Journal of the House of Representatives
of the Second Session of the 110th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 11, 1994

Page Finder Index
| Printed Page 2390, Feb. 24 | Printed Page 2410, Feb. 24 |
Printed Page 2400 . . . . . Thursday, February 24, 1994
Carolina House and Senate. Aside from travel expense, have you expended any other funds since your filing of this report?
A. No.
Q. Mr. Chairman, your staff has checked with the South Carolina Law Enforcement Division and also with the appropriate credit agencies and found that SLED have no reports of any judgments or criminal convictions on the part of Ms. Bowen.

In addition, her SLED report had no negative entries in the sense that there was nothing that was reported that would be an indication of any delay or failure to pay any of her obligations.

Moving on to talk a little bit, Ms. Bowen, about your preparation or experience that would help you serve on the Public Service Commission, if you had to name two or three hot topics that you would think that would be important to the Public Service Commission, it would be on the cutting edge in terms of being a successful commissioner, what would those topics be?
A. Probably number one would be the coming revelation in telecommunications. And I think that all of us hear on the news and read about it in the newspaper every day about the Information Highway and how -- how that's going to make things that today we only dream about happen for each of us in our homes.
Q. What would be the second thing?
A. Probably the second thing would be as it relates to water utilities. I think that the focus needs to be more on making the most of your resources that they have at hand.
Q. So that would be the demand supply?
A. I think it encourages conservation and efficient use of that supply.
Q. So demand side management for water utilities. As to the first revolution telecommunications, what responsibilities do you understand the Public Service Commission to have or authority do they have to impact on that revolution in ensuring that it is properly managed and it's fairly available to all South Carolinians?
A. Well, certainly, the Public Service Commission has had the regulation and supervisory authority to make sure that the rates that are charged --
Q. By whom?
A. -- are fair.
Q. By whom?
A. By the -- by those companies and those industries --
Q. Which companies --
A. -- operating within the telecommunications industry operating within the boundaries of this state. Those that are -- that are publicly available.

Printed Page 2401 . . . . . Thursday, February 24, 1994
Q. Which companies? What type of company would that be, Ms. Bowen?
A. Well, for instance, the telephone company. Southern Bell, you know. MCI, perhaps. You know there are any number up that could be potential.
Q. Would cable television companies be something subject to regulation --
A. No, I don't believe that they are.
Q. What -- in what manner would they regulate the revolution or how would they ensure fairness?
A. Well, I think that the important consideration is that the services are available at a reasonable rate. Reasonable being defined by it is reasonable for the company to have a rate of return commiserate with the risk that they are taking and it was their investment.

However, the people of the state of South Carolina should have that service available to them for a reasonable rate, so there is a balance that has to be found there.
Q. My limited understanding of the telecommunications revolution is that everybody is going to kind of end up being vanilla, whether they're going to be in a cable company or a phone company, you're going to be a provider of all sorts of information through various means.

If phone companies are going to go into the cable television business that would be as you said unregulated I believe by the Public Service Commission; is that correct?
A. It's my understanding and, again, I -- I don't -- I've reviewed the practice and procedure and also the available legislation of the Public Service Commission and it's my understanding that the cable companies do not fall under their jurisdiction.
Q. They are federally regulated?
A. Right.
Q. And if a phone company is going to go into the cable business, they're going to have to have the fiberoptic cable to go into cable television. Would it be appropriate for the Public Service Commission to allow a phone company to include in its rate base to be charged to its telephone customers the development of a fiberoptic system to supply cable television?
A. I would have to review that in more detail in order to answer you adequately, sir.
Q. Are you familiar with a topic called cross subsidization or the ability of a company to take costs that would generate unregulated profits and put those costs in the regulated rate base?

Printed Page 2402 . . . . . Thursday, February 24, 1994
A. I have been vaguely familiar with that, sir.
Q. What would you think the Public Service Commission would need to do to avoid that problem or is it a problem?
A. Well, I think that the -- potentially, it would be a problem because we would want to ensure that the customers that are paying for service are not subsidizing another service that that company can operate without regulation. And I think there that needs to be some attention to that matter. As far as --
Q. Are you aware of any utility that may have attempted or has done that in South Carolina to take an unregulated enterprise and attempt to include it in its rate base or at least benefit by some portion of the expense of that being included in its rate base?
A. I believe that I am a little familiar with that. I don't want to say who it is because I may be incorrect, but in --
Q. Would you talk generically about what type of operation was unregulated and what type of operation was regulated?
A. Perhaps a power company, for instance, that --
Q. What was the unregulated activity?
A. You know, perhaps the -- a nuclear power plant. That would come under the Nuclear Regulatory Commission, perhaps. I'm slightly aware of there was an instance, I believe, in regard to that.
Q. What role should the Public Service Commission staff play?
A. A very important role in terms of collecting the information that is necessary to review before the Public Service Commission makes decisions and administratively to make sure that the public is informed of the process and the proceeding.
Q. You mentioned earlier demand side management and you mentioned this twice, once in your opening when you talked about Sea Pines Public Service District and then you mentioned it a little while ago as one of your top issues.

