Public Service Commission Summary

The Public Service Commission (PSC) is responsible for issuing certificates of public convenience and necessity for the construction of any water and sewer projects that are not ordinary extensions in the usual course of business. All applicants must provide detailed information regarding the proposed project for the PSC's evaluation. The projects are reviewed by the PSC to assure the utility is providing the most effective system without placing an unreasonable burden on its customers, i.e. ≥necessary and convenient.≤ The applicant (utility) is charged with the responsibility of proving to the PSC the project is necessary and convenient. The PSC has a 270 day statutory limit from the file date to issue an order for certificates of public convenience and necessity cases. When the 270 day period has expired, the PSC must issue a default certificate. Therefore, it is imperative that the utility timely submit sufficient, accurate information to the PSC; and the PSC timely review and issue an order based on the information. Utilities cannot begin construction of projects which require approval without the certificate. Any delays can create extended environmental and health hazards for the prospective service areas. Further, economic development can also be delayed if infrastructure needs are unmet. This review identified three issues within the certificate process where improvement is needed. Each of these issues is linked to the timeliness of the disposition of these cases.

ISSUE AREA 1:The PSC begins the 270 day statutory time standard when the water and sewer case information has been reviewed rather than when its received.

West Virginia Code 24-2-11 (see Appendix A) states that an order must be issued by the PSC within 270 days of filing. For a municipality or private utility, filing occurs when the applicant submits an application. For a public service district, it is 1) 30 days from public notification of prefiling, or 2) the date all required supporting information has been received, whichever occurs last.

In this evaluation of sampled cases, 18 of 36 cases with file dates were found to have been assigned an incorrect file date. One case was a municipality and the other seventeen were public service districts. The file dates are set by the date the Commission declares it ready for filing, rather than when the information was received. The longest time frame for a case identified in this study was one declared to be filed 86 days after the actual file date. The effects of discrepant file dates can be significant. Two cases were found to be in excess of the 270 day default certificate statutory period based on the file date as determined by the Office of the Legislative Auditor. If these cases had been dismissed after the 270th day (instead of issued certificates) the utility may have had cause for litigation since the statute requires the PSC to issue a default certificate. In addition, because milestone dates for the disposition of individual cases are often based upon what is understood to be the 270th day based on the erroneous file date, the disposition of some cases is delayed because the understood 270th day postdates the actual 270th day. Another effect is the loss of governmental accountability. By claiming discretion to determine file dates anytime after an application has been submitted, the PSC is removing what should be an objective process. The current practice of establishing file dates has a disparate effect upon public service district applicants, which accounted for 17 of the 18 (94%) cases found to have file date discrepancies. The Public Service Commission should recognize the actual file date as the official file date on its Notice of Filings.

ISSUE AREA 2:Sampled cases show the prefile period consistently extended past the statutory period for water and sewer certificate of convenience and necessity cases.

West Virginia Code 16-13a-25 (see Appendix B) requires public service districts to prefile 30 days prior to filing an application for a certificate. As a part of the prefile requirement, the Code requires public service districts to publish a Class II legal advertisement during the prefiling stage, though the advertisement is duplicitous of another required once filing status is achieved. The prefile period was established to provide the public early notice of forthcoming projects and allow the PSC greater control to ensure complete filing with the ultimate goal of expediting the process.

In 100% of the relevant sampled cases, the prefiling period required by 16-13a-25 exceeded the statutory time period. Prefile periods for sampled cases ranged from 36 to 495 days and averaged 152 days in length.{1} Compared with sampled certificate cases for Class III and IV municipalities which represent comparably-sized utilities which are not required to prefile, public service district cases required just as much processing time from file date to final decision, despite prefile periods averaging 152 days. On the basis of total processing time, public service district cases averaged 307 days and required twice as much time for certificate decisions as Class III and IV municipalities, which required 153 and 169 days respectively. In September 1997, the PSC adopted a new policy for managing the prefile period. Because of the newness of the policy, there are too few cases to gauge the policy's impact. The Legislature should consider repealing the redundant prefile advertisement and requiring the updating of this review in the 1999 Interim to determine whether the prefile requirement should be continued or repealed.

ISSUE AREA 3:Codification of certificate of convenience and necessity rules, case law and policies is insufficient to disclose the certification process, rules and precedents.

The PSC has not published Commission case orders since 1986. Internal policies dictating procedures for each division within the Commission are piecemeal, noncomprehensive and as a whole, unofficial. The PSC does not have pertinent information codified as administrative rules with respect to certificate of convenience and necessity cases. In filing a certificate of convenience and necessity, the applicant is at the mercy of the system. If the applicant is unable to obtain information that is relevant to the task at hand, its ability to provide a complete application, or litigate its case, can be impaired. The PSC does not have its internal procedures formally documented. The lack of formal procedures leaves many functions performed by the PSC open for interpretation by individual staff members. This can create confusion and delays. The PSC should publish its orders on the Internet to improve public access, and promulgate rules on the certificate process and procedures and internal procedures for evaluating applications.

FOOTNOTES********************************

{1} The standard changed from 60 days to 30 days in June 1996. The sample was drawn from all water and sewer certificate cases initiated in calendar year 1996.