| Printed Page 2520, Feb. 24 | Printed Page 2540, Feb. 24 |

If you had a rate increase request from a utility, let's call it SCE&G for simplicity, and they needed a rate increase that was justified to the extent that they were not going to be able to make money, the proper amount of money in return for their investors. But at the time they made the request, it was hard economics in South Carolina in their service area. Folks were being laid off and folks were having a hard time because the economy was not strong. What would be your thought process as you went about deciding whether to grant the rate increase or not?
A. I would have to remember that the middle class is employed by corporations and if it were needed -- a rate increase were needed to keep the power going, whatever company that might appear before you, I would have to consider that first. Only in Columbia, we, State employees throughout the state are dependent on the corporations.
Q. Mr. Chairman, for the benefit of the committee, a credit check and SLED check have been made of Ms. Reese and they both came back negative in the sense that there were no negative entries on either one.

Ms. Reese, is there anything else that you would like the committee to know about you that would tend to convince them that you're the right person to serve on the Public Service Commission at this time?
A. You're probably all wondering why I'm here. It seems to be totally out of my field. I am looking for a challenge. I've taken challenges before. You note on my record that I did start a business in the seventies. I started with $500. In a year's time, I was paying bills over $5,000 a month and taking home a salary. I am successful. I am a successful person. I took over the running of the yearbook knowing nothing about knowing art, nothing about photography. In two years time, my book won the highest award possible in South Carolina.
Q. Congratulations.
A. I'm a success oriented.
Q. Thank you. I've had a note passed up here to me from one of the committee members that I wrongly attributed my question on hard times to Mr. Wilkes when, in fact, it was Senator Courtney. Senator Courtney wanted credit for that.
A. You stand corrected.
Q. And, finally, Ms. Reese, do you have any recommendations for this committee to improve its screening process? While you're in it, have you noticed anything that you would like improved?

I was still in school in the seventies and I don't remember.
A. Well, I was a divorced mother of two trying to pay bills on a school teacher's salary and I couldn't pay the utility bill. It was sky high for my income.
Q. You were speaking primarily about the economy then more or less?
A. I think the economy was greatly influenced --
Q. I know interest rates were high and everything else back in those days.
A. So were the utility rates.
Q. I agree. One other question, I don't think Mike asked you, if you were elected, what would you do with your present job? Would you continue or would you --
A. No, I would not.
Q. Thank you.
A. I see this as a full time job with much research to be done.
THE CHAIRMAN: Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Ms. Reese, let me thank you for agreeing to offer
as a public servant. Let me ask you one question as it relates to the information on your Personal Data Questionnaire. You stressed your uninvolvement in politics. Why was it necessary in your mind to stress your uninvolvement in politics, do you think?
A. I was searching -- I am squeaky clean. I think that is a merit.
Q. You don't think politics is squeaky clean, is that --
A. You didn't have to investigate me.
Q. Okay. Thank you.
THE CHAIRMAN: Any other questions? Thank you very much, Ms. Reese.
A. Thank you.

1. Margaret B. Reese

Home Address: Business Address:

430 Yachting Road Irmo High School

Lexington, SC 29072 6671 St. Andrews Road

Columbia, SC 29212

Social Security Number: ***-**-****.

3. South Carolina Driver's License Number: *******.

South Carolina Voter Registration Number:0 652 833.

4. She married Michael S. Seigler on September 7, 1986. She has two children: Margaret L. Reese, age 31 (Professor at St. Olaf in Minnesota) and Jesse Timothy Reese, age 29 (insurance sales).

6. She attended Converse College from 1960 until her marriage in 1962; received a B.A. at the University of South Carolina (1968-1969); and received a M.Ed. from the University of South Carolina in 1983.

9. She was the owner/manager of a children's clothing store from 1975 to 1977 and a public school teacher for 21 years, from 1971 to 1993.

