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 2580, Feb. 24 | Printed Page 2600, Feb. 24 |
Printed Page 2590 . . . . . Thursday, February 24, 1994
built and the Public Service Commission in all states, in some places they're referred to as the Utility Commission, are going to have to react to federal legislation that will come down.

There is a lot of deregulation being talked about in the federal government. Not only in that communication industry, but also in the trucking industry. It's going to require the State of South Carolina to probably pass some legislation, maybe look at repealing some other legislation.

And I think that with my past legislative experience that I'd be a real asset to the Public Services Commission in dealing with the legislators. I feel like that I know a good many of the members. I know the process. Also the -- according to the Appropriations Bill that is currently being discussed, there are approximately 45 state agencies that are state -- or lobbyists that are employed by state agencies and, of course, the Public Service Commission does not do that. So I think that it's important that the Public Service Commission have a commissioner who is very familiar with the legislative process and knows how the process works and to work hand in hand with the Legislature itself.
Q. You were talking about the telecommunications revolution and the need to legislate in that area perhaps. What deficiencies specifically can you note in the legislation that we have now governing telecommunications that you think would need to be corrected?
A. Very -- very specifically, I would make this comment, I can't be specific on a particular, you know, part of the statute law or something like that, but to use an example, for instance, at this time the -- a lot of the phone companies are running fiberoptic cable and they would like to get into the cable business.

The cable business, say, TCI here in Columbia was just bought out by Bell Atlantic. They want to get into the cable business. Southern Bell, I think is in the telephone business, would like to get into the cable business. TCI would like to get into the phone business.

In regard to that type of innovation that's coming on-line, technology methodology of doing things is just totally changing. One of the problems that we have in the industry itself is that obsolescence is now -- obsolescence of equipment is now more of a problem than wear and tear on the machinery.

I think that one thing the State Public Service Commission is going to have to look at is to look at the length of time that we allow the phone companies, telecommunications people doing business in the state, the length of time they amortize their equipment over. I think we're going to

Printed Page 2591 . . . . . Thursday, February 24, 1994
have to look at shorter periods of time because what's in service today, three years from now will be obsolete.
Q. Yes, sir. What -- just in terms of kind of looking at this from a broader perspective telecommunications, do you not see a tension there between folks who want to make telecommunications everything, allow all those things into the rate base perhaps of a phone company and that lady who lives in Pelzer, South Carolina, who just wants to be able to pick up her phone and get a dial tone to call the doctor and what effect that may have on her phone bill and how would you handle that tension if there is some there?
A. Well, I think people should only be charged for the services that they actually get themselves, but the availability is going to have to be there for people who want more service.

You know, I would kind of use an analogy of basic cable which has in Greenville five channels that come in or you can buy more. You can ESPN and CNN and all those things. And I think that as far as basic service is concerned that it should be and is the primary responsibility of the telephone utilities. And there are several programs in place that, for instance, helps with the cost of poor people being able to have installation.

And so to provide service and service is wanted and needed, the cost should not be borne by the little lady who only needs service on a limited basis to make sure she has contact with her neighbor or with her doctor versus somebody maybe who wants, you know, the evening newspaper over the computer in their office or all the cable channels and all these types of things.
Q. In that instance, Mr. Bradley, if that lady in Pelzer has that phone and the Southern Bell Company decides to run fiberoptic because the doctor's office and the lawyer's offices want to be able to link up with folks in other parts of the country, they run fiberoptic in place of the copper coaxial cable they have down now, which certainly does the job for the phone service and that runs by that lady's house and they automatically tap her into that or take it all the way to the house depending on what plans they have, is it appropriate for the doctor and lawyer to be bear the cost of her doing that or does she really have a choice? I mean, how are we going to allocate these costs where what we do is change over the whole system when the existing system handles the base level of what folks need now?
A. I think that what we're going to have to look at is that the base service that people get at this particular time that their costs would be pretty much in line with what they're paying now, particularly -- you know, there are a lot of different variables in the formula, but I would just

Printed Page 2592 . . . . . Thursday, February 24, 1994
say that we just have to look at providing the basic service that somebody is now getting at about the same basic costs.
Q. There are lots of different hats that folks wear at the Public Service Commission and even individual commissioners differ in their priorities. You mentioned that you thought that yours, to some degree, was to be a
-- I don't want to use a word that's disparaging because certainly I personally feel there is no -- nothing negative intended by the word lobbyists. You thought you would be a lobbyist from time to time.

If that's one hat that you could wear, a lobbyist, another one is a traffic cop, another one is public relations generally with the consumer -- consuming public and the other is a judge, which one do you think you'll be wearing most often?
A. Well, the purpose of the Public Service Commission is to make sure that access to all utilities is available to the consumers, that it is at a fair price and that the utilities get a fair rate of return on their investment.

