PRC Hearing Examiner Dismisses “Stipulated Agreement”

By: Bill Whaley
19 August, 2016

Hearing to continue Sept. 19

Somebody (?) Blundered

Black Mask Investigator-1On August 18, Elizabeth Hurst, hearing examiner in the contentious KCEC rate case dismissed a “stipulated agreement” between the Coop and PRC staff. Hearing officer Elizabeth Hurst writes, “The Non-residential rates contained in the Stipulation and Revised Stipulation were not included in limited scope as set forth in the Commission’ s Order on Motion to Narrow Scope. Therefore, the Hearing Examiner finds that the Non-residential rates contained in the Stipulation and Revised Stipulation are beyond the scope of the Hearing Examiner’s authority, and the Hearing Examiner cannot hear the Stipulation or Revised Stipulation.”

Earlier in March KCEC moved to narrow the scope of the rate request case to residential rates, a motion approved of and ordered by the Public Regulation Commission, which also requires the Coop to notify members. Protesters and Interveners filed objections based on the information presented. Then in late July the Coop negotiated with PRC staff, a staff obligated to represent the Commission and the Public, behind closed doors.

In effect the PRC staff rejected its own prior conclusions, presented in written testimony and negotiated a settlement that included an increase of around $800,000 more in total charges for KCEC members, an increase that included rate increases based on both residential and commercial charges. But the increase in Commercial rates had not been proposed or members noticed per the hearing process and Hurst rejected the settlement.

UnknownThough both KCEC and Staff submitted briefs in defense of the “stipulated agreement” the hearing officer noted that the arguments were not lawfully persuasive and said the hearing process would proceed as originally scheduled on September 19.

While one can understand KCEC’s desperate attempt to short-circuit the Interveners and the hearing process, due to their alleged cash-short condition, the staff’s change of mind and defiance of well-known PRC policies and statutes defies easy explanation.

At the July 18 meeting with Interveners when staff revealed the existence of the “stipulated agreement,” a negotiation which left out the interveners, who represent the public members of the Coop, staff attorney Brad Borman introduced a new player, Bruno Carrara, PRC superintendent of utilities, to the Interveners as “my boss.”

n-snake-lightApparently, the orders to negotiate the “aberrant” agreement came down from above to staff. The alleged “order” was meant to circumvent the PRC’s hearing process and weaken the case for interveners, who followed the rules. This political movida, dreamed up, no doubt by KECE attorney Chuck Garcia and CEO Luis Reyes has back-fired,  cost the Coop thousands upon thousands of dollars in legal fees, and weakened the credibility of staff.

Indeed, the staff had done very good work but now their testimony and credibility are suspect. They were red-faced on the day when they confessed their doings behind closed doors. Now you can color the faces of Attorney Borman, economist John Reynolds et al purple.

On the one hand the interveners are relieved and pleased by the hearing examiner’s decision. On the other they are waiting for another “shoe” to drop in the form of a new Garcia-Luis Reyes-inspired political-public relations “movida.” But this case isn’t over until the PRC sings and potential court appeals are nullified or exhausted, and left to gather dust in the offices of multiple lawyers.

The Reyes-inspired “stipulated agreement” is just one more movida, a case of over-reaching and mismanagement, just like all the mismanaged diversification projects, that have cost Coop members millions of dollars in lost revenue during the last 15 years.  The KCEC Board of Trustees has shown a distinct lack of interest in the PRC hearing, which speaks to their “negligence” and confirms their interest in the “goodies” but not in the public good of the members.

vmartinezAs Trustee Virgil Martinez might say, “I feel sorry for the Kit Carson Coop.”

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