PUC Chair Explains Commission's Role in Impact Fee

Transcript

(FULL TRANSCRIPT)

Q: The com?mis?sion is now going to be tasked with col?lect?ing an impact fee, reg?u?lat?ing whether local ordi?nances are ìrea?son?able or not,î and due to sep?a?rate leg?is?la?tion, reg?u?lat?ing pipelines. How many staffers will you need to bring on?

A: In the short-run weíre look?ing at prob?a?bly less than 15 hires. When peo?ple talk about these two pol?icy initiativesÖ.people think weíre going to have this 50-person ramp up. Thatís not the case. And the rea?son thatís not the case is due in large part to the fact that a lot of that infra?struc?ture is here, right now at the com?mis?sion. Admin?is?tra?tive law judges, we have a bureau of audits, we have an exist?ing law bureau func?tion. ÖWe will be very strate?gic in how we go about our hir?ing. A lot of the new hires we bring on board will have to have that exper?tise in munic?i?pal plan?ning code, and obvi?ously as we deal with Act 127 require?ments, a strong focus on gas safety engi?neers, and get?ting them out in the field to inspect those Class 2, 3 and 4 pipelines.

Q: So that esti?mate of 15 peo?ple, that includes the inspec?tion side and the reg?u?la?tory side?

A: I will say if you add the inspec?tion side, we have seven inspec?tors in the queue. So we have about 22 new hires right now.

Q: Dur?ing last weekís bud?get hear?ing you said that when it comes to admin?is?ter?ing the new fee, youíre going to ìlet the play come to [you].î What did you mean by that?

A: There was a ques?tion put forth by one of the sen?a?tors about our role in reach?ing out to the munic?i?pal?i?ties and the coun?ties around some of the pro?vi?sions in Act 13. And the way I responded to that was, weíre going to let the play come to us. Mean?ing, weíre not aggres?sively going out to munic?i?pal?i?ties or coun?ties say?ing, ëyou are required by statute to imple?ment an impact fee.í Thatís not the case. Itís totally dri?ven by local option. The first dead?line will come here on April 14 of this year. Weíre under this 60-day approval time?line where coun?ties will have to make a deci?sion whether theyíre in or theyíre out. Then we get into the next time?line of June 13, where if a county says no, those munic?i?pal?i?ties are under that 60-day win?dow to make their deci?sion. So when I say let the play come to us, weíre not dic?tat?ing those terms. Itís pre?scribed in the leg?is?la?tion for, I think, good rea?son. Ö.From an advi?sory per?spec?tive, if theyíre hav?ing ques?tions about how to adopt the model ordi?nance, I believe our law bureau will help from an advi?sory per?spec?tive. But weíre not going to be aggres?sively out there advo?cat?ing that the coun?ties and munic?i?pal?i?ties have to do this. Itís purely local option, and it comes to us at the end of the day when they make that approval.

COL?LECT?ING THE FEE
Q: Youíve said that the Pub?lic Util?ity Com?mis?sion may out?source that fee col?lec?tion in the first year to a pri?vate com?pany. Why would you need to do that?

A: Itís a mas?sive under?tak?ing, both in the short run and look?ing down five years from now. We donít have, built in, the abil?ity to put these IT sys?tems in place, that are bet?ter left to the pri?vate sec?tor. We actu?ally do this already with the col?lec?tion and dis?tri?b?u?tion of the uni?ver?sal ser?vice fund that many peo?ple pay for in their monthly tele?phone bill. So the modelís already in place.


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Whatís Next For Pennsylvaniaís Impact Fee?
Map?ping Penn?syl?va?nia Coun?tiesí Impact Fee Money
TOP?ICS

ìCall?ing The Balls And Strikesî ó The Pub?lic Util?ity Commission

Q: Weíre on a very tight time?line here. Is there enough time to get those bids out and get a com?pet?i?tive bid?ding process and get a com?pany in place to quickly turn around and col?lect that fee revenue?
A: We feel very con?fi?dent weíll be able to meet that dead?line, get?ting an RFP out on the street begin?ning in March. And hope?fully hav?ing a con?trac?tor on board no later than June 30. ÖWe have some very aggres?sive dead?lines. For me as the chair?man of the Pub?lic Util?ity Com?mis?sion, my biggest con?cern, or the thing that would keep me up at night is our inabil?ity on Decem?ber 1 not to be able to meet the dead?line to dis?trib?ute those funds back to com?mu?ni?ties. I think that would be a fail?ure on our part. ..Thereís no room for error on our part.

A: ÖOne of the things I feel very strongly about, if you look at the act Öthereís pre?scribed lan?guage about what that money can be used for. One of the things I feel very strongly about is we will put forth the con?cept of a con?for?mance report that munic?i?pal?i?ties and coun?ties will have to fill out, with detailed invoices on where they spent the money. I donít want to be, as chair?man of this com?mis?sion, find?ing out 18 months down the road that we had some bad actors out there that didnít spend the money prop?erly. I think that would be a dis?ser?vice to tax?pay?ers. I think it would be a com?plete and utter fail?ure of this new leg?is?la?tion. So weíre going to be very focused as a fis?cal watch?dog to make sure the money is spent appro?pri?ately, on the appro?pri?ate items that are pre?scribed in the legislation.