Utilities are a little bit a strange animal in the business world because they in the past have been somewhat granted a monopoly or monopolistic and it just creates a different atmosphere. The -- they primarily get their money for capital improvement from investment and it's the responsibility of the Public Service Commission to make certain that their rate of return is fair and acceptable and it does create the atmosphere for the investor.

And to say specifically which hat did I feel like I would wear most regularly, I think it depends on what's happening at any particular given time. If you're having a rate hearing on an electric rate increase, say, from SCE&G, I think you're wearing one hat. If you're dealing with pipeline safety requirements in natural gas, you're wearing another hat.

If there is a piece of legislation over in the capitol that effects the consumer or effects, you know, the Public Service Commission and the operation thereof, if you're talking about the Administrative Procedures Act and regulations being presented to the General Assembly. It just depends on what's happening, which hat you're wearing.

You say you'd wear one more than another in any one given year, I don't know that you could say that.
Q. You graduated from Furman University in 1969, what did you take your baccalaureate degree in, Mr. Bradley?
A. Business Administration. And I had several courses in government finance.
Q. Mr. Bradley, you have recently served on the South Carolina Election Commission?
A. Yes, sir.

Printed Page 2593 . . . . . Thursday, February 24, 1994
Q. And, please, if you would inform the committee although they have a copy of your letter of your recent decision with regard to your services.
A. Yes, sir. Be glad to. I made the decision back early in December that I would resign from the South Carolina Election Commission before meeting with this panel. It was my opinion when I served in the General Assembly that if you basically had one office and you wanted to seek another, that you should give up one before you seek the other.

Also particular with the State Election Commission, what we have tried to do and I personally have tried to do is maintain the integrity of that body. And I don't want anybody that is -- you know, I would possibly be asking for support for this to say, "Well, maybe I ought to support Bradley because if I don't and then I have a contested election, I've got to go in front of him for a protest hearing," and I just personally want to take myself out of that position. I don't want anybody to feel that way. I would like to have the support based on my qualifications and ability to do the job. And that purely and simply alone.
Q. Mr. Chairman, that's all of my questions.
THE CHAIRMAN: Any questions from any member of the panel.
SENATOR COURTNEY: Mr. Chairman?
THE CHAIRMAN: Senator Courtney.
MR. BRADLEY - EXAMINATION BY SENATOR COURTNEY:
Q. Just a couple. Mr. Bradley, you spoke several times about your past experience and how that would help you as a Public Service Commissioner?
A. Yes, sir.
Q. And you talked about the communications highway and so forth and how your past experience would help you with that, what is your past experience?
A. My real estate experience, my education experience and my experience in the legislature itself. With my real estate experience and my appraisal experience, I understand the relation between cost, profitability, marketability.
Q. That's all I have, Mr. Chairman.
THE CHAIRMAN: Any other questions from any member of the panel? Representative Wilkes.
EXAMINATION BY REPRESENTATIVE WILKES:
Q. Mr. Bradley, you and I brought up earlier a technical question that is leading me to -- or made a statement that's leading me to ask this question because in my mind it creates a bit of a problem and I think probably illustrates the problem that we're all going to have to face as this technology explosion continues.

Printed Page 2594 . . . . . Thursday, February 24, 1994
You said that in looking at regulating rates, possibly repealing laws, you talked about obsolescence and faster amortization and depreciation of equipment which obviously is going to lead to reduced earnings for the utility companies or whomever it is that is amortizing this equipment faster. And the theory behind that is, is as this equipment becomes more obsolete and more capital is required to either replace it or whatever or operate it or whatever needs to be done. That in my mind then leads me to the logical conclusion that rates will have to go up if earnings go down if you're trying to keep a rate of return level?
A. Yes, sir.
Q. And if you're going to hold the little lady that you were talking about harmless as far as her phone bill is concerned and if she had a choice, I guess, she'd keep the coaxial copper in the ground, but she doesn't have that choice, so who will then bear the burden for that rate increase?
A. Representative Wilkes, in 1988, Southern Bell made a statement that they would probably ask -- never ask for another rate increase. Well, in 1980, I -- 88, I certainly did not believe that. Through 1993, they have not. And the reason they have not is that the technology, the equipment that's coming on-line makes it easier for them to make a profit with less employees, et cetera.

Now, Mrs. Hannah Lancaster -- Senator Courtney, I don't know if you know her or not.
SENATOR COURTNEY: I don't know.
A. She owns the Chesnee Telephone. I have talked to Ms. Lancaster and she says that in -- that the new technology does allow them, you know, to make more profit. The fiberoptic cable, even though it's expensive to put in the ground, in the long run, they will be able to make more profit. So the new technology coming on-line has a lot to do with that.

