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The Public Service Commission's standing as a regulatory agency was greatly enhanced by a comprehensive legislative reform plan approved this year. A follow-up review of the changes to the agency, based on a highly critical audit in 2003, shows that virtually every shortcoming was met by the Legislature.
Problems cited by the Legislative Audit Council in a performance audit of the agency included improper communications between commissioners and utility representatives, insufficient standards of education and experience for commissioners and occasional legislative appointments based on nepotism.
Improper communications with regulated utilities bolstered the frequent criticism that the PSC was captive to the industries it was created to regulate. The law regarding those communications was strengthened, and ethics rules governing the judiciary were extended to cover PSC commissioners and staff.
Standards for new PSC candidates were heightened and their terms were staggered, as recommended by the audit council, to provide continuity on the commission, which frequently deals with highly technical matters. Immediate family members of legislators are now prohibited from serving on the commission, which is elected by the General Assembly.
The Legislature also created an Office of Regulatory Staff, separate from the PSC, so that consumer interests can be better represented in utility rate cases. As the Legislature enacted reforms recommended by the LAC, it also appointed a new commission. The appointments had been delayed for months while legislators debated reform proposals.
The fact that the reform was based on the findings of the performance audit provides another example of the Legislative Audit Council's long-established value in suggesting efficiencies in state government to benefit taxpayers and consumers. The LAC previously played a major role in the reform of the automobile insurance industry in South Carolina, with recommendations for a free-market system that has generally benefited policy-holders.
The follow-up findings on the Public Service Commission audit underscore one of the most important successes of the legislative session. The PSC makes decisions that affect the wallet of virtually every South Carolina resident. The reform of this highly important agency should ensure that consumers get a fair shake from regulated utilities that operate in the state.
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