effectively ended, thus making shippers and carriers responsible fornegotiating rates. Under the new law, however, the PSCretained the authority to issue certificates and/or permits, require proof of insurance and inspect carriers for compliance with FederalMotor Carrier Safety Regulations.

AGL Deals with Bypass Threats

Atlanta Gas Light garnered approval frorn the PSC to negotiate optional,five-year renew-

able contracts with existing or potential large industrial customers who have the choice of

bypassing AGL facilities and purchasing natural gas directly from its competitors. The interim

agreement didnot affect small commercial or residential Atlanta Gas Light customers. The issue.

of competition and, therefore, deregulation in the natural gas industry was expected to surface

again later in the year.







SECOND QUARTER-
APRIL-JUNE, 1995.
PSC Gives OK for New Area Code
Due to the ever-increasing use of fax machines, beepers, cellular phones and computer lines, the possible combination ofphone numbers in area code 404 were projected to be exhausted in late '95.. In late April, therefore, the PSC approved the new 770 area code for metropolitan Atlanta.. Under the "doughnut" area code relief option as it is called, most exchanges outside the 1-285 perimeter were assigned area code 770, while those inside 1-285 kept area code 404. While all calls from 770 to 404 and vice-versa are toll free, beginning December 1, 1995, consumers had to dial all ten digits when calling from one area. code to the other. It was projected that in less than a decade both 770 and 404 would have to be further subdivided.
BellSouth Required to Reduce Rates, Refund Customers
PSC actions in the second quarter of '95 resulted in a $32 million dollar rate reduction for BellSouth and an $8.8 million dollar refund for the phone company's customers. After an extensive investigation of BellSouth's revenues, the PSC determined that earnings were at a level which required profit sharing with consumers. By ordering the one-time credit, approximately $2.80 per access line, the Commission made certain that BellSouth customers benefited from profits earned.
Truck Safety Program Gets More Mileage
Cobb and Lowndes counties cooperated with the PSC to make Georgia's highways safer for citizens. The matching grant monies (80% federal, 20% local) were used to train local law enforcement officers to perform safety inspections when stopping trucks for traffic violations. The projects are designed to increase and augment the efforts of the PSC's 34 enforcement officers, whose primary responsibility is to conduct random motor carrier safety inspections across the state.

THIRD QUARTER
JULY-SEPTEMBER, 1995
PSC Orders Refund for AGL Customers
The Commission approved a refund of more than $38 million dollars for Atlanta Gas Light's residential, commercial and industrial customers, which appeared in the form ofa one-time credit on October utility bills. Changes in regulation at the federal level and the resulting competition, as well as higher than expected temperatures during thew.inter of 1994-95, reduced customer demand. for natural gas: This resulted in lowerprices. The PSC's decision to award refunds balanced the difference in estimated gas .costs used for billing over the past year and the lower actual gas costs. For. the average residential customer, this meant a refund of approximately $22.00.
Georgia Power's DSM Rebates Terminated
Georgia Power began offering rebates in February of1993 to customers who made energyefficient improvements to their homes~ The concept, known as DSM (Demand Side Management), attempts to conserve energy by reducing consumer demand. In Au~st 1995, the PSC terminated those rebates at the request of Georgia Power, which .indicated the cost to continue DSM was too expensive. Others, however, said that eliminating the program was too costly for the environment: The PSC agreed to reconsider its termination order, but ultimately reaffirmed it in September, cautioning Georgia Power to use stricter tests to determine the cost effectiveness offuture conservation programs.
1996 Gas Supply Plans Approved
Consumers paid less for natural gas during the winter of 95-96 as a result of the PSC's decision to accept staff recommendations for modifying the AGL and UGCgas supply plans. Under the plan approved for Atlanta Gas Light, customers paid approximately 30 cents per therm, a reduction of almost seven c~nts per therm from the previous projection. United Cities Gas customers saved a similar amount, paying between 28 and 29 cents per 100 cubic feet of gas used. Both companies' original plans, filed with the PSC in August, projected customer charges during the next year under normal weather conditions, forecast the amount of gas customers will use and described how the companies will meet that demand.
Atlanta Toll--Free Area Expands
lmplementationofthe PSC's approval of the Metro Atlanta Local Calling Area expansion took effect on July 1, 1995, increasing the toll-fr~e exchanges from 29 to .64. A total of 2.2 million access lines were affected:

