Susan Parker in the Parlor

In natural gas, our prices seem to be higher than in other states…

Recently, we had a very interesting and wide-ranging conversation in the Political Parlor with Dr. Susan Parker, elected last year as a Democrat to serve on the Public Service Commission. She served as State Auditor from 1999 to 2003, and she was the first woman in Alabama to be nominated for the U.S. Senate. She is rumored to be considering a run for Lt. Governor in 2010.

While she did not offer many hints about her political future, she did speak with enthusiasm about the issues that she and the Public Service Commission are facing. (She also addressed some of the energy issues facing Alabama in a recent Op-Ed piece that ran in several Alabama newspapers.)

Read on and see what Susan Parker shared with us about pressing issues facing the state. (And who knew that the Public Service Commission dealt with railroad track safety or performed natural gas pipeline inspections?)

What is the Public Service Commission?

Just yesterday a gentleman asked me if I could meet with some groups for coffee. We were talking about the Public Service Commission, and what impact does that have on our everyday lives? So I told him about the Public Service Commission. When I finished, he said, “Man, that has more impact than anything on our lives.”

Within the next 20 years or so our country is going to have to have an increase of about 40% more generation capacity [for electric power], and nationwide there is not a plan for how we are going to get to that generation capacity.

The Public Service Commission, in general, you could say regulates utilities. Of course, we do not regulate TVA [Tennessee Valley Authority] in the electric realm because it’s federal, but we regulate Alabama Power in the electric realm. We do not regulate co-ops or municipalities.

In the gas area, we regulate Alabama Gas, Mobile Gas, and Wheeler Gas.

In telephones, we do still have some regulatory authority over telephones. Although in February of ‘08, an act passed by the legislature a couple of years ago will go into effect. It will mean that we will no longer regulate the cost of anything except the most basic service. If you have anything like call forwarding, call waiting, or caller ID, then your service is not basic and we will not be able to regulate the price of that.

That is something that the consumer really needs to know about. I believe this week there is a letter going out from AT&T informing customers about that. They were required in the legislation to send out a notification letter to consumers. That letter should be telling them that in February that the price of phone service [except basic service] will no longer be regulated.

The state legislature passed this?

In ‘05. The Telecommunications Act of ‘05. The Public Service Commission and the commissioners at the time did oppose the legislation, but the legislature was convinced that competition would take the place of regulation, that by ‘08 there would be enough competition so that you no longer needed to be regulated as a monopoly.

In some instances, that is true. For example, they would say, “Well, you have the choice of a cell phone.” Well, for a lot of Alabamians a cell phone is not a choice for a regular phone. It may be for me or for you, but it’s not for everybody. Also, not everybody can use a cell phone in their home. For example, if they live in a remote area.

And then there are other entities who are going to be offering telephone service. Of course, VOIP [Voice Over Internet Protocol]. Now some cable companies are getting into it. But especially in rural Alabama there are not other choices in many cases.

I interrupted you and got you off-track about the Public Service Commission.

Yes, and we do some trucking. We license and make sure that all trucking companies are insured. As well as railroad track safety. We don’t do the railroad crossings. That’s a federal thing, but we do the railroad track safety.

And we do gas pipeline inspection. There are a few water companies. There are a few private water companies in the state that are not municipal and we do regulate those.

When you say you do railroad track safety, does that mean you have inspectors?

That’s exactly right. And I have been on one of those tours. One of the things that I did when I came here to try to find out what we do because it is very complex and very diverse, I went with some of the people who do these jobs

I went up to Scottsboro. It’s very interesting. What regulates the crossing, what lets the crossing know that a train is coming, all of that, the mechanics, the electronics, are located underneath the railroad track and we inspect that – to make sure it’s not loose, that it’s in place, and that it’s working. Because you can see if it were not working, there would be a train coming and the gate would not come down or the signal would not go off.

