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

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| Printed Page 2650, Feb. 24 | Printed Page 2670, Feb. 24 |
Printed Page 2660 . . . . . Thursday, February 24, 1994
Q. You were asked if you were a team player so to speak with the other members and you stated that you did not feel it was good to be a team player, it was more or less to be independent and I think that's what you were saying. I agree with that.

I don't want you to name any names, but how do you feel the commission operates as far as everyone getting along with one another and that kind of thing? Are there any renegades out there on the commission or -- without naming any names? I mean do you feel like you're able to communicate with one another and come to intelligent decisions or do you think you're having to get political with one another more or less to make coalitions and that sort of thing to reach decisions?
A. Well, first of all, I don't see that there are any renegades, but we do aggressively disagree with each other from time to time which I think is healthy. If we, you know, didn't, then, I don't think we'd be getting the exchange of ideas that we need at times.
Q. Do you see that a certain section of the commission sticks together, so to speak, a coalition type thing and kind of votes as a block most of the time --
A. No.
Q. -- or is it -- everybody, you know, independent --
A. I don't really see that. I couldn't categorize it that way. I'm happy. I think the commission does a good job and even though we do -- I think it's healthy to have a difference of opinion on certain different issues. But for the most part, we agree on probably 90 percent of things.
Q. Are there situations where you can pretty much predict how one person or another is going to vote on a particular rate request? I mean, do any of them lean so heavily one way or the other that you can pretty much predict them that way?
A. I don't know that I could categorize it like that. You know, even when I think I've been surprised and I don't know whether I could do that.
Q. Thank you, Mr. Arthur. Mr. Chairman.
THE CHAIRMAN: Senator Jackson.
EXAMINATION BY SENATOR JACKSON:
Q. Mr. Arthur, are you the second youngest member of the commission by seniority not by age, then Mr. Rowell, he is probably the most --
A. Right.
Q. -- recent member?
A. Right.
Q. What's your opinion on term limits for commissioners, in particular Public Service Commissioners?

Printed Page 2661 . . . . . Thursday, February 24, 1994
A. Well, I'm -- you know, that's a policy decision that the General Assembly would have to make. I think that probably, you know, whatever ya'll decide is fine with me.

I think that the industry is so complex that I'm -- it took me a couple of years really to get up to speed to where I felt comfortable with all the acronyms and all the things that were going on and, you know, I -- you know, our commission is probably better off because we have some longevity. But then there is the negative involved, too, of, you know, not having turning over. People get comfortable in situations.
Q. How does the South Carolina Commission rate with others across the nation as far as longevity and the number of years of service for a commissioner?
A. Well, we have probably as a commission may be more longevity than any other commission.
Q. In the country?
A. Possibly. I don't know that, but we've got the number 2 person in the country.
Q. Thank you.
THE CHAIRMAN: Any other questions?
EXAMINATION BY MR. BILTON:
Q. Senator. Mr. Arthur, I think you recently said that you were president of the Southeastern Association. How often do you meet and where do you have to go to meet these meetings?
A. Well, primarily the Southeastern association meets in conjunction with the national association. We have a meeting during the time when we're attending the national association meeting.

We also have what we call a commissioners round table meeting in March or April in Atlanta to get together and discuss issues in our various states. And then we have an annual meeting, usually the second week in June which we're hosting this year in Charleston.
Q. So you -- basically, you're talking about a couple of times a year?
A. Three or four times a year.
Q. Thank you.
THE CHAIRMAN: Mr. Arthur, let me ask you one question. We've been talking about wheeling and I think it's about the first question I've asked anybody, but how far in advance can a power -- I mean a large customer buy electricity? Can you buy a bulk for, say, '95 or '96 or is it one year to year?
A. Well, that's the basic problem with wheeling as it -- there is no guarantee. I mean if the person goes bankrupt, then he's not going to be able to provide you any electricity. And that's -- or it could be a severe

Printed Page 2662 . . . . . Thursday, February 24, 1994
shortage of electricity in a particular area of the country which would drain his ability to provide electricity to anybody.

I mean it's -- and the problem that we have to deal with is these backup protective measures that we have to make sure that are in place to protect the customers South Carolina.