FOURTH QUARTER
OCTOBER-DECEMBER, 1995
Local Telephone Comp~tition Closer to Reality
The PSC demonstrated its commitment to execute the specifics of the Telecommunications and Competition Development Act of 1995 as quickly as possible when it unanimously approved interim certificates of authority for three companies to take the initial steps of providing local telephone service to Georgians in areas where BellSouth was the only provider. For BellSouth customers, however, expanded choice for local service will become a reality only when three major issues are addressed.. The competing companies will either have to build their own networks or lease lines from BellSouth; new providers must negotiate reasonable int.erconnection rates to access BellSouth's existing network; and phone number portability (keeping the same number no matter which telephone company provides the local service) must be feasible.
Consumers Given a Vote
. Over 900,000 telephone customers of BellSouthand 19.other telephone companies serving more than 300 communities received ballots from the PSC requesting a vote of "yes," "no" or "no opinion" regarding extended area service (EAS). The toll-free local calling expansion affected all exchanges between areas where central telephone offices are 25 miles or less apart, and where the call volume was sufficient to warrant a cost study. Ballots also indicated the proposed price increase or decrease affecting residential and business customers if EAS were to go into effect'.
More than 130,000 ALLTEL phone customers in 52 exchange areas also received ballots to endorse or reject a Commission-approved EAS plan. The proposed EAS rate change figures indicated on the ballot included ALLTEI.:s statewide rate restructuring, which eliminated subsidies and established consistent prices for similar services.
Final actions, rate determinations and implementation are to be accomplished on or before July 1, 1996.
First Step toNatural Gas Deregulation
The Commission embarked on a path of wide-ranging change when it sought input from inter- ested parties regarding guidelines and policies that will advance and enhance the transition :of natural gas services from regulated monopoly to free-market competition. Recent bypass threats and selected offers of discounted rates exemplify the increased pressure being felt by the natural gas industry to move toward competition. The PSC's Notice of Inquiry sought comment on the underlying issues, such as the array of services from which customers should be able to choose, new rate designs, possible legal impediments, and the role of the PSC during and after transition. .

KUDOS / OF NOTE
Enforcement officer Don Lively and officer trainee Nancy Martinez received commendations for their assistance after the crash of Atlantic Southwest Airlines Flight 529 in Carrollton on August 21.
Commissioner David N .. (Dave) Baker was appointed to serve on the Telecommunications Committee of the National Association of Regulatory Utility Commissioners; Commissioner Stan Wise was appointed to serve on the NARUC Gas Committee.
Several PSC employees provided e~pertise and assistance during Hurricane Opal. Bob Vaughan, the PSC's GEMA coordinator, managed the team of Dan Cearfoss, Sam Chafin, Jim Cole, Ed Hawkins, Randy Hudson, Clarence Lanier and Lucia Ramey. Another group, including Vaughan, Chafin and Hawkins, as well as Gilbert Bentley, Bob Gin:n, Carlton Kirby and deLancey Todd, assisted FEMAinspectors after the storm by helping EMCs and municipalities compile the necessary reports to ensure thadederal disaster furn;ls in the amount of $15,267,000 would be received.
The Transportation Division's Public Information and Education (PIE) program efforts raise the safety standards of Georgia's highways off and on the road. Enforcement officers guest teach in public schools, at law enforcement agencies, and to gatherings of transportation industry groups. Their enthusiastically-received messages emphasize "preventing accidents before they happen," and are reinforced by the imprinted handouts and specialty items(key chains, pencils, magnets). left with each group.
The twenty-one members of the Telecommunications Strategic Planning Team putforth a herculean effort and handled 26 dockets (six times the normal annual load) related to the impact of SB 137. In addition to one major rate reduction and the implementation of Area Code 770, the onset of telephone deregulation resulted in four companies receivi~g interim certificates to begin plans for providing local phone service, with another six filing to do the same. Further, long distance switching rates were reduced and. three phone companies elected altemativeregulation, thereby vacating the PSC's authority to settheir rates. Such issues as number portability, pricing guidelines for telecommunications to end users, unbundling services to competing j:Jhone companies and.resale rates will remain at various stages of rulemaking throughout 1996.
The entire Pipeline Safety staff was involved in a year-end operation to ensurethe repair of more than 200 hazardous natural gas leaks and bring peace of mind du~ing the holidays to residents of Dalton, GA. Director Mitch Ingram, Supervisor Danny McGriff and Inspectors Billy Donaldson, John McCarter, Bruce Morgan and Alan Towe spent more than ninety days and nights - most of them from mid- to late-December - overseeing the work of Dalton Utilities, the municipallyowned system serving the ~rea. Program Assistant Sheila T. Collins coordinated all associated filings and reports.