In its structure, the PSC is headed by three commissioners, and we are all elected statewide. Only about 18 or 19 states have elected commissioners, and in some of the states where commissioners are elected, they are elected by districts rather than statewide. A lot of people don’t know the structure. One of the first things I tell people about is the structure.

Commissioner Jim Sullivan is the president. Jan Cook and I are commissioners. We are all three commissioners. He [Sullivan] can call a meeting on the phone if he wants to, and also he handles a little more of the administrative detail as president.

I would expect that in your campaign and preparation for serving on the Public Service Commission, you would have expectations and a sense of what the job entails. But what was the biggest surprise?

I think, just the complexity of the industries that are involved. Each of these industries has federal regulations, from either FERC [the Federal Energy Regulatory Commission], or the Federal Communications Commission with telephones, each area has its own federal regulatory agency. Then there are many, many federal laws. Then there are state laws. Then state agencies. Of course, us. So it is very complex in just figuring out the bureaucracy and the intricate relationship among all of the organizations, rules, and regulations, so the complexity of all of that is something that surprised me.

Is there a state that is a model for how they handle these issues? Do you have a model in mind? Is there someone that is really doing these things well or doing interesting things?

It varies from area to area. I visit other states and attend national meetings on these issues. From the national meetings and of course from my readings, in the area of electricity all of the things that are happening now are on renewables and energy efficiency. That is where the change is happening now. I know that New Jersey has had a very good program on energy efficiency. I have met with their commissioner there. They do some good work there.

In other areas it would vary. It’s interesting that Alabama is looked to as a national leader in the area of gas pipeline safety. Our people go all over the country training people.

One of the things that we see in other states that we don’t want to do is deregulation. California was the first famous victim of that. Then Maryland, some of their rates have gone up as high as 65 or 70% in the last two years. Same with Delaware and a couple of other states in the northeast.

So Alabama is really in pretty good shape in some of these areas.

In natural gas, our prices seem to be higher than in other states and seem to be higher than maybe they should be perhaps. I am really looking into that. We have had people researching it, I’m making a trip in a week or so to Washington to meet with FERC, Commissioner Sullivan and I.

We are doing everything possible, to dig as much as we can to find out if these reasons we are given [for high natural gas prices] are legitimate. That is a real concern.

Has there been any change in the PSC now that it is a Democrat majority body?

I really could not say that. It is very non-partisan, to be honest with you. It is not like the legislature where party really plays a role. It is a very independent body

What do you find most enjoyable in your work with the Public Service Commission?

I think it being probably the most exciting, challenging time in our history to be in this business, because right now we are facing some very challenging times. Within the next 20 years or so our country is going to have to have an increase of about 40% more generation capacity [for electric power], and nationwide there is not a plan for how we are going to get to that generation capacity.

Also, we are having renewable mandates coming down from Congress. Probably going to be 10 to 15% renewables mandated within 10 years.

Then there are just many new changes in renewables. We used to just say wind or solar. Yesterday I attended a meeting where there were probably 70 or 80 people, and it seemed that they were all representing a different idea about renewables, whether it was geothermal or hydrogen, all kinds of ideas, including biomass that we are already into.

So it is just really an interesting time to be in business. Now it is also very challenging because all of this – the renewal mandate, the increased demand with the lack of supply – it’s going to mean that we are going to have higher prices for all kinds of generation capacity. My primary goal in doing this is to serve others and to help people.

In helping people, you think primarily, “Well, I want to come in here and I want to lower their rate.” Well, I do. I want to but with all of these challenges that we are facing, that is not the environment that we are in. Just as I mentioned, a 72% increase in Baltimore, Maryland, and 65% increases in so many other states, and it is just a very frightening time, but what I do think I can do is I can help to ease the burden as much as possible by trying to fight to keep the rates as low as we can, but also with programs that we have.

That is the question I get more than any. “Oh my gosh! When I am going to get DSL? When am I going to get fast broadband?”

Right now, I am promoting LIHEAP. LIHEAP is the Low Income Heating Energy Assistance Program for the poor to get help with their utility bill and it might pay, say, one utility bill in the summer and one in the winter. Well, people are about to be hit with unbelievable utility bills, you know after this terrible heat wave.

