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But we do have the subpoena power if needed, but generally, we don't need it.
Q. Do you feel that you're able to get what you consider to be accurate information pertaining to the actual expenses of the utility companies in production of power and so forth as opposed to expenses that they may incur from other investments that do not pertain to generating the power?
A. Yes, sir. We're real comfortable with it. The commission in the case of SCANA corporation held a proceeding which went over a couple of years to try to ensure that we had access and information, so there is not cost subsidization and there is unfair advantages and the commission came out with an order regarding how that information is to be provided, when it's to be provided and how it's to be provided.

We even have access in a holding company book as a commission staff. We have some 19 accountants on board with the commission, board of CPAs. They don't just ask information and get it, they go to the premises and audit and we audit by sample and otherwise.
Q. That's fine. And, you know, we talked a little earlier about the different hats that you wear and so forth, do you feel that the commissioners need to be more judicial as opposed to a part of the Executive or a part of a Legislative branch? Do they need to be more like the Industrial Commission, for instance, to just make rulings?
A. No, sir, I think the way it is, is the way it ought to be.

You see, the commissioners deal more with than just contested cases. I mean that's one aspect of it, but the commission is policy people. And policy people -- it's hard to make policy on a case by case approach. You need people from different backgrounds, different interests, different levels of interest. You need them from consumers.
Q. The policy making part of it seems to be something that you find to be important, and I appreciate that. Do you feel that -- just going along that line, do you feel that municipalities, for instance, that own their own

It's a real issue once they leave the boundaries. We have people call and say well, I don't have any representation on the one hand. On the other hand, you can have -- it's not necessarily whether let's substitute something for it. I think that there -- that the General Assembly may look at through hearings or otherwise, look at a ratio. I mean there are reasons for charging.

I live outside the City of Columbia and pay the higher water rates, so I'm speaking from the know. But I think that some ratio could be set that so long as that ratio was maintained and then in a rate increase, you raise one, you raise the other. There is a protection there because you're raising inside the city people, too. And so I think that so long as they stay on that ratio, then I really don't think that the full regulation is necessary.
Q. Well --
A. It's going to add the costs to the city sit and that sort of thing. Well -- excuse me.
Q. As opposed to full regulation and no regulation, is that what you're saying?
A. Yes. Something, for example, if the relationship now is one and a half times in city and out of city or that's what -- not necessarily what's now, but what ya'll found to be reasonable and all of a sudden they double the rates of the outside and kept the inside people the same, then it seems like the people may need a place to go to complain. So maybe a formal complaint, if something like that happens, that there may be some oversight. I don't think --
Q. There are arguments for and against the fairness of doing it that way, but --
A. Yes, sir.
Q. -- you don't feel that it's a problem for people who live outside of a municipality to have no -- of course, they can't vote for or against the mayor or the council to control the rate. You don't feel that it's important to them to have some protection from third party such as the PSC whether or not their rates are going to go up?
A. And, certainly, if ya'll -- if this General Assembly decide that the commission ought to regulate, I'll be the first one in there doing the best

I mean I can't vote for the mayor or the city council who decide what rate I pay for water, but I feel like that as long as they keep my rates relatively on a ratio -- now I do feel like I probably ought to pay a little more than someone that is paying city taxes, then they -- but the city council is going to have to respond to their residents and the voters in the city if they have to raise both of us at the same time.
Q. Thank you for answering that question. I think Mr. Couick may have asked you, but do you or any of your immediate family own any stocks in the utility companies?
A. No, sir.
Q. Thank you. Thank you, Mr. Chairman.
THE CHAIRMAN: Any further questions?
EXAMINATION BY DOCTOR HATTON:
Q. Just recently -- I appreciate the way your testimony here has illuminated the policy making role of the PSC. We haven't heard a lot about that in the last day or so, but I wasn't quite sure what disincentives you think there ought to be with the wrong kind of cost shifting that you discussed very early on.

I wasn't quite clear what you thought the disincentives to such cost shifting should be and where we are missing the boat in that --
A. I don't want you to miss the boat yet because the Restructuring is still taking part, but I think that we
-- and this is where we are going to have to go to the FERC and let the FERC know that there are other people down here because they're almost taking it out of our control when they shift the cost similar to taking a pay cost. So I think that we need a voice in -- before the Federal Energy Regulatory Commission and before Congress, if necessary.