This is, in fact, a concern to a number of environmental groups including the Sierra Club. What could the Public Service Commission do to encourage demand side controls as opposed to how they more or less now regulate from the supply side? What would you seek to do as a Public Service Commissioner?
A. Well, I think that you would have to really review carefully each individual circumstance. However, in the case, for instance, of a private utility who was seeking a rate increase based on an expansion into an additional water source, there may be encouragement -- there may need to be encouragement for certainty on the part of the commission to see that that utility has sufficiently explored all of their available options.

Printed Page 2403 . . . . . Thursday, February 24, 1994
And one of those options would certainly be water conservation. Other sources that may be less costly to the customers. In fact, that's what I have in mind most particularly.
Q. Ms. Bowen, when those things approach the company providing service. Companies typically are in the business of making money. If you asked them to sell for less rather than more, most folks would see that as the ability to make less money and in this nation of free enterprise, how do you accomplish that goal of selling less and making more?
A. Are you talking about in terms of water conservation?
Q. Any type of demand supply management -- demand side management?
A. Well, I think that you can address that in your rate structure to some extent such as at Sea Pines Public Service District had done by having a base rate for the initial usage and then having an additional higher rate for the overusage, so that those individuals that do overuse the resource are paying a higher rate and that to some extent will address the revenue question.

At least that's been our experience locally, that our revenue has not suffered. Our usage has sufficiently been stable and declined, however, our revenue has been very steady.
Q. Ms. Bowen, does the Public Service Commission have any responsibilities as to environmental impact?
A. I think that we have the responsibility to make sure from my understanding that the utilities are in compliance with whatever DHEC and, in particular, the waste water area, they are in compliance with whatever regulation DHEC has imposed on them.
Q. Do you have any statutory responsibility independent of whatever DHEC may do?
A. I'm not aware of that, sir.
Q. Are you familiar with the concept called Wheeling, W-h-e-e-l-i-n-g?
A. No, sir.
Q. Wheeling?
A. I do not believe I am.
Q. How about gas cooling?
A. No, sir.
Q. Gas cooling? What authority or what responsibilities does the PSC have for the regulation of motor carriers?
A. Of motor carriers, I believe that the responsibility lies in the rate setting. I believe it has been changed in the area of -- recently in that regard. I'm not aware of what specific changes were made with regard