I have spoken with folks in Congressman Davis’ office and others to say, “What can we do?” Maybe we can get some emergency LIHEAP funding. We get help for our farmers, which is great, on the emergency drought fund. So maybe we can help to get some emergency LIHEAP funds to pay an additional bill this summer or to pay more because the funds always run out.

Also, there are programs that have been in place for many years like the Lifeline/Link Up program for telephone assistance. That program will pay half of someone’s basic telephone bills each month. Also, half of an initial sign up for telephone or even cell phones. It does not pay the monthly cell phone bill but just half the sign up, the initial cost, for our people who are low income.

One of the things that I was able to help to get accomplished is that at one time, Lifeline/Link Up was only available to those who are receiving Medicaid but now that has been expanded to include SSI, people who live in public housing, those who receive food stamps and other kinds of programs. So if they are already certified that their need is there and they are on these programs then they can also sign up with this Lifeline/Link Up and I have made a statewide campaign, campaigning about that, and I am continuing to do that.

Another thing to help people is information. We are going to have a consumer education initiative campaign to try to help people to know even more about these programs. Also, to help them see and understand the benefits of energy efficiency and renewables. The poor might not be able to do this if the incentives aren’t there, but solar panels, or working with poultry farmers to try to help them get to be able to generate their poultry litter into electricity.

It is so interesting and so diverse. There are so many different aspects of it that is what I love about it the most. It is a wonderful opportunity to be about the mission. We are feeding the hungry and clothing the naked. I believe that is why we are in public office to do that. It is a great opportunity but it is also a great challenge. I just try to live up to it the best as I can.

I saw on one of your releases that AT&T had agreed to make broadband access available to all of their customers by the end of 2008.

That is correct. That is the question I get more than any. Certainly, the people who are using a computer are going to be thinking, “Oh my gosh! When I am going to get DSL? When am I going to get fast broadband?” AT&T, when they merged with BellSouth did make that commitment to the FCC. We have done a resolution. We are working with them to make sure that that is accomplished. I feel sure that they are going to accomplish it. It might not be exactly as we would like. I know that part of that is maybe offering some satellite. I think they have something called Wild Blue that is satellite and it is still so expensive maybe $70.00 a month, something like that.

But they are working. There are other options coming out, cable and all kinds of other companies are offering options now. I know it is painful for people who cannot move forward fast enough.

Society evolves. Forty years ago nobody could have really foreseen internet like we see it now, and in 30 years, 40 years, there may be some other service that we may even call a utility but we just cannot even foresee what that would be like. How does something like that become part of the purview of the Public Service Commission? How does the PSC take something new under its wing as part of its regulatory oversight?

That is a very good question, and it is all based upon what the legislature deems that we take on.

We do not take on or “un-take” things based on any of our own doing. We are a statutory body. Whatever the legislature puts into statute, into law, that is what we do.

If they take it out of our purview then we really do not have any options on it. For example, over the years, cable television has not been under the purview of the PSC, and it is in many states and now, in some places, there is competition but for so long there was not any competition. Now, in some place, there are two or three companies that you could choose from, but in many places, there is not.

I guess it would be fair to say that most businesses that offer these services like cable TV or Internet, would prefer not to be under the auspices of the Public Service Commission.

That is right. You would think that and in general that is true, but it is kind of interesting that when the legislature passed the Telephone Communications Act of ‘05 some of the smaller telephone companies opted to stay under the PSC, because they were small and they really cannot compete. I was not here then but, generally, no, nobody wants a regulation.

We do not take on or “un-take” things based on any of our own doing. We are a statutory body. Whatever the legislature puts into statute, into law, that is what we do.

But there have been a few instances where people do. We have the Do Not Call register and when that was established, some entities who were not in it, for example, charity, let’s say the Red Cross or someone, wanted to be covered. They can call people [who are on the Do Not Call list], but they said we do not want to call people that do not want us to call.

