Rate cases raise ethics questions at NC Utilities Commission

WNCN Investigates

Rate cases raise ethics questions at NC Utilities Commission

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RALEIGH, N.C. -

If Aqua North Carolina gets what it wants, nearly 100,000 water customers, many of them based in the Triangle, will have to shell out a whole lot more money.

The company is asking for a 19 percent rate hike that could cost the average family more than $200 a year.

Aqua NC provides water and waste water service to many who live in subdivisions not covered by city water service.

"We're asking for recovery of investments already made that are already benefiting the customer," said Tom Roberts, the president of Aqua NC.

The company went before the N.C. Utilities Commission at a public hearing Thursday night to hear customers concerns. 

One of those concerns voiced by homeowners and watchdog groups -- whether there are conflicts of interest--involving those who decide to grant -- or deny rate hikes.

WNCN Investigates uncovered that many of the people making the decisions have previous ties to the companies they are often regulating.

The Utilities Commission regulates the rates and services of all public utilities in the state, such as Aqua NC.

Under state law, the commission's Public Staff is tasked with presenting a unified position in the best interest of the rate-payers on all issues before the commission.

The commission has two rate cases before them: Aqua NC and Utilities Inc. The Public Staff's job is to present its findings to the commissioners.

WNCN Investigates found a common history that critics say raises concerns. Here are a few:

  • Commission Chair Ed Finley Jr. is a former attorney for Utilities Inc. He will participate in the Utilities Inc. hearings but will not preside.
  • Public Staff Director Christopher Ayers is also a former attorney for Utilities Inc. He has recused himself from the hearings.
  • Public Staff Attorney William Grantmyre was president of Heater, Inc., a utility company that merged with Aqua North Carolina. He told WNCN, "I don't see a conflict of interest; critics should look at my performance in the last rate case." He claims to have pushed against a previous rate hike.
  • Aqua North Carolina and Utilities Inc. attorney Jo Ann Sanford led the Utilities Commission for 10 years. She told WNCN, "Lawyers become judges then resume the practice of law as an everyday occurrence. Would it be sensible to say a judge forfeits {their} right to return to practice of law? Or that all defense attorneys and prosecutors should be disqualified from becoming judges? Of course not. In a 38 year career as a lawyer, I have served variously as consumer counsel, "judge "/commissioner, and company counsel. I left Commission 7 years ago."

Watchdog groups like Clean Water for NC are skeptical.

Hope Taylor of Clean Water for NC said, "The public staff's role is to be the advocates for the public and get the best deal for the public. We don't think that is happening as a result of these historical relationships with the private water utilities."

There is no evidence of wrong doing, but critics like Taylor say the public should be aware of who has ties to what.

But Sam Watson, general counsel for the Utilities Commission, said, "Each of these folks take their jobs seriously, and will represent the interest that they are being asked to represent fairly."

At Thursday's meeting, Public Staff Director Christopher Ayers also responded to the critics, telling WNCN Investigates, "The utilities world is a small world and and there is a limited group of people that have the expertise. You certainly don't want someone on the Public Staff who has no background in utilities."

He continued, "We are very careful to make sure an appropriate amount of time goes by before they have any involvement with any potential company they would have worked with."

Aqua North Carolina is also pushing on another front. The company wants to increases rates up to 5 percent without holding public hearings. When WNCN Investigates questioned the president about that, he said the hearing process for general rate cases would continue, but that they just want to surcharge outside the public arena.  

"What we are asking for is the ability to surcharge," Roberts said. "It has been suggested by both us and the public staff that is it is not necessary to have that hearing process."

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