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Recommissioning

New Mexico voted to change the PRC. Now comes the hard part

November 13, 2012, 10:00 pm

On a Friday morning at the Public Regulation Commission, Qwest is in the middle of a week’s worth of hearings.


The topic of the hearings isn’t small—Qwest is asking for complete deregulation from the PRC, which would give it the power to set its own prices and, in the words of outgoing Commissioner Jason Marks,  “completely set them free.” Still, Marks is the only commissioner who attended any of the Qwest hearings. 


Once the hearings end, an examiner will recommend an action to the five commissioners, who will make the final decision in one of their upcoming meetings. But Marks points out that commissioners can only collect evidence on a case during the hearings. 


“Commissioners, they’re going to have questions,” Marks tells SFR, “and if their questions are not in the record, they really shouldn’t be asking them come January or February when they’re making a decision.”


There are simply too many hearings like this for the five commissioners to attend them all. But the complexity and diversity of decisions commissioners must make also create problems: In the past, the PRC has made uninformed decisions that were later overturned by courts. 


Marks is hoping that some of this will change as the PRC, which currently regulates the state’s insurance and utility industries, goes through a significant overhaul next year. 


Last week, voters approved three constitutional amendments, marking a turning point for the powerful but embattled state agency, which has suffered embarrassing scandals over the past decade. 


The amendments require the state Legislature to write new qualifications for commissioners, as well as for a newly autonomous Superintendent of Insurance. They’ll also dramatically scale back the PRC’s mission by severing from it two key divisions: the insurance division, which regulates insurance companies, and the corporations bureau, which registers businesses across the state. 


The streamlined PRC’s main remaining task will be to regulate the utility industry. 


“We’re going to lose approximately half of our employees,” PRC spokesman Arthur Bishop says. “We’re going from an agency of 250-plus people to an agency of roughly 125.” 


Those employees won’t lose their jobs, though. Around 20 from the corporations bureau will soon work for the Secretary of State, which already registers some businesses, while around 100 insurance division employees will be transferred to a newly independent state insurance agency. 


Fred Nathan, executive director of the think tank Think New Mexico, calls the insurance division revamp “addition by subtraction.”


“Many past PRC commissioners had been stuffing their political friends and cronies, frankly, into positions where you need qualified professionals like lawyers, accountants and actuaries,” Nathan tells SFR. “Now the question becomes, how do you make that organization have the necessary oversight so it functions well?”


The key task for state lawmakers will be establishing the makeup of an independent board to oversee the stand-alone insurance division. Politicians, ironically, will be tasked with trying to make the board apolitical; Marks and Nathan anticipate heated debate. 


Think New Mexico, which has been heavily involved in the PRC reform process, will lobby for the board to have an equal number of Democrats and Republicans. 


“We want to make sure we get some geographic diversity,” Nathan says. “That there’s consumer groups as well as industry equally represented.”


He anticipates that at least five PRC-related bills will come before the state Legislature in January. Lawmakers will also have to decide how, exactly, to beef up commissioner qualifications—another potentially controversial issue. 


“It’s well known nationally that we have one of the most powerful PRCs in the country, with some of the least-qualified people in there,” state House Minority Leader Tom Taylor, R-San Juan, tells SFR. “There are individuals in there that are way out of their league.” 


Taylor agrees with TNM that commissioner qualifications should go beyond education. Currently, commissioners are required to be at least 18 years old, state residents and not convicted felons. (Former commissioners Carol Sloan and Jerome Block, Jr. broke the last requirement during their tenures.) 


“The perception was we just wanted a college degree,” Jason Espinoza, a field director with TNM, tells SFR. “[But] we really want to look at a sliding scale. [Outgoing] Commissioner [Doug] Howe has a PhD in economics, [so] maybe [he] doesn’t need as much professional experience. But if you just had a high school diploma, maybe we’d want you to have 10 years of professional experience.” 


For inspiration, legislators could look to other states. Alaska, for example, requires its commissioners to have either a college degree in engineering, economics, finance, accounting, business administration or public administration—or five years of work in one of those fields. Whatever the Legislature decides will be in effect for the 2014 elections and any appointments after July 1, 2013 (the same date the insurance and corporations changes take effect). 


Marks says he hopes the Legislature doesn’t underestimate the PRC’s needed changes. He’s seen uninformed PRC decisions on this very company—Qwest—overturned by the state Supreme Court [news, June 29, 2011: “Justice Delayed”]. He deems the qualifications amendment, which voters approved with a historic 61-point margin, a message that the Legislature shouldn’t just enact something that meets the law “but doesn’t raise the bar.”

Email the author tips at joey@sfreporter.com. Follow him on twitter @JoeyPeters.

 

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