Oct. 9, 2007 — The Public Services Commission moved Tuesday on St. Thomas to take a hands-off approach toward Innovative Communications Company’s bankruptcy proceedings — for now — and rescinded two related PSC orders.
“I move we withdraw from the bankruptcy proceedings until such a time as a purchaser has been identified and they come before us,” Commissioner Thomas Jackson said, continuing on to specify the orders he wanted rescinded.
The first order, No. 13/2007, signed Feb. 26, asserted the power of the PSC to prevent transfer of control over any regulated utility or any parent company of any regulated utility, no matter how indirect or tenuous the control or who was ordering the change. More specifically, it barred court appointed trustee Stan Springel from taking control of ICC and barred company executives from cooperating with Springel on the grounds that these actions required prior PSC approval.
V.I. law says the PSC must give prior approval for any change in control of a regulated utility. Whether that provision applies to control of parent companies, or gives the local PSC power over the actions of federal courts, has been in dispute. (See "Moorhead Orders Companies Not to Cooperate with Prosser Bankruptcy Trustee.")
The second rescinded PSC order: No. 14/2007, signed on March 1, appointed attorney Jeffrey Moorhead as a hearing examiner, putting him in charge of issues relating to any potential change of control of ICC.
In that capacity ,Moorhead issued two additional contentious orders which reassert the PSC order of Feb. 26.
In both cases, Moorhead’s orders came shortly after U.S. Bankruptcy Judge Judith Fitzgerald first granted Springel broad control over ICC and again after she reiterated and clarified those broad powers.
Moorhead’s two orders led Springel to ask for Moorhead to be held in contempt of court. (See "Brief Calls for PSC's Moorhead to be Cited for Contempt of Court.")
Tuesday’s special meeting was called at the behest of Attorney General Vincent Frazer. Frazer recently appointed attorney George Phillips to represent the PSC’s interests in ICC’s bankruptcy proceedings. (See "Attorney General Dismisses Moorhead as PSC Lawyer.")
During the opening hearing on contempt charges against Moorhead on Oct. 2, Phillips told U.S. Bankruptcy Court Judge Judith Fitzgerald that the PSC would be meeting Oct. 9 to amend or rescind the order of Feb. 26.
(See "Moorhead Gets More Time in Contempt of Court Charge.")
The PSC briefly discussed a proposed protocol sent by Springel for how the PSC and the trustee should communicate. “We just got the recommendation from the trustee,” Commissioner Verne C. David said. “It was just presented to us and I personally am not prepared to move forward and act.”
Other commissioners said they would also need time to familiarize themselves with the proposed protocol. Action on the protocol was tabled for the time being. Commissioner Joseph Boschulte suggested meeting soon with Springel to directly discuss it. “It behooves this commission to talk with the trustee about the recommended protocol,” Boschulte said. “I believe we need to meet with the trustee to talk about the implications of Chapter 11 or Chapter 7 proceedings on the territory’s consumers, and we need to have the conversation really, really soon.
“Whether we table this issue or not, we need to have some sort of communication from us to the trustee saying we would like to have a meeting to discuss how his actions have an impact on the PSC.”
PSC Chairwoman Alecia Wells said she would begin making plans. She suggested the first week in November as a plausible time frame. “We want notice very early so we can all plan to be there,” she said.
Boschulte asked Wells if it were possible to make the meeting earlier. “I think we should meet sooner, ideally, but I realize it has to be when people can meet,” Boschulte said. “I would hate to push this back for 21 or 30 or 35 days when the sense of urgency is on the table to meet sooner.”
Wells said early November was open on the PSC calendar, but she would check more deeply into it and get back to everyone about possible earlier dates.
“I am going to meet with attorney (Tanisha) Bailey-Roka and we are going to try to get a letter crafted setting some dates for the trustee and await his response on which dates work better for him,” Wells said.
Two prior scheduled meetings were canceled at the last minute. The PSC has not met with Springel since he was appointed in February. (See "PSC Cancels Another Meeting with Trustee in Prosser Bankruptcy Case.")
In other business, the PSC approved annual assessments and docket-specific assessments on the utilities they regulate. Annual assessments are levied upon each utility’s revenue stream. Docket-specific assessments are made to pay for PSC expenses incurred in the course of addressing specific issues on the PSC’s docket relating to a particular utility.
The docket specific assessments for the past fiscal year totaled $495,000. Moorhead’s fees for his services as hearing examiner compose $470,000 of that total.
Boschulte asked Bailey-Roka if there was a detailed breakdown of the costs that he could examine.
“We have the consultant’s (Moorhead) monthly billing details, yes,” Bailey-Roka said.
Vitelco’s business-office director Mickey Breton appeared at the hearing to testify about Vitelco’s annual hurricane-preparedness report. As the only Vitelco or ICC representative present, she received some sharp questioning about the report and about why Vitelco President David Sharp was not present to testify.
Breton said Sharp was caught out of the territory on a previously arranged trip because of the short notice given for Tuesday’s hearing.
“I am very concerned that we meet with company officials,” Boschulte said. “The parent company is in bankruptcy and we don’t have representation from the company to say how it will impact the community, not only regarding hurricane preparedness. We read about what is happening in the papers, and we want to hear from the company to see what is really happening.
“That there is no representative here who can answer these questions I feel is very disrespectful to the commission.” Boschulte said.
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