Responding to the Freedom Industries chemical spill
This past Monday, Brooks McCabe started his job as the newest Commissioner of the Public Service Commission. McCabe was appointed by Governor Tomblin to fill the vacancy left by Ryan Palmer, who resigned from the Commission in September. McCabe will serve out the remainder of Palmer’s term, which ends June 30, 2015.
McCabe is a surprising pick, given that he is not a lawyer and does not have much of a background in utility regulation. (For more on his recent statements relating to electric utility regulation, see here). One relevant piece of experience that he does bring, however, is his leadership in cutting corporate taxes in West Virginia, including the phase out of the business franchise tax and the reduction in the corporate net income tax.
These and other tax cuts that have gone into effect over the past few years have very real effects – including for the small water utilities that McCabe will now be regulating. Throughout the various debates in the legislature around the chemical leak and SB 373, we have frequently heard legislators complain that there’s no money. This meant, among other things, that the legislature ended up passing a requirement in SB 373 that all water utilities develop detailed source water protection plans without providing any funding to help the smaller, rural water utilities. The Rural Water Association estimates that this will cost water utilities $12.2 million, and the Public Water System Supply Study Commission established by 373 has said that it will likely recommend that the legislature provide this money. That money may be hard to come by at the legislature – but it’s really not a lot of money compared to the $205 million that the state won’t get in 2015, thanks to reductions in the corporate net income and business franchise taxes.
The good news is that the Public Service Commission’s investigation of WV American Water’s response to the Freedom spill can now move forward. The case has been on hold for the past couple months; when Commissioner Palmer resigned and Chairman Albert recused himself from the case (due to perceived conflicts of interest from having been WV American Water’s attorney for thirty years), the Commission lacked a quorum to continue with the case. The Commission can now be expected to rule on motions filed in September by Advocates for a Safe Water System, the Consumer Advocate Division, the Commission Staff, and the WV Sustainable Business Council arguing that WV American Water failed to turn over documents that the Commission had ordered them to disclose; and that WV American Water had designated information as “confidential” that should be made publicly available.