Executive Committee Meeting Minutes of June 8, 2000, 11 a.m. to 2:30 p.m. Hearing Room A, Swan Street, Albany Attendees: ALJs Stockholm and Linsider, Michael Corso, J. Kronenwetter (NFG), C. Leonardi (Con Ed), J. Oates (Con Ed), M. Duggan (Amerada Hess), B. Wiles (PULP), R. Gerardi (NYSERDA), R. Addepalli (DPS), D. Lutzy (DPS), W. Reinhartt (NYSERDA), S. Berger (CPB), N. Testani (NIMO), S. Herlands (DPS). 1. Judge Stockholm distributed the bibliography of pertinent Commission statements that he and Judge Linsider had prepared and clarified regarding that bibliography, that while views contrary to past Commission decisions certainly could be expressed, the Judges had been instructed not to revisit decisions already reached by the Commission. This led to a general discussion of the scope of this proceeding in relation to past decisions and other ongoing proceedings; the following clarifications emerged: a. Consideration of the potential utility role as provider of last resort does not imply revisiting the Commission's determination that gas utilities should exit the merchant role. The provider of last resort is a much broader category than the seller of commodity; indeed, POLR is best seen not as an entity but as a bundle of functions, one of which is selling the commodity. The role of gas utilities as commodity sellers has already been decided by the Commission, but the utility's role with regard to the other POLR functions is properly under review in this proceeding. Relatedly, it was clarified that while it may be necessary to analyze legal issues related to POLR, existing legal constraints should not limit the parties' examination. If models deemed substantively sound require amendments to existing statutes, it would be proper to recommend them. In general, it is better to err on the side of a broad examination rather than a narrow one, recognizing, again, that issues already decided by the Commission are not to be revisited. b. The relationship between this proceeding and the Commission's planned inquiry into system benefits charges (SBC2) was clarified as well. Because a proceeding is already planned, our proceeding should not interfere with SBC2. SBC2, however, is likely to be limited with respect to both range and time, and our proceeding may properly examine issues beyond its range and beyond its time. SBC2 relates to the remainder of the period of transition to competition, while our proceeding relates to the continuing need for public benefit programs beyond the transition period, in the fully competitive end-state. We should consider the need for public programs such as (but not necessarily limited to) those currently offered and generally how those needs might best be met. The group recognized as well the need to provide assurance that the process would produce usable results and to incorporate flexibility that will permit dealing, in subsequent utility specific proceedings, with different companies moving toward competition on different schedules. 2. Public Benefits Committee Report In addition to the issues noted above with regard to SBC2, the public benefits committee raised the following points: a. Committee Make-up: It was agreed that the Committee would contact ESCOs and ask for two representatives. b. Outside Speakers: Noting that most of its expertise related to low income programs, the committee asked whether there were funds available to cover the expenses of speakers on commercial and industrial energy efficiency and research and development. This led to a general discussion of outside speakers and their funding. Judge Stockholm suggested that while individual committees should decide whom to invite, the presentations might well be made to the plenary in as much as one purpose of phase 1 is to bring all participants to the same level of understanding. It was agreed that the executive committee would coordinate the timing and location of the presentations. With respect to funding, Judge Stockholm expressed doubt that department funding would be available but undertook to ask about department funding of speakers travel expenses. In addition, Mike Corso would look into the possibility of teleconferencing of speakers. 3. Future Role of Regulated Utilities Committee The committee reported that its meetings were being held in tandem with those of the retail competition development committee in order to facilitate joint attendance. Both committees were looking at end-states and making efforts to narrow down an initial presentation describing 36 possible options. The two committees had considered merging but agreed, for the time being at least, to maintain their separate identities. In doing so, they recognized the special need for coordination regarding the definition of POLR, following which the separate roles of the two committees might become clearer. Meanwhile, the two committees have appointed a joint task force looking into the definition of POLR; in that regard, Judge Stockholm reminded the committee of the importance of seeing POLR not as an entity but as a bundle of functions that need to be assessed with respect to the end-states. It was clarified as well that POLR functions are not constrained by what's being done now and that new functions might be added, with respect to both POLR and the role of the utilities generally. The need to gather information on what has worked elsewhere was also noted and it was emphasized that such information should be obtained from various perspectives. For example, whether all groups took as rosy a view of the development of competitive gas service in Georgia as was taken in a recent public utility fortnightly article on the subject may be open to question. The committee reported as well that it was looking into a milestone schedule and, perhaps, an outline of the report due October 1. A joint effort has also begun with the retail competition development committee to produce a bibliography. Efforts were also being made to identify presenters on various subjects, but no recommendations had yet been forthcoming. The Committee took a very favorable view of the Staff presentation on telephone competition issues. The presentation would be made to the plenary, and the Chairmen were asked to go back to their committees and to solicit specific Telco questions that might be of interest. With regard to membership on the committee, it was clarified that CPB represents small commercial as well as residential customers and farms. There is at present no environmental representative but the committee may approach PACE or NRDC. There was general agreement as to the need to reach out to small business customers, a historically underrepresented group. While on the subject of committee membership, it was noted that Martha Duggan had undertaken to ensure ESCO involvement in the public involvement and input committee. 4. Public Involvement and Input Committee The committee noted that it viewed the other committees as its clients and that it had polled them on the types of information they wished to receive. Department staff are preparing a compilation of research efforts that it hoped to present at the plenary and stressed the need to build public awareness of the proceeding. There was an extended discussion of the funding for quantitative research that might be needed. Judge Stockholm noted the usefulness of combining funding sources to avoid allegations of bias. The group recognized the costliness of statistically valid surveys and suggested that focus groups might be both more useful and cheaper. It was also noted that the "best" approach may depend on the stage of the proceeding and the status of the development of policy options. 5. Retail Competition Development Committee In addition to the matters already presented by the future role of the regulated utilities committee, the retail competition development committee pointed to its minutes, which have been submitted, and noted that because the committee is large, it has been divided into four subgroups. Two of the group leaders have been asked to come to the next meeting with a managable number of end-states that might be studied. It was noted that an action plan, including milestones, is in preparation. 6. Consideration was given to the date and location of the next meeting, but a final decision was deferred to allow the Chairmen to take the tentative suggestion of July 20th back to their committees and to solicit suggestions for a location. A conference call of the executive committee will be set for June 16 (details to follow via e-mail). The date of the next executive committee meeting was similarly not set; one possibility was a meeting immediately following the next plenary.