So, they wanted to be exempt from that, and to actually be under the Do Not Call and they were not allowed to be, the Attorney General said they could not be, but in general most people do not want to be regulated.

Charities do not fall under “Do Not Call.” Charities are not obliged to not call people on the list. Is that correct?

That is right. That is why you probably get like I do phone calls from the Police Benevolence or the State Troopers Association or some of those. They are exempt from that rule by the legislative statute. Also politicians are exempt from that rule.

Interesting. But would a charity have access to the Do Not Call list if they wanted to avoid calling people that were on the list?

That was the question and at that time I believe, the Attorney General said, no.

They cannot even get the list to say we are not going to call these people?

[A charity does not have access to the Do Not Call list, and so] cannot choose not to call people who do not want you to call.

You mentioned electricity, increasing capacity and renewables and so forth. What kind of interest does the Public Service Commission have in nuclear energy? Browns Ferry [Nuclear Plant] is TVA, isn’t it?

Browns Ferry is TVA [and so not under PSC regulation], but Alabama Power does have Farley Nuclear Plant down near Dothan.

So we do regulate them with that plant. Our role would be approving new generation when Alabama Power at some point is going to have to say, “Look, we’ve got to build new facilities.” They will present to us whether they wanted it to be coal or natural gas or nuclear expansion or whatever their plan is, and we would be involved in that.

Okay. A renewable energy source would be one that does not consume something, like coal. In other words, like wind and solar…

That is right. Primarily non fossil fuel. The interesting thing is that wind seems like the one that is catching on. It is so big right now and unfortunately, Alabama does not have wind capacity. Maybe at the top of Cheaha Mountain or a couple of our other mountains that we have. Also the gulf coast and not many people visualize windmills on the gulf coast.

But in North and South Dakota, Minnesota, in the northwest, those are just really catching on. It is a wonderful resource, but we unfortunately do not have much access to it.

Solar can be an option here right now. There is a lot of expense but that is going to be coming down as we progress. I was in a conference recently and the guy from New Jersey made a presentation. He is in the solar business. He said they are putting solar units on the top of every warehouse in New Jersey. He said, you know, we have got a lot of warehouses in New Jersey. I asked him what can make that work in Alabama. He said mandates plus incentives plus consumer participation, customer participation. Right now we do not really have any of those.

We do not have any state incentives. We do not have any mandates to do it. We do not have much participation. We even have restrictions against people participating because we have subdivisions with restrictions that you cannot put a solar panel on your house. We have a long way to go but we need to get going on that.

It is very important and it is a good source [of energy]. We need to be moving on that and some of the other sources that we have.

The big thing we have in Alabama is trees. Biomass in the area of wood products is a big resource. I see us being able to use wood chips. There is a product called black liquor. I know there are some controversial things about that, but they are trying to work that out. I think the controversy is it explodes. [Laughs.] Just a little problem.

But that is a by-product of the industry, the pulp wood industry. Since most of our state is in trees, we have a lot of waste that is just out there. When they take the limbs and when they do the harvesting, there is just a lot of waste. I see that as a good option for us.

Right now, in Gadsden, Alabama Power has a switchgrass plant where they use switchgrass in with coal to generate electricity. They are experimenting. The switchgrass is okay, but it is really not all that viable. They are experimenting with wood chips to put in with that coal. The trick is to just get them the right size.

I confess I am not really familiar with biomasses. Is this like ethanol, or is this something else?

Ethanol is not related to energy production. That is only related to fuel. Generally nobody says that you can turn corn into electricity. It’s way too expensive. Most people think it is too expensive even to use for gasoline at this point.

But there are many kinds of mass. Garbage, for example, is one in large cities where they have large waste. They are using that. They are turning that into energy.

The poultry manure. Litter, I believe they would call it in the poultry business. We called it a few other things when I was on the farm. [It could be turned into energy.]

I get the sense that there have been more articles and scrutiny given to the Public Service Commission, say, in the last two years than maybe the previous 10. Do you have a sense of that? What is your take on any of that?