Printed Page 2404 . . . . . Thursday, February 24, 1994
to motor carriers, but I am aware there have been some changes in the commission's duty in that area.
Q. What is the proper role of the Consumer Advocate before the Public Service Commission?
A. My understanding is they are always there to ensure that the public is well served and in that capacity that the ability for the company or the utility before the commission to generate a profit is equitably balanced against the consumers' ability to access the service on a fair basis.
Q. And what is your role, vis-a-vis, the Public -- the Consumer Advocate? As a commissioner, what type of role do you have, vis-a-vis, the Consumer Advocate?
A. As a commissioner on the Public Service Commission?
Q. Right. It is a cooperative role?
A. I would say that you're representing the public. That you are there to make sure that their interests are served. I see that as the one of the very important duties as a commissioner.
Q. So would you say you would have a cooperative role with the Consumer Advocate --
A. Well --
Q. -- in terms of rate hearings and siting hearings, that sort of thing?
A. No, because I see the Public Service Commission as being the authority and having the -- having the charge, if you will, to make sure that they are effectively balancing the needs of the Consumer Advocate with the need of the utility to be a profitable venture.
Q. So is it more judicial in nature, do you think?
A. I would say that there -- there's an element in that because they've got to effectively balance both of those roles. That's my -- that's my impression.
Q. Are you familiar with the concept of generational mix --
A. I'm not.
Q. -- production of power?
A. No, I'm not.
Q. And, finally, do you have any recommendations for improving the current system of screening for election of candidates or commissioners to the Public Service Commission based upon what you've been through so far?
A. I think that it would probably be helpful to have more advance understanding of what you as a body are looking to determine from the individual candidates. I think that that would give a -- more feeling of being better prepared in these proceedings.
Printed Page 2405 . . . . . Thursday, February 24, 1994
I must say I came in this room feeling very prepared. I read the legislation. I have read the public policy. I've studied the commission's records, but I leave it feeling a little bit less prepared.
Q. Mr. Chairman, that's all the questions your counsel has.
THE CHAIRMAN: Any members of the committee have any questions of this candidate?
SENATOR COURTNEY: Mr. Chairman?
THE CHAIRMAN: The Senator from Spartanburg.
EXAMINATION BY SENATOR COURTNEY:
Q. Ms. Bowen, I just want to ask you couple of questions about your service as a financial planner.
A. Yes, sir.
Q. Do any of your present or past clients own any utility stocks that are regulated by the Public Service Commission?
A. If they do, they only own it through a mutual fund.
Q. Nothing that you have recommended?
A. No, sir. Well, I recommend specific mutual funds. However, at this time I do not recommend individual utility securities.
Q. Are you willing to refrain from recommending any specific utility stocks to your clients if you are to serve on the --
A. Yes.
Q. -- Public Service Commission?
A. Yes, I certainly am.
Q. Do you have any association with any law firm or any attorney or anyone who appears before the Public Service Commission representing utility companies?
A. Not that I'm aware of. I work closely with many law firms on the island and in Beaufort. I'm not aware of any of their activities in that regard. But I work mostly in Family Court type matters.
Q. Thank you. Thank you, Mr. Chairman.
SENATOR JACKSON: Mr. Chairman?
THE CHAIRMAN: Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Ms. Bowen, I want to ask you a question about your previous employment as a marketing advertising executive.
A. Uh-huh.
Q. In that capacity, have you ever had an opportunity to represent a utility company or a company that was regulated by the Public Service Commission?
A. Only to solicit advertising from those companies. I was involved in that capacity. And I have since learned in my review of the voluminous
Printed Page 2406 . . . . . Thursday, February 24, 1994
materials that I have studied that the Public Service Commission takes out those advertising expenses in considering the rate process, which was interesting for me to find out.
Q. One follow-up, so you solicited advertising. Did you have one of the companies as a client and were you successful in representing?
A. There may have been occasions over my career where I was successful in soliciting advertising from a utility. I am not aware at this time of any specific instance, but it's quite possible that was the case.
Q. So you actually served as an advertising executive as opposed to Public Relations specialist? You did not represent them in trying to shape the public's perception of that company?
A. Well, that's -- it was closely tied to their advertising efforts and I would give advice to my clients with regard to how to frame their message and develop their advertising campaign. However, most of the larger utilities, if not all of them, employ advertising agencies to perform that function for them. And generally in those cases, I would serve as a go-between between the media and the advertising agency, so I would probably say that it was very rare if it ever happened that I would come directly to the utility.
Q. Thank you.
THE CHAIRMAN: Representative Wilkes.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Good morning, Ms. Bowen. First of all, I thank you for your wish to be a public servant and taking your time to come and talk with us and if I may put you at ease a little bit about the questions that we're asking, we don't expect any candidate to be able to answer every single technical question.

We're trying to determine your general knowledge of business and of law and accounting and what the Public Service Commission does, so I hope --
A. I understand.
Q. -- that puts you a little bit more at ease.

I'd like to ask you a question that just came to mind as you were talking. Recently, I read where the mayor of Hilton Head had taken a position against any further commercial or industrial development on the island. Given the fact that the PSC does play a role in -- a significant role in industrial development, if you have that same parochial attitude maybe that your mayor does, could you divorce yourself from that attitude and look at that economic development or industrial development on a statewide basis?

Printed Page 2407 . . . . . Thursday, February 24, 1994
A. Well, I can assure you that I do not share the views of our present mayor and I recognize the responsibility that I would have as a commissioner to put aside whatever personal feelings that I had on any issue and to only rely on the facts of the particular circumstances and statutes that I'm bound by.
Q. You mentioned a word a little while ago that is very important to me in assessment of candidates and that is balance. Today, we're faced with so many issues that are controversial and where you have advocates and adversaries and whether it's industrial development versus environmental protection or big business versus small business or urban development versus rural development, can you give us some idea of how you approach problem solving and decision making given the often time diverse views on issues like I just mentioned?
A. Well, I can probably give you a personal example of a process that I went through as a result of my coming over to Sea Pines Public Service District. And at that time the water issue -- the future source of water on Hilton Head had been agreed upon and determined to be the Savannah River and based on everything -- all the knowledge that I had of the situation and following that, I have to state honestly that my personal feeling coming on to that commission is that had probably been a very good decision.