But they can enter into a contract subject to our approval that went out into the future, but unless we have safeguards, and this is the biggest -- most important thing, safeguards to protect an eventuality of all the different things that could possibly happen.
THE CHAIRMAN: Well, wheeling would go to someone like Dupont who could buy a bulk of power?
A. Right.
THE CHAIRMAN: From a producer and so there is no broker in between, is it? It's always --
A. Right.
THE CHAIRMAN: It's always purchased from the producer like SCE&G or Carolina Power and Light?
A. And typically that would be the way and I don't --
THE CHAIRMAN: No middle man in it, is there?
A. I don't know of any prohibition against the middle man. That can -- I don't know of any prohibition. Now that could happen, but we would have to approve that contract.
THE CHAIRMAN: Have you approved any contracts like that since you've been on the commission?
A. No, sir. Not to my knowledge.
THE CHAIRMAN: Do you think it's something they talk about and don't do?
A. Well, in the future -- well, of course, it's not legal now. Dupont couldn't do it. We thought they might last year might approve wholesale -- retail wheeling because that'd be a retail transaction going to the end user which would be Dupont. A wholesale is from a producer to another reseller like SCE&G to the City of Camden.
THE CHAIRMAN: That wouldn't be retail wheeling, would it?
A. To Camden?
THE CHAIRMAN: Yes.
A. I said that would be wholesale. That's what's legal.
THE CHAIRMAN: Well, wheeling -- if that's be the truth, then wheeling is only done between power companies?
A. Well, for the most part at this time because the retail wheeling did not make it into the law.

Printed Page 2663 . . . . . Thursday, February 24, 1994
RE-EXAMINATION BY MR. COUICK:
Q. Let's say, our area which had suffered from a blackout/brownout situation had entered into a wheeling contract with SCE&G for the month of January, 1994, let's say, six months ago, which would have been covered under the act. That would have been a wholesale sale. Is your point in that even though it was contracted for, because of that situation demand in Virginia, SCE&G would not have had access to that energy during our period of cold here as well?
A. Right. And that's commonly done and that's one reason that we're going to have to examine all the -- I've already asked the staff to begin developing information about all the reserve capacities for our companies because I understand several of them had problems during this last cold spell. And we need to constantly evaluate that because they have standing contracts with -- for backup supplies.

In order to maintain the necessary reserve capacity to protect when they have these peak periods and if -- you know, there needs to be protection in -- you know, for situations like. If one of their backup contracts or backup suppliers has a potential, you know, to -- we -- that can happen.
THE CHAIRMAN: Let's say that Carolina Power and Light had contracted to have a contract with someone to come up -- some utility up in Pennsylvania and the need became such because of the recent cold weather that they needed that power to fulfill their local obligations, could they then refuse to honor the contract to the utility in Pennsylvania?
A. Well, that would be a part of the consideration in our approving of that contract by CP&L.
THE CHAIRMAN: If you did approve it, you would want it whether they -- home base comes first?
A. Well, hopefully -- yeah, hopefully before we approved it, that that eventuality, that potential problem would have been considered by the commission and we would have a plan if that did happen to protect our -- our goal and our main purpose, as I see it is to protect the local people in South Carolina.

Our -- and part of that is to make sure that these companies are financially healthy, but contracts like that are entered into for a profit. And that's fine, but that for-profit motive can't interfere with their ability to deliver to their primary responsibility to the people in South Carolina.
THE CHAIRMAN: That's all I have. Any other members? You may be excused.
A. Thank you, sir.

Printed Page 2664 . . . . . Thursday, February 24, 1994
PERSONAL DATA QUESTIONNAIRE SUMMARY

1. Warren D. Arthur, IV

Home Address: Business Address:

516 Woodland Drive 111 Doctor's Circle

Hartsville, SC 29550 Columbia, SC 29203

2. He was born in Hartsville, South Carolina on July 7, 1948.

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

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

S.C. Voter Registration Number: 1 271 924.

4. He was divorced from Jamie F. Arthur in 1989. Jamie F. Arthur was the moving party in the Family Court of the Fourth Circuit. He has five children: Daphne Dupree, age 24; Allison Forrester, age 21; Jacqueline Dupree, age 16; Catherine Faser, age 14; and Warren Dupree, age 12.

5. Military Service: S.C. Army National Guard, Rank E2, Honorably Discharged in 1970.

6. He attended Blue Ridge School (Hendersonville, NC) from 1962 to 1964, when he returned to Hartsville, SC. He attended Hartsville High School from 1964 to 1966, when he graduated. He attended Wingate Junior College (Wingate, NC) from 1966 to 1968 and received an Associate of Science degree. He attended Campbell College (Buies Creek, NC) from 1968 to 1970 and received Bachelor of Science in Business. His non-degree seeking graduate work has included: Columbia Bible College and Seminary, 1988; University of South Carolina, 1988 to 1989; and Liberty University (Lynchburg, VA), 1989 to 1990.

