Gov. Lincoln Almond’s pick for chairman of the Public Utilities Commission collected a paycheck from the state’s largest electric utility for much of the 1970s. In a statement naming Elia Germani to the influential PUC position, Almond pointed to the Warwick lawyer’s “firsthand knowledge of the utilities industry,” gained during his eight-year stint as a Narragansett Electric Co. attorney, as proof of Germani’s qualification for the job.
But local consumer groups are wary of the growing number of state utility regulators who also are former utility employees. They say a solid record of fighting for the little guy should be the primary qualification for utility regulators and commissioners.
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If Germani’s appointment is confirmed by the state Senate, he would join two other top utility regulators in Rhode Island whose resumes include years of service to utilities regulated by the state.
Gov. Lincoln Almond raised some eyebrows in 1997 when he appointed Thomas Ahern, a longtime telephone company lobbyist, to head the Division of Public Utilities and Carriers. The division staff is responsible for protecting the interest of consumers in regulatory matters involving energy, water, cable television and telephone companies.
Ahern retired as the director of public affairs for NYNEX, which later merged with Bell Atlantic Corp., after 24 years with the telephone company.
Another top division official, Administration and Operations Officer Raymond Allen, worked for the regulated gas utility Providence Energy Corp. for 28 years until 1994.
The migration from utility employee to utility regulator isn’t exactly common, but isn’t unheard of either, according to national regulatory associations. The phenomenon gets mixed reviews from the regulatory community, utility competitors and consumer advocates.
“You judge it on a case-by-case basis,” said Mark Stultz, spokesman for the Electric Power Supply Association, a national trade association representing energy producers and marketers that compete with regulated utilities such as Narragansett Electric. “There have been a lot of very qualified people who have come out of a utility background and bring with them some significant knowledge and experience about the way utilities operate.”
But Robert Arruda, chairman of the local watchdog group Operation Clean Government, would prefer to see regulators bring other qualities to the job.
“I think it’s as important, if not more so, that they have a proven dedication to serving the public interest,” Arruda said. “I think the public interest has to be served by the PUC.”
The state Ethics Commission cleared the way for Ahern’s appointment by issuing an advisory opinion in 1997 that said his ties to NYNEX, including a pension from the company, didn’t preclude him from serving as administrator of the division. However, the commission advised Ahern that his connections to NYNEX might require him to steer clear of matters involving the telecommunication industry.
Ahern again sought the Ethics Commission’s guidance in 1998, when he requested an opinion on whether he could go before the General Assembly to argue against legislation that would have required telephone and electric companies to remove old utility poles within three months of installing new ones. The Ethics Commission’s second advisory opinion found no reason why Ahern, as administrator of the division, couldn’t get involved in legislation involving Bell Atlantic or the telecommunications industry.
Cox Communication was gearing up to compete with Bell Atlantic in providing local telephone service and high-speed Internet access at the time Ahern was appointed to head the division. Cox’s John Wolfe, director of governmental affairs for New England, said Cox officials met with Ahern before his appointment was confirmed to voice their concerns about his ties to the telephone company.
“We came away from that meeting feeling that he was not going to take an agenda into that job,” Wolfe said. In the years since, he added, Ahern has proven himself to be a fair and knowledgeable regulator.
The division’s No. 2 man said he has never sought an advisory opinion from the ethics board because his duties as administration and operation officer don’t involve direct regulation of companies such as his former employer ProvEnergy.
“I don’t get involved with that,” Allen said. “I’m strictly an operations and administration person. I don’t get involved with any cases that are filed by the various utilities.”
Germani could have extensive influence on cases involving his former employer specifically and the electric utility industry in general. But Germani doesn’t see his time at Narragansett Electric as a liability.
“If anything I think service with an electric utility, or any utility, is a benefit because you know what it is to operate in a regulatory environment,” Germani said. “You know what you should do and what you should not do.”
Operation Clean Government and the Pawtucket-based George Wiley Center, which advocates for the poor on energy issues, had backed Assistant Attorney General Paul Roberti for the PUC chairman slot that has been vacant since James Malachowski stepped down in October.
Roberti is chief of Attorney General Sheldon Whitehouse’s regulatory unit. Commissioner Brenda Gaynor headed up the regulatory unit in the early 1990s under former Attorney General James O’Neil.
Henry Shelton of the George Wiley Center expressed hope that Germani, although not his group’s first pick for the job, will consider the impact of the commission’s decisions on the poor.
“We would like to see the person coming in to be very aggressive to make sure that low-income consumers are protected in this day and age when companies are buying each other out. That’s our concern,” Shelton said, referring to the pending merger of the state’s three major electric utilities and the proposed purchase of its major gas utilities by a Texas company.
Beside his time at Narragansett Electric, Germani worked for another company regulated by the state, Blue Cross and Blue Shield of Rhode Island, through the 1980s and much of the 1990s. Germani said his career as a corporate lawyer doesn’t mean he is out of touch with the needs of consumers.
“I always had a strong view that our primary responsibility was to serve the public. That was one of the guiding principals in the way I advised the company,” he said of his time at Blue Cross. “I think what a commissioner should be is a person who can balance the interests of the ratepayer and of the company. That’s the key ingredient.”
Operation Clean Government and the George Wiley center maintain that Roberti is best suited to strike that balance. And Roberti may get another shot at a PUC post when Almond names a replacement for Commissioner Kate Racine, whose term officially ended last March.
“I think it would be real strange if they fill two positions and Roberti isn’t one of them,” Shelton said. “If he isn’t one of the two, then they aren’t looking for the most qualified person.”
“He has a lot of experience,” Arruda agreed. “I think he’s very good and would do an excellent job protecting the public interest.”
Meanwhile, the Senate Judiciary Committee will schedule hearings to consider Germani’s qualifications for the job. The committee will make a recommendation to the full Senate, which must confirm the appointment before Germani can be seated on the PUC.
The committee hearings hadn’t been scheduled at press time, but the chairwoman of the Senate Judiciary Committee, Sen. Teresa Paiva-Weed, expects to begin interviewing Germani and reviewing his background sometime early next month. The hearings could last for several weeks.
“We generally take our time, particularly with a position of this significance,” said Paiva-Weed, a Democrat who represents the Newport area. “The committee’s focus is on whether or not the individual in qualified.”
