The Georgia Public Service Commission (GPSC) is a quasi-legislative, quasi-judicial regulatory agency charged with protecting the public interest and promoting a healthy business-investment economy. Historically, the GPSC has been responsible for setting the rates charged by telecommunications, gas, and electric companies and for establishing and enforcing the standards for quality of service.
History
The regulatory functions of the GPSC have changed dramatically since its founding. On October 14, 1879, Georgia became one of the first states to establish a regulatory agency to oversee railroad expansion and competition. Known as the Railroad Commission of Georgia, the commission consisted of three members who were appointed by the governor and served staggered six-year terms. In 1891 telegraph and express companies came under the commission’s jurisdiction. By 1907 the commission began to regulate docks and wharves, as well as telephone, gas, and electric-power companies, and in 1931 its jurisdiction expanded to cover the trucking industry. In 1922 the Georgia legislature changed the agency’s name to the Georgia Public Service Commission to reflect its expanded regulatory role.
How the GPSC Operates
In 1907 the number of commissioners elected statewide was increased from three to five. Today the five elected commissioners are supported by approximately ninety staff members, and each year the chair is selected by the commission members, based on seniority. Beginning with the 2000 election year, each seat on the commission is assigned to one of five districts. Candidates for the commission must reside in the district with the available commission seat, although the entire state continues to vote for all five slots. Commissioners serve staggered six-year terms.
The commission depends primarily on appropriations from the Georgia General Assembly. In fiscal year 1999 the total budget of the GPSC amounted to approximately $14 million, with approximately $9.5 million coming from the Georgia legislature and the remaining $4.4 million from the federal government and other funds. The fiscal year 2004 budget was $9.3 million.
When regulated utility companies bring a rate request before the GPSC, the request is first addressed by one of the commission’s four standing committees: telecommunications, energy, transportation, or policy development and intergovernmental affairs. The commissioners are assisted by experts on utility and transportation operations, who may provide testimony and make recommendations regarding rates or arbitration. The GPSC makes decisions by a majority vote of the commissioners. It is authorized only to issue administrative orders. Furthermore, its rulings must be consistent with current legal standards and are subject to judicial review by the courts.
The Regulatory Functions of the GPSC
Although the GPSC over the years has regulated the rates and service of the telecommunications, gas, and electric industries, today it does not regulate all utility companies within these sectors. The commission regulates only the rates charged and the services provided by most intrastate, investor-owned telecommunications, gas, and electric utilities operating in Georgia. The commission does not set rates for municipally owned electric and gas utilities or electric membership corporations, although these utilities consult the commission on such matters as financing and the resolution of territorial disputes. The commission also ensures the safety of all natural-gas pipelines in the state. The commission plays a smaller role with regard to the transportation sector. Its authority over truck and express companies and private and for-hire motor carriers is restricted to requiring proof of insurance and safety inspections.
Deregulation
The deregulation of the telecommunications and natural gas industries in the 1990s greatly altered the regulatory functions of the GPSC. Instead of regulating the rates of telephone and gas services, the commission plays a strong role as a manager and facilitator of open-market competition.
Telecommunications
Georgia’s Telecommunication and Competition Development Act of 1995 and the Federal Telecommunications Act of 1996 have greatly affected the telecommunications industry in Georgia. Both statutes sought to turn the traditional regulated monopoly service into a competitive market. Thus the commission no longer sets rates for telephone services but establishes and administers a universal access fund, which ensures reasonable access to services for customers; monitors rates and service quality; and mediates disputes between competitors. By the end of 2003 the number of certificated local competitive telephone exchange providers had grown to 221.
Natural Gas
More than 1.8 million Georgia customers use natural gas. In early 1997 Georgia became the first state to adopt legislation to deregulate natural gas with the Natural Gas Competition and Deregulation Act. The commission’s role under the Natural Gas Act is similar to the one it plays in the telecommunications market: to facilitate the transition from a regulated monopoly to a competitive marketplace. As part of the deregulation process, the Atlanta Gas Light Company, which had long held a monopoly in the market, withdrew from selling natural gas to become a distributor of natural gas in 1999. Unregulated marketing companies now sell natural gas at variable prices, much in the way that long-distance telephone companies operate.
By all accounts Georgia’s transition from monopoly to market competition has been very contentious. Several problems have plagued the deregulation process from the beginning, and unusually high gas prices have recently exacerbated the situation. As facilitator of the deregulation process, the GPSC has played a high-profile role in several disputes. First, early in the deregulation process, the GPSC settled several “slamming” cases with marketers. Slamming occurs when companies switch customers without their authorization. Second, after several marketers persistently billed customers incorrectly, the GPSC resolved the billing disputes. Third, in November 2000 several marketers threatened to shut off service for nonpayment of bills. The GPSC voted unanimously to impose an immediate moratorium through April 1, 2001, on shutoffs of gas service for residential customers. In January 2001, in a three-to-two vote, the GPSC overrode protests from natural-gas marketers and enacted emergency rules to allow consumers who owe money in back bills to switch to marketers with lower prices. Finally, in a recent decision the GPSC ordered $50 refunds for low-income senior citizens. Consumers aged sixty-five and over with annual incomes of $12,000 or less already qualify for special discounts, which are arranged by natural-gas marketing companies.