7. He served on the Hartsville City Council from 1973 to 1976 and in the S.C. House of Representatives from 1976 to 1986.

8. He lost his 1986 re-election bid for the S.C. House of Representatives.

Printed Page 2665 . . . . . Thursday, February 24, 1994
9. He worked as an oil jobber from 1970 to 1981; was an insurance agent from 1982 to 1985; had an interest in a restaurant business; and had a company that produced and distributed hair care products.

11. In 1985, he was charged with DUI, but was found innocent in court. In 1992, he was charged with speeding over 10 MPH and paid a fine of $150 to the City of Darlington.

14. He has been included in several suits by creditors of W.D. Arthur Oil and Pee Dee Food Systems, Inc. All have been settled.

19. He was employed from June 1987 to September 1990 with the Governor's Office of Criminal Justice Programs and had responsibility for the DARE program. Burke Fitzpatrick was his supervisor.

22. In seeking the office of Public Service Commissioner, he has spent $25.00 on the typing of letters, $58.00 on stamps, and $163.00 on printing.

26. Professional Organizations: President, Southeastern Association of Regulatory Utility Commissioners (1993-1994); Member, National Association of Regulatory Utility Commissioners (1991-present); Electricity Committee and Nuclear Waste Subcommittee; Past President, National Conference of Insurance Legislators; Member, Leadership South Carolina Alumni Association; Member, Alumni Association of National Judicial College.

27. Civic, charitable, etc. organizations:President, Alcoholics for Christ, Inc. of South Carolina; Former Chaplain of the Gideons (Hartsville Camp); Care Group Leader, Sunday School Teacher, and member of Lakeview Baptist Church; Former member of American Red Cross 56 Day Club; Vice Chairman, SC Baptists for Life (1990-1991); Member, Board of Directors of Providence Home for Homeless Men (1992-present); Member, General Board of the South Carolina Baptist Convention (1993-present).

28. During his 1991 screening, it was brought out that there were several judgments against W.D. Arthur Oil Co., Inc., of which he was the sole owner. All known judgments have been settled.

Printed Page 2666 . . . . . Thursday, February 24, 1994
29. Five letters of reference:

(a) Mr. Rick L. Beasley

President, Carolina Bank and Trust

P.O. Box 59

Darlington, SC 29532

(803) 393-5472

(b) Dr. Donald C. Purvis

Pastor, Lakeview Baptist Church

202 Lakeview Boulevard

Hartsville, SC 29550

(803) 332-8427

(c) Dr. Clyde Smith

706 Glen Acres Drive

Hartsville, SC 29550

(803) 332-4081

(d) Mr. John G. "Jack" Wellman

28 Creek Side Drive

Murrells Inlet, SC 29576

(803) 236-5500

(e) Mr. Wilbur Brown

P.O. Box 1137

Lake City, SC 29560

(803) 394-5553

30. He is seeking the position of Public Service Commissioner for the Sixth District.

MR. COUICK: Good morning, Mr. Blackburn, if you would raise your right hand, please.
MCKINLEY LEE BLACKBURN, having been duly sworn, testified and deposed as follows:
MR. BLACKBURN - EXAMINATION BY MR. COUICK:
Q. Mr. Blackburn, I'm looking at your driver's license now. It indicates that you live at 1919 East Sandhurst Drive, Florence, South Carolina, 29501; is that correct?
A. 505.
Q. 505. All right. Do you currently live there?
A. Yes, sir.
Q. And that is in Florence County; is that correct?
A. True.