With the incentive regulations that Southern Bell had that was allowed by the Public Service Commission, they were allowed to make a higher percentage of return on the investment with the understanding that that rate of return -- for instance, they were allowed to make 13 percent return on their investments. With incentive regulation, they were allowed to make 15 percent. Well, one half of that two percent, or one percent of that, was plowed back into rates which reduced rates for Southern Bell. And in 1993, when the State Supreme Court struck down the incentive regulations saying that the Public Service Commission didn't have the authority to authorize it, Southern Bell had about 7.6 million dollars to return back to the rate -- to the subscriber. And Southern Bell did go

Printed Page 2595 . . . . . Thursday, February 24, 1994
ahead and return that money to the subscriber, even though I guess technically they didn't have to.

So better technology coming on line allows them to make a better profit. Consequently, a faster amortization on some equipment that would allow them to keep up with the latest innovations.
Q. So you're saying that one would essentially offset the other?
A. Yes, sir.
Q. The increased revenues or reduced expenses in other areas as a result of the better technology --
A. Yes, sir, and Southern Bell --
Q. -- is going to increase --
A. -- has proven that that --
Q. -- revenues?
A. Yes, sir.
Q. And the faster amortization is going to offset that so that --
A. Yes.
Q. -- things pretty much remain the same?
A. Yes, sir.
Q. That's -- you know, that's interesting and I certainly hope that in their formula. They're able to determine that because the IRS and the Department of Revenue and the -- those of us in the accounting profession are grappling with that issue right now as to how for accounting and tax purposes are we going to treat these things. It is an interesting question. I think you've answered it well?
A. Thank you. That is a real concern because the small private telephone companies like Ms. Lancaster with Chesnee Telephone, it's a real concern with them. It really is and the state is going to have to look at it. The PSC is going to have to look at it.

And whatever the PSC does, of course, has to fit into the rates in conformance with the Tax Commission and in your job in -- over in the State House.
Q. And changing gears on you for a second, if you -- you were a member of the Election Commission until --
A. January the 10th, I think is the date on my letter.
Q. Are they not in an -- aren't they dealing -- grappling with some pretty tough problems over there right now?
A. Representative Wilkes, I think the problems have been resolved. It had to do with the past director of the Election Commission being away from his office too much and he, of course, resigned. The State was reimbursed some phone -- pretty good bit of money, phone records and stuff like this.

Printed Page 2596 . . . . . Thursday, February 24, 1994
And we have employed a new executive director who is Jim Hendrix who was promoted up. Jim had been with the Election Commission for 19 years and has an exceptionally good record. I think those problems have been resolved.
Q. Is there not still an ongoing audit over there, though?
A. No, sir, the audit is finished.
Q. The State Auditor's Office is finished?
A. Yes, sir. Mr. Vaughn finished that audit in -- I don't know the exact date, but the audit is finished.
Q. Has the report been issued?
A. Yes, sir, it was issued. We asked the solicitor in Richland County, Mr. Harpootlian, to look at everything that had gone on that we were aware of and Mr. Harpootlian told us that he found no records of any criminal wrongdoing and would not proceed any further. But Mr. Harpootlian does have a copy of that audit.

The audit was done in two stages. The first stage was the initial information we had that he had been absent from January the 1st of this year through June the 30th. After we got the audit for that period of time, the Election Commission felt like that it would not be good business without going back and looking from the first day he came on the job to the last day he was on the job. And that's why the audit was done in two parts.
Q. So he reimbursed the State for the phone calls, but not for the salary from the time he was away from his job?
A. That is correct because Mr. Harpooltian and the Attorney General's office advised us that there is no statute or any state law that would require him to do that. I personally feel like that he has a moral obligation to do that, but there is no way that the State can force him to do it.
Q. I thank you again for the answers.
A. Thank you, sir.
THE CHAIRMAN: Any other questions? You're excused, Mr. Bradley. Thank you so much.
A. Thank you, Senator, and the committee.

PERSONAL DATA QUESTIONNAIRE SUMMARY

1. Mr. Philip Tibbs Bradley
Home Address: Business Address:

6 Cross Court 902 N. Pleasantburg Dr.
Greenville, S.C. 29607 Greenville, S.C. 29607

Printed Page 2597 . . . . . Thursday, February 24, 1994
2. He was born in Albemarle, N.C. on September 15, 1938.
Social Security Number: ***-**-****.

3. S.C. Driver's License Number: ********.
S.C. Voter Registration Number: 1 430 164.

4. He was the moving party in a divorce on June 5, 1981. He has one child: Andrea Leigh Bradley, age 21, senior at the University of South Carolina at Spartanburg.