BUDGET
FY 1995-1 996
Revenue
General Assembly Appropriation ................................ :. $8,757,763 Federal Funds ...... , ............................................ 2,389,664 TOTAL ..................... : . ................... ,........ $11,147,427
Expense
Personal Services ......... , .................................... $7,033,660 Regular Operating Expense...........................................666,030 Travel/Per Diem/Fees & Contracts ......... : ....... , .. ; ............. 2,408,216 Computer Charges.................................................425,899 ,Motor Vehicle Purchases ........................................... 103,000 Real Estate Rents .................................................. 331,039 Other .................................. .. : ........... ............ 179,583 TOTAL ...................................................... $11,147,427
Associated Revenue
Regulated Company Property Taxes Paid Directly to Georgia Department of Revenue............................. :. $1,050,000
Regulated Company Fees Collected and Remitted to Georgia State Treasury (Estimate) .............................. 3,580,698
Total. (Estimate) ............ ...... ,,... ,.: ...................... $4,630,698
RELEVANT STATISTICS
Communications/Consumer Affairs
Consumer Inquiries ........... , .................................... 14,707 Consumer Complaints................................................ 3,950 Consumer Intra-agency Referrals .. , ................................ ; .. 31,543 Consumer Inter-agency Referrals .. : ............. : ..... , ................ 3,526 Media Inquiries ... ....................... ; .... : ...................... 581 Print Media Articles .............................................. , .... 708
Transportation
Vehicle/Driver Safety Inspections ..................................... 37,531 Vehicle Violations.................... , ................ : ............. 54,098 Driver Violations .............. _............ , ......................... 35,873 Hazardous Material Violations ................... : ..................... 3,187
Utilities
Telecommunications, Electric & Natural Gas Cases ......................... 782 Gas Safety Inspections ................................................. 571

GEORGIA PUBLIC SERVICE COMMISSION Bill Dover, Executive Director
Terri Lyndall, Executive Secretary
ADMINISTRATIVE DIVISION
Phil McMullan, Director, Budget & Finance
Jackie Thomas, Director, Human Resources Harriet Van Norte, Director, Commuriications/Consurrier Affairs
TRANSPORTATION DIVISION Al Hatcher,. Director
Lucia Ramey, Director, Compliance & Safety Don McGouirk, Director, Household Good~/Passenger & Rail Safety
Bill Chatmon, Chief Enforcement Officer Maria Dorough, Certification/Registration Officer
UTILITIES DIVISION B.B. Knowles, Director .
Ken Ellison, Assistant to the Director
David Burgess, Director, Rates & Research
Dan Cearfoss, Director, Electric Utilities Bob Evans, Director, Telecommunications Tim Hopkins, Director, Utilities Finance Mitch Ingram, Director, Pipeline Safety Phil Smith, Director, Natural Gas Utilities
A Publication of the Communications/Consumer Affairs Office HarrietK. Van Norte, Director
Carolyn F. Kowalski, Writer/Editor Shadow Grafix, Inc., Production/Design

~.eorgia Juhlit ~.er&ice @ommissiou
244 WASHINGTON STREET, S.W. ATLANTA, GEORGIA 30334-5701