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The Puc : New Majority Faces A Battle Over Turf

February 15, 1987|BRUCE KEPPEL | Times Staff Writer

SAN FRANCISCO — There's some irony for Janice Kerr, a self-described "child of the '60s," in finding herself a champion of states' rights--the same banner under which segregationists fought the civil rights movement during that tumultuous decade. And yet, as general counsel of the California Public Utilities Commission, Kerr, with her attorneys, jousts daily with federal agencies over what the PUC views as attempts to take over state regulatory turf.

In this case, the states' rights issue arises from a growing dispute between California and federal regulatory agencies over the supervision of such broad and volatile areas as telecommunications and energy. Federal and state officials have clashed over the handling of the fallout from the U.S.-imposed breakup of the Bell System, deregulation of natural gas, federal decisions affecting distribution of electricity--and even what can and cannot be mailed with utility bills.

The question of regulatory turf assumes special significance for Californians this year now that, for the first time, appointees named by Republican Gov. George Deukmejian--including the new PUC president, Stanley W. Hulett--account for three votes on the five-seat commission. Deukmejian is expected any day to fill the vacant fifth seat, which leaves Donald Vial, the previous president, as the only holdover from the administration of Democrat Edmund G. Brown Jr.

An early test of the new majority is expected this spring: The commission must decide whether to reconsider its decision of last October that Southern California Edison shareholders must absorb $344.6 million of what the PUC deemed excessive costs in building the San Onofre Nuclear Generating Station in northern San Diego County. The only two Deukmejian appointees on the commission at the time, Hulett and Frederick R. Duda, were outvoted, 3-2 by Brown appointees.

In any case, utilities and their customers have been increasingly caught in the middle in the federal-state jurisdictional dispute. For example:

- Three years ago on New Year's Day, customers of Pacific Telephone & Telegraph awoke to find themselves served instead by Pacific Bell. This resulted from the historic settlement of a federal antitrust lawsuit against Pacific Telephone's parent, American Telephone & Telegraph, which was forced to spin off its local phone operations.

- Last New Year's Day, as the result of a Federal Communications Commission decision, Californians were suddenly made responsible for maintaining phone wiring inside their homes, until then repaired without an extra charge by the phone company. State regulators were not consulted.

- Earlier this month, the Justice Department recommended that the former Bell operating companies be freed of federal court restraints--imposed as part of the antitrust settlement--over the kinds of businesses they can enter. The announcement contained no hint that the states or Congress, which sets the nation's telecommunications policy, might have an interest in the outcome.

Because of the effect on consumers from such federal initiatives, general counsel Kerr keeps seven of the PUC's 44 attorneys working full time on federal issues. "We're trying to preserve for California the decisions California can make for itself," she said.

Whether the newly constituted PUC has the will to safeguard consumers' interests in the face of all of the economic change is an unsettling question for consumer advocates such as Sylvia Siegel, executive director of Toward Utility Rate Normalization, or TURN.

"The big industrial users are all over the place, just licking their chops," she said, referring to industry representatives at the PUC's new headquarters in the curving Edmund G. (Pat) Brown State Building at 505 Van Ness Ave. here in San Francisco.

In recent interviews, commissioners Vial, Hulett, Duda and G. Mitchell Wilk played down the role of partisan politics. "The issues are nonpartisan," Vial said.

Hulett added that the sheer weight of what he estimates as $40 billion in annual rate decisions tends to blow away partisan or parochial considerations. And Wilk, a former Deukmejian aide who became the governor's crucial third commissioner when he joined the PUC last December, said the governor's marching orders to him were: "Go in there with a notion of balance."

A Lengthy Tradition

That's a directive that Howard P. Allen, chairman of Southern California Edison, thinks has a lengthy tradition. "Governors of all philosophic bents, whether liberal or conservative or business-oriented or anti-business in terms of generalities, have been very careful in appointing public utilities commissioners. They have been, in general, the mainstream," he said.

"You're not going to see a significant difference," Allen predicted. "You're not talking about political issues, but economic and energy-related issues that are not decided on philosophy, but on facts and projections."

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