5. Military Service: S.C. National Guard and US Army Reserves from 1960 to 1966, Rank Sp.5, honorably discharged.

6. He attended Gardner-Webb College in 1956 and 1965; transferred to Clemson in 1959; graduated from the University of Florida Forest Ranger School after the 1961-62 school year; graduated from Furman University with a B.A. degree in 1969.

7. He served in the S.C. House of Representatives from 1979 to 1988.

9. He worked in real estate and marketing for Cothran, Sims, and Barker from 1969 to 1973; owned and managed Philip T. Bradley, Inc. from 1973 to 1983; was the vice president of marketing at Austin Moving and Storage from 1983 to 1985; and has owned and managed Philip T. Bradley, Realtors Inc. from 1985 until the present.

10. He has served on the Security Federal Savings and Loan, Advisory Board of Directors.

11. He was indicted for the misdemeanor charge of obstruction of justice on October 20, 1986. Charges were dismissed.

13. He had a federal and state tax lien instituted against him in 1989 and 1990; both were subsequently paid and released.

22. In seeking this office he has spent these amounts:
$102.24 for letters to members of the General Assembly.

26. Professional organizations: Past Vice-President, Secretary, and Board of Directors, Greenville Association of Realtors (until 1979);

Printed Page 2598 . . . . . Thursday, February 24, 1994
Multiple Listing Service of Greenville, past President, Vice President, and Board of Directors (until 1979); South Carolina Association of Realtors, past Board of Directors (1978-1979); Greenville Association of Realtors, Graduate Realtors Institute in 1973, member Greenville Assn. of Realtors since 1969.

27. Civic, charitable, etc. organizations: First Baptist Church; Baptist Courier, Board of directors; YMCA.

29. Five letters of reference:
(a) Mr. R. Denis Hennett

President, Greer State Bank
P.O. Box 1029
Greer, S.C. 29652-1029
(803) 877-2000
(b) Ms. Patt A. Smith
President, Patt Smith Realty
49 Greenland Drive
Greenville, S.C. 29615
(803) 233-6030
(c) Dr. John E. Roberts
Editor, The Baptist Courier
P.O. Drawer 2168
Greenville, S.C. 29602
(803) 232-8736
(d) Mrs. Gail Crawford
President, Crawford Properties, Inc.
3304 White Horse Road
Greenville, S.C. 29611
(803) 295-1803
(e) Mr. Roger B. Clinkscales
C.P.A., Bradshaw, Gordon & Clinkscales, P.A.
630 E. Washington Street
P.O. Box 16389
Greenville, S.C. 29606-7389
(803) 233-0590

30. Fourth District

MR. COUICK: The next candidate is Mr. Robert Rowell.

Printed Page 2599 . . . . . Thursday, February 24, 1994
SENATOR COURTNEY: Mr. Chairman, at this time, I'd ask leave of the remainder of the day. In case anyone is jealous, I have a dental appointment.
MR. COUICK: Come around and take the seat on the far right. Mr. Chairman, I note from Mr. Rowell's driver's license that he resides at 162 Henson Street Spartanburg, South Carolina, 29402. His voter registration indicates the same address. Mr. Rowell, is that your correct address.
MR. ROWELL: Yes.
MR. COUICK: Current address.
MR. ROWELL: Yes, it is.
MR. COUICK: If you would please, raise your hand.
ROBERT G. ROWELL, having been duly sworn, testified as follows:
MR. ROWELL - EXAMINATION BY MR. COUICK:
Q. Mr. Rowell, you were recently screened by this same or a forerunner of this committee, I believe, about a year and a half ago?
A. A year.
Q. A year ago. At that time you went through the same type of questioning that the committee has implemented across the commission in this process, so I'm sorry if some of these questions replicate what you went through the last time?
A. That's fine.
Q. Have you enjoyed your service on the commission for the last year?
A. Yes, I've been on it for nine months and find it a very interesting challenge. I am enjoying it.
Q. What is the most challenging part of the --
A. I think learning the technical aspect. It's changed so quickly, particularly in telecommunications as I understand the different component parts that make up the total industry, trying to learn some of the things that's happening and get ahead of the learning curve, so that you understand what's going on.
Q. Do you own any utility stock, Mr. Rowell?
A. I do through my IRA account, but none of them that are even closely associated with South Carolina. I have stock like Boston Edison and San Diego gas -- San Diego Gas and Electric and Indiana Gas, but none that are even closely associated with anything we regulate.
Q. Do any of those utilities supply power on a wholesale basis to --
A. I'm sorry?
Q. Do any of those companies you own stock in supply power --
A. No.
Q. -- on a wholesale basis for South Carolina?
A. No.

| Printed Page 2580, Feb. 24 | Printed Page 2600, Feb. 24 |
Page Finder Index