Once I had the opportunity, however, to fully review all of the relevant matters that I had not been aware of and to study the financial side of the equation, however, I found myself first of all, having to remove my personal feelings as I made that evaluation having come to the process with an idea in my mind as to how I felt. And I feel like I was successfully able to do that and, in fact, really have changed my mind about the entire issue based on the financial analysis and the additional facts that have -- have come to light and, in fact, that has -- that opinion has spread and -- and there are other utilities on the island now who have also turned away from that solution, so I think that's one instance where I have employed that process.
Q. Thank you. One other quick question. On the matter of the cross subsidization that you were talking about a few minutes ago, I'm going to ask you maybe a bit more of a specific question than Mr. Couick asked you.

If, for instance, a real estate company were -- I mean the utility company were to have a real estate subsidiary, say, a wholly owned subsidiary in timber management, let's say, and I for accounting purposes was allowed to make certain journal entries that would shift profits and

Printed Page 2408 . . . . . Thursday, February 24, 1994
losses and expenses and depreciation, et cetera, from one company to the other --
A. Uh-huh.
Q. Would you think it important to ferret out all of this from the county standpoint before you made a decision in a rate making case, for instance?
A. I think that it needs to be clear to me what all of -- you know, what all the numbers represent in that case. And I think in determining, you know, what elements, for instance, of the asset base may be unrelated assets or income or liabilities, I think it's clear to have that understanding and then to be bound by whatever statutes are in place to act with that knowledge. I would think that that --
Q. In other words you would require full disclosure on all of the activities of that utility?
A. Well, if it is relevant to the rate making case, then certainly, I would -- would pursue that.
Q. Thank you.
A. It may not be bound by the statute.
Q. Thank you very much.
THE CHAIRMAN: Any other questions? Yes, ma'am.
EXAMINATION BY DOCTOR HATTON:
Q. Ms. Bowen, who could help you to inform you what the public policy issues are to be resolved if the Sea Pines Public Service District were to reach out to those people who don't have services and try to serve them? What public policy issues are involved in your making that kind of decision?
A. Well, I think that for a long time it has been apparent to us as a commission -- and we are not the only commission, let me clarify that. There has been discussion of forming a coalition of either of the other utilities with the town to address the inequity.

I think there is a number of policy issues that have to be resolved before that can take place. One of those, of course, is that the present customers being served by that utility have paid for their service. They have -- they paid for their service. They have -- they've paid for their portion of the treatment plant and I can understand or anticipate that they perhaps might be unwilling to subsidize those that don't have service, but I'm also aware that there is a precedent in other areas for doing so.

I'm aware of, you know, the electric companies that help people who can't pay their bills and, in fact, this commission has some interest in that regard in making sure that those that are financially disadvantaged have those services.

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They're not luxuries. They're necessities to people. And I think that because of that distinction that it's not a luxury that those are the necessities, that we all have an obligation to make sure that those are available to everybody. So I feel like that there -- there are valid concerns, but I think that they can be addressed effectively.
Q. Thank you very much.
THE CHAIRMAN: Representative Kennedy, any questions?
REPRESENTATIVE KENNEDY: No.
RE-EXAMINATION BY MR. COUICK:
Q. Ms. Bowen, I had failed to ask you. You indicated that you had no security interest that you would see the conflicting out (phonetic) from service on the commission. Do you have any utility stock?
A. No, I do not.
Q. Does your husband own any utility stock?
A. No. I own I believe some shares in British Petroleum Oil Company.
Q. Thank you.
A. And several mutual funds which may own utility stocks in those mutual funds.
THE CHAIRMAN: Ms. Bowen, on behalf of the committee, I want to thank you for offering as a candidate for the Public Service Commission. First, a person with your background and knowledge, it's commendable that you're seeking a public job.

I find in recent years it's difficult to get some people to reach out and serve the public because of the criticism they take. The effort we're going through here this morning is brought about largely because of the fact that we're heard this said all the time, the public wants to know, the public has got to know.

As a result of that, we're here trying to do what we think that the public has demanded of us. You are a commendable candidate and I thank you for coming. The next candidate.
MR. COUICK: Mr. Chairman, Ms. Clyburn is on her way.
A. May I ask a question?
MR. COUICK: Yes, Ms. Bowen.
A. Would it be possible now that I've been through the process for me to sit in on some of the other candidates? Has that been --
SENATOR COURTNEY: Mr. Chairman, the only problem I would see with that is potential for follow-up questions later if something comes up that.
THE CHAIRMAN: Our policy would be that once you're sequestered, you're sequestered, Ms. Bowen, if you are a candidate. We could discuss with you the implications of it, but --

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