26. Professional organizations: National Education Association; National Council of Teachers of English.

27. Civic, charitable, etc. organizations:PTA (Irmo schools); Columbia Shag Club.

28. She stresses her un-involvement in politics, her ability to learn and research, and her simple financial status.

29. Five letters of reference:

(a) Ms. Pat King

438 Yachting Road

Lexington, SC 29072

(803) 957-6494

(b) Ms. Linda Sligh

308 Century Drive

Columbia, SC 29212

(803) 772-6833

(c) Becky Costner

Branch Manager, Columbia Teachers FCU

P.O. Box 5846

Columbia, SC 29250

(803) 732 2348

1425 Saluda River Drive

West Columbia, SC 29169

(803) 796-9556

(e) Robert L. Rollings

240 Jamil Road

Columbia, SC 29210

(803) 798-8757

30. She is seeking the position of Public Service Commissioner for the Second District.

THE CHAIRMAN: I think you've done a -- next.
MR. COUICK: Mr. Scott, if you'd raise your right hand.
CHARLES DUKES SCOTT, having been duly sworn, testified as follows:
MR. SCOTT - EXAMINATION BY MR. COUICK:
Q. Thank you. Please have a seat. Mr. Chairman, in reviewing Mr. Scott's license, I see that he lives at 6413 Pinefield Drive, Columbia, South Carolina, 29206. His voter registration card also lists that same address. Mr. Scott, I understand that's in Richland County?
A. Yes, sir.
Q. And you've lived there for some period of a time, I take it?
A. Since 1978, yes, sir.
Q. Mr. Scott, we've had an opportunity to review your documents including a report from SLED and from the credit bureaus and find no negative entries on either one. Also for the benefit of the committee, I'd like to ask you, do you currently own any stock in a publicly regulated utility?
A. No, sir.
Q. Does your wife or anyone else that lives in your household own any utility stock?
A. No, sir.
Q. You earlier reviewed a copy of your Personal Data Questionnaire Summary?
A. Yes.
Q. Did you see any corrections that need to be made on that?
A. There was a question mark as to my first wife and her name was Debbie. She was Deborah Ann Seabrook when I married her.

And I've had some additional expenses, I think maybe 30 or 40 dollars expenses --

I would be one of seven as far as direction of the staff and one of seven would be to instruct Mr. Ballentine to carry out the policy of the commission.

As an employee, I carry out the policy as set by the commission. As a commissioner, I hopefully I would be involved in setting the policy.

The transition I think would be a smooth one. I have in the past served strictly as executive assistant to the commissioners. For example, from 1986 until 1987, I was executive assistant to the commission. I had no staff responsibility other than for the commissioners' secretaries, but other than -- but no staff responsibilities at all.

I was advising the commission on policy, so I have been in the role where there was no line authority, if you will, for the staff, so I think that my experience as executive assistant to the commissioners will help me move into a policy making role and give up the day to day supervision of the commission staff.
Q. Mr. Scott, I realize that the question I'm getting ready to ask you may seem a little bit pointed particularly in view of the fact that you have

What improvements would you make? And without that being condemning of what practices are there now, what improvements would you like to see at the commission?
A. Yes, sir. I appreciate your concern about that because although the commissioners aren't in here, I imagine they'll have access to this.
Q. Yes, sir. They asked me to ask you this.
A. But, in fact, it's an easy -- it's not difficult because I have a great deal of respect for all the commissioners and that's a question I have given some thought to.

One thing as a staff member, for example, in the national organization, the Southeast organization, that national organization has a lot of input in Congress and they testify before Congress and can relate some state concerns to the Congress.

As a staff member, you cannot be on a main rule committee. They have subcommittees that are made up of staff people, but the commissioners are on those committees. And that would enable me -- I hope to be one to be able to assign, to go to Washington at times when necessary. I'm not on -- just going traveling, but to try to explain positions that the states are in because sometimes, you know, we got rural counties here and some things that Washington thinks don't exactly fit and so I think --
Q. Could you give an example of what -- of a topic where you feel like there is a necessity for federal action to either relieve a burden of a current federal law or some necessity for federal legislation to assist in South Carolina?
A. Well, one concern I have is, and it's a good thing, but, you know, this informational infrastructure. I think the states need some input in that to be sure that all the states and all the people within the states get the benefit from that.