And because I think that there is some demand placed on the system by the interruptible customer and that someone -- that demand ought to be paid for. You argue about the interruptible, so they don't place the demand. But when that switch gets cut, we get complaints.

I mean they're putting some demand on it and I think some of those demands -- I don't think they ought to shift all the fixed costs from the interruptible -- and I don't mean to bring down the industrial customer. No, ma'am, I understand they provide jobs. We need industry and that's a real balancing approach.

But it seems like something -- they do -- you know, they say, well, you cut us off with the -- well, you cut us off, well, they cut them off, but then the industry closes and you've got people out there out of work. And

One of the other candidates made mention of the fact that -- if I understood him correctly, that possibly in fiberoptics and other things that technology is out running the need and may be driving the cost up of -- in certain areas and, secondly, the question of regulation of the cable industry came up. Some mention made of the federal regulations. Some other folks indicating maybe there is no regulation. Would you respond to that two-part question for me, please?
A. Yes, sir. On the issue about the fiberoptic, we're getting a lot of fiber in the state by different companies and fiber is so good in one respect in that when you -- you know, once you dig the hole and put it in the ground, it's not going to cost you much more to be able to carry a million pieces of data on that fiber as ten pieces of data, so you might as well put it in there. We're getting a lot of fiber.

And to the Vice President's credit, I think that's what he's trying to get out a little bit in this infrastructure because the fiber is going to be in the metropolitan areas if we don't watch it and the rural counties and the rural areas are not going to get a part of it.

We don't have people coming in here and wanting to provide alternative forms of access to the telephone companies in Bowman town. We have -- we're going to have them wanting to provide it in Columbia and Spartanburg and Greenville and Charleston, so I think that that's part of

Cable TV is an area in which -- we get a lot of calls about cable TV, not so much necessarily about the rates. There are some rates. We tell them we don't regulate it, but we still need -- I mean they don't know that when they call.

But if the service -- there doesn't seem to be an obligation to serve. And you come down to -- and, again, if the General Assembly decides that the commission ought to regulate it and if I'm there -- hopefully, if I don't get to be a commissioner, hopefully I'll still be there as a staff person -- we're going to be prepared for it and we're going to do a good job of it whether as a commissioner or as otherwise.

But, you know, one consideration is, you know, whether MTV and Showtime and Cinemax, whether those are necessaries of life. You know, we're dealing -- we deal with the commission with natural gas that heats people, that keeps businesses open. We deal with electricity. That's just got to be a necessity. The telecommunications is a necessity. On water and waste water, which is a necessity. Motor carriers, and we don't give much attention for motor carriers anymore, but it's still a viable regulatory process. It's not -- I don't think there is any good in this room that didn't come -- get on a truck at some point in time. So that's important to us.

You know, and not that cable is not, but MTV, when the children were at home, you thought it was a necessity, but I'm not so sure how necessary it was. But I think that the Cable Act has made some progress. It has given some regulatory authority over the basic package which may indeed become a necessity, you know, that the network and local television that pays that package has given the cities or the counties the franchise authority some recourse on rates.

The duty to serve ought to come from the franchise. It seems to me that part of the franchise agreement that the City and Town enter into is some duty to serve and there doesn't seem to be one. I mean if it's not profitable, they don't serve it.

Now if you want -- if you're a resident and you want electricity, you're going to get electricity, I think, in this state. If you're a resident and you want a telephone -- now you don't necessarily have access to natural gas. That's a different matter, but the cable TV industry, there has been some progress already made. I'd like to wait and see perhaps some of the concerns have been taken care before we jump further.

Once you -- once a telephone company, once they put fiber to your home, they can take a picture there as easily as they can a dial tone. And so you're going to see a lot of changes and people talk about cable getting the telephone and telephone getting the cable, the electric companies are going to be putting fiber to the home, too, because they want -- don't want to send that man out to read the meter. They're going to be able to sit in the Columbia office and read my meter and how they're going to do it is fiber.