Printed Page 2667 . . . . . Thursday, February 24, 1994
Q. Mr. Blackburn, you have served on the Public Service Commission before?
A. For six months, yes.
Q. And I believe that was when Ms. Masse had died; is that correct?
A. Yes, sir.
Q. And Governor Campbell then appointed you to serve out until there was an election later and you did not actually run for that election; is that correct?
A. No, sir.
Q. What makes you want to run now for that seat? What has changed in your mind about service on the Public Service Commission from several years ago?
A. Well, I feel like that it's something that -- I believe -- let me start first, but there is some --
Q. Yes, sir. And the court reporter, she's getting all this down on her transcript.
A. All right, sir. First of all, I've been active in community affairs since in -- well, I guess in high school and I found out that this might be something that I could help do something for my fellow man and it's something I enjoyed. It's very interesting. It's something that touches the lives of every resident of South Carolina.
Q. Well, what has changed, though, from three or four years ago when you decided not to run for further service after you had been appointed until 1994 when now you want to be on the commission? What's changed with your time commitments or your interest or whatever? Why run now? Why didn't you run for reelection several years ago?
A. Well, first of all, when you serve on the internship, you cannot run for the following election. You cannot be a candidate.
Q. That was the rules established by the governor's office?
A. Yes, sir. And that was the first time. And, secondly, what's happened since then, I think with the new technology, the changes in Congress of the laws, the FCC, the Department of Justice, the PSC is going to be in for many challenges because they've paved the road for this new Super Information Highway.
Q. Yes, sir. And what's going to be the role of the PSC in defining the width and length of that highway?
A. Basically, they started. It will have to be -- first, if we're talking about the Information Highway, the Department of Justice is going to have to change the MFJ decree. This will be handled then through the Congress and the FCC and then the State Legislature will vote on what we -- would mandate what we would work with.
Printed Page 2668 . . . . . Thursday, February 24, 1994
Q. Would you have any tools out there at your disposal right now? Would there be anything that you would be allowed to decide now without any further changes in the law that would have some impact? Let's say, for example, telephone companies and fiberoptic, how about that?
A. This is making preparation for all of the Information Highway. It's high speed, it's reliable and it will provide if and when any laws are changed.
Q. Who should pay for the Information Superhighway?
A. The way it's been working in the past -- I guess I'm digressing -- is that utilities receive a return on their investment.
Q. But should every utility customer pay for that superhighway. Let's assume what Southern Bell is the one putting in the highway in Lincolnville, South Carolina or a major component of it, should your next door neighbor there in Florence who, say, is 75 years old, all she uses her telephone is to call down and make her reservations at the PA for Friday night, should she have to pay for that fiberoptic put down in front of her house?
A. That's a good question. The -- in other words, progress is developed by capitalizing different investments and for those facilities to be available and affordable, they will have to keep up with progress. Eventually, I don't see how there could have a permanent -- it's sort of like the school tax.
Q. Yes, sir, but when they got ready to build a railroad across the United States back in the 1800's, how did they recoup their investment?
A. Well, it's investment -- down at the telephone company, it would on the same thing, it would sell stock.
Q. Right. But how did the investors in the railroads make their money back? By selling tickets for folks that got on?
A. Right.
Q. Why can't you sell tickets for folks who want to get on the Superhighway?
A. Basically, you would be -- the cost of service would be higher.
Q. But if that next door neighbor of yours didn't want to get on the highway, why should she have to pay?
A. That's different grades of services, I would think.
Q. But if that's -- that fiberoptic is used to be taking her phone call down to the PA's restaurant, I mean she's using it, but she wouldn't need that level of highway. It's kind of you don't get on the interstate to go from Florence to Darlington? I mean you can take the back road?
A. Right.
Q. I mean, does she have to opt necessarily to take that fiberoptic?
Printed Page 2669 . . . . . Thursday, February 24, 1994
A. Yes, sir. But in the long run, the fiberoptic would save her money because of the cost of the maintenance, the repavement. It would be in -- over the long run, just like the nuclear power company. It's grasshopper. It costs a lot initially, but then it levels out.

And I think that that would be graded, like they do SIMON. You may have read about S-I-M-O-N, that hand-held telephone --
Q. Right.
A. -- which will be a pager, a wireless fax machine. Experimenting with that in Florida now and it will do several others things. It's a calendar. Well, that initial cost will be $1,000. That should help pay for that facility.

I think the Superhighway would work the same way. That initial cost of the computer, their equipment, would cost more. The lines -- the basic service is up to the PSC, I would imagine to establish a rate that would be affordable by all of the users.
Q. So it would be your position as a commissioner if you were elected as to that things that are included in the rate base, the lines and that sort of thing, you would keep them as low as possible for the average consumer?
A. Yes.
Q. And you would be a use base cost or fee in terms --
A. That's one option. Yes, sir.
Q. -- in terms of other folks?
A. Right.
Q. What other big issues do you think are coming up, Mr. Blackburn, other than the Information Superhighway?
A. On the PSC? Well, I think -- I believe there's -- they will pass a bill the first quarter. It's the Cable Act of 1992 that will change the repeal the law that telephone companies can provide pictures and visa versa that the cablevision can provide telephones.
Q. And that would bring up the situation where a regulated utility, a phone company, would have some operations that would be unregulated?
A. Right.
Q. It would have profits from an unregulated part of its corporation and I think that exists in South Carolina right now with SCANA and its land development operation versus SCE&G? What is your role as a commissioner to ensure that folks -- the average consumer doesn't pay for the cost of SCANA such that they make more profit on the unregulated part and charge the cost back to the regulated portion? What can you do as a commissioner to ensure that?

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