It's not going to be difficult to link up the Medical University of South Carolina with Richland Memorial Hospital and there is nothing wrong with that. But with this infrastructure, a doctor will be able to take an x-ray in Richland Memorial and talk to a doctor who is going to be looking at that x-ray at the Medical University of Charleston.

That's going to be -- that's going to be one of the first link-ups probably there is, but people in Winnsboro also are going to need that, people in Bowman, where I have some family, outside of Orangeburg is going to

This open access to -- and when you mention open access, you talk about electric and you talk about natural gas and you talk about telephone. You know, that's good. And it has some valid points, but when you do that, you've have got to -- I think we've got to keep in mind that we've got some small customers out there who may have some costs shifted to them.

It's estimated that Article 636 out of the Gas -- Federal Regulatory Commission is going to cost 1.2 billion dollars in restructuring costs. And where is that 1.2 billion dollars going? It's going to go to the customers who can't transport their own gas. And who is that? That's the residential customers and small commercial customers. And I'm not -- I understand that 636 has some benefits. I mean what's good for industry is not necessarily bad. I understand that, but we need a voice to make sure that these costs that Washington -- that came out of the FERC.

Down here at the commission level, we've got to be concerned -- but we need to be sure that as far as 636 goes in effect, that these costs are shifted. That we've got some protection there for the small and the retail customers, those firm customers. And it's estimated that Southern Natural which supplies a lot of gas to our customers in South Carolina, that's 200 million dollars. And that 200 million dollars is being -- in restructuring costs is being shifted. Shifted where? It's shifted to the small customer who can't transport his own gas.
Q. Let me ask you one question related to that and you -- there's been a lot of talk about deregulation. And one aspect of deregulation, there seems to be a lot of talk about wholesale wheeling of electrical power?
A. Yes, sir.
Q. And if you apply that to the next level and totally open up free enterprise, you would have retail wheeling?
A. Right.
Q. Talk about that a little bit. Are there -- what problems are inherent in that and --
A. Yes, sir.
Q. -- is that a concept where free enterprise can make things cheaper and folks have a choice who they buy from?
A. Everything that you read about does generally benefit and for every benefit, there is usually a disadvantage and this is where -- again, I think the states have got to stand up.

We ended up with another key word of unbundling in the past. And you hear that word, you hear it in gas, you hear it in the telephone, you hear it in the electric area. In the past we used to -- the same company bundling electric service. I mean it's all in one neat package. Ms. Masse, who used to be chairman of the commission, she died in 1990. We kept talking about unbundling in the telephone industry. She ordered me not to mention that word again because she got tired of hearing about unbundling.

But we packaged it all together, you've got the generation, the transmission and the distribution altogether. There was one exception, the wheeling station down in Charleston is now a separate corporation from SCE&G.

Generally, that's the way we've been doing it. Well, what they're trying to do is make competition available in the wholesale generation of electricity. Now, I think there is some benefit to be there, but one of the issues you need to be concerned about, I'm not necessarily trying to tell ya'll what you need to be concerned about, but I think we need to be concerned about is the reliability of the generation. As the companies plan for the future and meet that load, they -- like yesterday or the day before yesterday, Duke Power Company reached 16,000 megawatts of demand. That's a record for Duke Power Company. That's more then they reached on July 29th of last summer on that real hot day when everybody passed it, too.

Well, when that day comes, South Carolina -- and CP&L reached a record, too, now. SCE&G for some of the people because they got more capital. But I say all that, you need to be sure that when you give up the control of the generator, that is, when the distri--- the LDC gives up control of that generator of electricity, you need to be sure that when you need 16,000 megawatts of electricity that that person is going to give it to you. And if you don't own it and you don't regulate it, there is no way to guarantee that. Of course, there is no guarantee on any of them. A nuclear plant can go down, we know, but you got more control over it. So there is a downside to it and how much you can depend on the wholesale dealer. I'm not arguing against the wholesale generators. I do

| Printed Page 2520, Feb. 24 | Printed Page 2540, Feb. 24 |