Once they put the fiber in your home, it's going to do more things than read the meter every -- once a month, so I think -- and, again, we do what ya'll tell us to. Ya'll make those decisions, but if you ask for opinion, and I think you did, I think maybe we ought to wait and tread a little cautiously before we have all right -- all out regulation of the cable TV industry and see what this Cable Act is going to do and what this National Information infrastructure --
Q. And that's very important. I saw an on the TV the other day that said your television may be answering your telephone, et cetera, et cetera.
A. Yes, sir.
Q. So we tend to be moving in that direction which obviously means that the dynamics are going to eventually cost someone somewhere to have to make some very serious decisions?
A. Yes, sir. I don't know whether she is, but you may be reading the newspaper on the television one day.

1. Mr. Charles Dukes Scott

Home Address: Business Address:

6413 Pinefield Road P.O. Drawer 11649

Columbia, SC 29206 Columbia, SC 29211

2. He was born in Orangeburg, SC on August 21, 1949.

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

3. S.C. Driver's License Number: *********;

S.C. Voter's Registration Number: 1852003.

4. On September 10, 1978, he married Judith S. Scott. He was previously married to (?) until his divorce in June of 1978. He was the moving party in the Richland County Family Court.

5. Military service: U.S.A.R., Rank Captain, Honorably Discharged in 1979.

6. He graduated from Orangeburg High School in 1967, and received a B.S. from Clemson University in 1971. He graduated from the University of South Carolina School of Law in 1974.

9. He was an attorney with Leventis and Scott from 1974 to 1981. He served as staff attorney to the Public Service Commission from 1981 to 1985. From 1985 to 1986, he practiced law with Willoughby & Scott. Since 1986, he has served as the Deputy Executive Director and Executive Assistant to the Commissioners of the Public Service Commission.

19. From 1981 to 1985, and from 1986 to present, he has worked with the Public Service Commission. His duties have included advising the Commissioners and the direct operation of the staff. Charles W. Ballentine is his supervisor. Since 1992, he has worked with the Budget and Control Board, General Services, as an advisor to the State Energy Office under Jay Flannagan.

26. Professional organizations: South Carolina Bar.

27. Civic, charitable, etc. organizations:Forest Lake Presbyterian Church.

29. Five letters of reference:

(a) Charles W. Ballentine, Executive Director

South Carolina Public Service Commission

P.O. Drawer 11649

Columbia, SC 29211

737-5120

(b) Helen Zeigler

1711 Hollywood Drive

Columbia, SC 29205

799-3805

(c) Marjorie Amos-Frazier

361 Ashley Avenue

Charleston, SC 29403

723-0051

(d) Dr. James I. St. John, Pastor

Forest Lake Presbyterian Church

6500 North Trenholm Road

Columbia, SC 29206

787-5672

(e) Frances Robinson, Member Services

S.C. State Credit Union

800 Huger Street

P.O. Box 726

Columbia, SC 29202

343-0300

30. Second District.

THE CHAIRMAN: I don't want you to get too mad at me, but I have to admonish you. We've been here since 10:00 o'clock and we've gotten through two applicants and we've got ten more to go and I'm going to leave here at 3:00 o'clock this afternoon somehow or another, so I just

And that was one of the big problems with the bonded rate people. When they filed a rate increase, they filed it and put it in under bond and we had a year to get it out. By the time we got to it, the people thought it was another rate increase, but it was the same increase that we were talking about several months. So I studied that at length and talked to some people with -- some commissioners and went over and met with Governor Riley and suggested and asked his support and that's one of the greatest things that's happened.

Now in doing that, they changed the statute saying that -- this is getting back to your original question -- saying that the water and sewer cases shall, have just three commissioners. Well, in my opinion, that should go back to seven, seven commissioners. Change the word to may because to lots of people water and sewerage problems are a major in their mind and they feel like seven commissioners or five or six is better than just having three commissioners there. So right now that's the only
-- the most important change I personally think should be made.
Q. Mr. Butler, do you own any utility stock?
A. No, sir.
Q. Do you live by yourself or do you have anyone else in your household?
A. No, sir, I live by myself.
Q. In terms of the responsibilities that you had at the commission, you've been there quite a while. Do you look forward to fully serving out this term if you're reelected?
A. Yes, sir. And maybe another one, if I'm lucky.
Q. Mr. Chairman, we've had an opportunity to review Mr. Butler's credit report and report from SLED. They're both negative in that there

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