Q: Will you apply that same over?sight to the statewide agen?cies receiv?ing money?

A: I think weíre all in that same boat together, so absolutely.

POLIC?ING LOCAL DRILLING REGULATIONS
Q: Letís go to the more con?tro?ver?sial aspect of this: the appeals process, and the PUCís role ñ some of the peo?ple who wrote the bill referred to it as the ìumpireî decid?ing whether or not munic?i?pal zon?ing and reg?u?la?tion is rea?son?able. Does the PUC do any?thing like this in other fields right now, that it can build on?

A: We pro?vide ñ if a local util?ity wanted to site a trans?mis?sion line or file for a rate increase ñ con?sumers in Penn?syl?va?nia have the oppor?tu?nity to a pub?lic input hear?ing to be heard in front of an admin?is?tra?tive law judge. So those same struc?tures are in place under this new reg?u?la?tory regime.

Q: Who is ulti?mately going to be mak?ing the deci?sion of whether or not munic?i?pal zon?ing fits into the new frame?work? Is that going to be some?thing that com?mis?sion?ers will vote on each time? Will that be assigned to some?one else?

A: We will work through our law bureau. They can pro?vide an advi?sory opin?ion on whether the par?tic?u?lar ordi?nance over?stepped its bounds. We will be able to do that in a 120 win?dow. I think itís crit?i?cally impor?tant again to men?tion that all these inter?ested par?ties ñ weíre seek?ing input from them now, as we speak, that we can hear from them. And we might find out there were cer?tain things we envi?sioned that might not work. Weíre very early into this process.

Q: It seems like youíre say?ing that as of right now, that deter?mi?na?tion of whether local ordi?nances can stand will come from legal staffers within the PUC, but that could change going forward?

A: It could change going for?ward, but thatís how we envi?sion it. As I stressed ear?lier, itís local option. So itís not the ìBig Brotherî PUC dic?tat?ing terms on whether they adopt or not adopt. We are sim?ply here to say if they adopt an ordi?nance, we review the ordi?nance and move for?ward. If the cleats over?step the chalk lines, we will take the judi?cial steps to say, this is the improve?ment you need to make around that ordi?nance. And if you donít make those improve?ments youíre not eli?gi?ble for your impact fee money.

Q: When youíre tak?ing a look at local zon?ing, local ordi?nances, are you going to base that deter?mi?na?tion strictly on whatís in the act, or are you going to con?sider pre?vi?ous leg?is?la?tion for oil and gas drilling, as well?

A: I think you go off whatís pre?scribed in the leg?is?la?tion. And thereís a basic pro?vi?sion in the leg?is?la?tion ñ itís a kind of boil?er?plate that the local com?mu?ni?ties can adopt when they adopt the ordi?nance. And so I would just, being a big advo?cate for rule of law, I donít think weíre going to make up law here at the com?mis?sion. Weíre going to go by whatís pre?scribed in Act 13.

INSPECT?ING PIPELINES
The new impact fee isnít the only leg?is?la?tion giv?ing the PUC more power over nat?ural gas drilling. An act signed in Decem?ber gives the PUC more author?ity over pipelines trans?port?ing nat?ural gas from Mar?cel?lus Shale wells.

Q: Ear?lier this month the com?mis?sion voted to cre?ate a statewide reg?istry of pipelines. Take me through what that does, and how that will help you to start tak?ing a look at these pipelines, through this new legislation.

A: [Act 127 cre?ates] a new respon?si?bil?ity for us. Many peo?ple think of us as if thereís an event in the PECO ser?vice ter?ri?tory, in their gas dis?tri?b?u?tion net?work, we send inspec?tors out. Or Philadel?phia Gas Works, UGI, or any one of our num?ber of local gas dis?tri?b?u?tion com?pa?nies. Well now you take that 46,000 miles of pipeline that we cur?rently do gas safety over?sight from, and now you over?lay it with Mar?cel?lus Shale inter?state pipeline being devel?oped. So a tremen?dous ramp-up for us. A tremen?dous chal?lenge in find?ing com?pe?tent peo?ple to be gas safety engi?neers. Train?ing them, and obvi?ously get?ting them out in the field to do these inspec?tions. We had not tra?di?tion?ally done that.

Q: There was a bit of con?fu?sion when this was passed. These are already-existing fed?eral laws. Why werenít they being enforced already?

A: The big issue isÖthat here at the Pub?lic Util?ity Com?mis?sion we have approx?i?mately 15 gas safety inspec?tors with over?sight of 46,000 miles of dis?tri?b?u?tion pipeline. On a national level, [fed?eral reg?u?la?tors] has only 132 inspec?tors required to cover 50 states. So right then and there, you rec?og?nize that we donít have boots on the ground to prop?erly deal with these gas safety chal?lenges that present them?selves. I need not remind any?one of those tragic events in Philadel?phia, Allen?town, and the west coast, with the San Bruno explosion.

Q: Youíve got about 15 inspec?tors now. You said youíre going to bring on another 7.

A: And then down the road we prob?a?bly will bring on another ten. And thatís over a five year period. We have a huge focus now around safety over?sight of the Mar?cel?lus Shale industry.