I think that is fair to say, yes. There is a great deal of scrutiny because of the question of “are these [natural gas] prices too high and if they are, why are they too high?” When I came to the Public Service Commission, I just made it my goal to say I am going to work to find out everything I can about this, and the other commissioners are very cooperative. Commissioner Sullivan has taken a great leadership role in this and is very committed to it. We have had a team [looking into it], and we are working with all sides of it.

I just do not know if we are going to find anything. I do not think that there is some big smoking gun. I just do not know but we are going to find it if there is. We are looking.

The big thing we have in Alabama is trees. Biomass in the area of wood products is a big resource. I see us being able to use wood chips.

There are legitimate reasons why gas in Alabama is expensive. One of the big things is that we do not use a lot of natural gas. So you have customers spread over a large area. They are not selling as much gas per customer, or per square mile, as you would in the northeast or in a colder climate or even in a more urban climate. You have the same infrastructure. You have the pipelines. You have the meters. You have a lot of the same infrastructure.

But the vast majority of cost is the gas itself. Are they getting the gas at the lowest possible price they can? That is just something that we are continuing to look at, but it is a big concern to everybody.

There are legitimate reasons why of course our natural gas is going to be higher than Texas and Louisiana.

But should it be that much higher? I think it is a matter of degree. There is natural gas that comes out of the gulf. People there in Mobile probably look out there and say, “Why?” But most of that gas all goes to Florida. They have a much larger market. There is a huge population in Florida.

And your own political ambitions down the road?

Mine right now is to learn this job and do the very best that I can at this job. I have been so overwhelmed for the past eight months. I worked for Greater Birmingham Ministries for a year and I thought I was catching on pretty good on some things but when I got here, it was so overwhelming, the information, the things I had to learn.

I have hardly had time to stick my head up from out of a book. I just stay open to the possibilities and whatever is best but I do not rule out anything down the road. Right now I am just focused on doing the best job I can here. Certainly I am not running for anything in ‘08.

Except for the “not running for anything in ‘08,” that is pretty much precisely the answer I guessed I might get from you. Do you have a take on the Public Service Commission president’s race next year?

To my understanding, Commissioner Sullivan is going to seek re-election. I would not be running against him in any way. I do not think that would be good for the commission. He has been wonderful to work with for me. So, I will not be getting involved in that race.

Do you have thoughts on the 2008 US Presidential Race? Will you be endorsing a candidate?

Not in the primary that I know of but several candidates have been very helpful to me when I ran. I know them fairly well, but I certainly believe it is time for a change in this country. I certainly hope that the Democratic nominee wins.

When I was running, John Edwards was here in the state, met with him several times and I met with Senator Clinton here and Senator Obama. I just think it is wonderful that our field of candidates is so good, that people like any of them fine. It is interesting that their field of candidates has people saying, “Can’t we get another candidate in here?”

You have been a college administrator and college dean, do you have thoughts on the two-year scandal and the “double dipping?”

I do. I have very strong feelings about it because I have always been so proud of my roots in the junior college system and it is embarrassing. There is a distinct difference to me, so, between a persons who does a legitimate job, does a good job and serves – whether it is on the city council somewhere or in the legislature – and people who are essentially committing fraud.

If that kind of thing is going on, and I do not know that it is because we do not have cases proven yet and I do not want to cast stones at anyone just because of accusations but if there is a contract where no work is done, if there are jobs were no work is done, that is wrong. Those people should be dealt with but that does not mean that you should take the whole broad brush and say no public servant can ever be an educator.

Any last comments?

As time goes on, I am going to be needing the help of the people who are on the computer, using the computer, and others to help us get out information about our education initiative and help us to help others learn about the opportunities that are out there for energy efficiency and renewables.

I have written an op-ed piece that has run in some Alabama newspapers. It gives a global overall view of what I was thinking about energy.

Many thanks to Dr. Susan Parker for stopping by and generously sharing her time with us.