Haslam Ready to Tinker With TRA Again?

(Note: This is a column written for the Knoxville Business Journal, also appearling HERE.)Perhaps the third time will be the charm for Gov. Bill Haslam in his dealings with the Tennessee Regulatory Authority, now that he has results from a ‘top-to-bottom review’ of the agency created as one of former Gov. Don Sundquist’s most-heralded accomplishments.
The TRA’s functions have been reduced considerably since 15 years ago, when it regulated the trucking industry and set rates for telephone customers. Those functions are gone.
But it still has significant duties, ranging from refereeing disputes within the telecommunications industry to oversight of sewer systems in subdivisions. And it still sets significant utility rates, an example being the privately-owned monopoly water company that serves Chattanooga.
Sundquist succeeded in his first legislative session abolishing what his office’s news releases always labeled ‘the scandal-plagued Public Service Commission,’ which in 1995 was headed by three Democrats elected by statewide popular vote. He got a couple of key Democrats — including now-Congressman Steve Cohen — to go along with the then-Republican minority to kill the PSC and replace it with the TRA.
Haslam, in his first legislative session this year, made two attempts to tinker with the TRA. Both fizzled.

In the first, Haslam had introduced — as one of the few bills deemed administration priorities — legislation that would have eliminated one of the four current $150,000-per-year director positions on the panel. The bill never went anywhere.
In the second, he nominated Memphis management consultant Andre Fowlkes to serve as one of the four directors. That flopped, too, after Republicans learned that Fowlkes was a Democrat — albeit one who supported Haslam in the 2010 gubernatorial campaign.
The terms of two of TRA’s directors officially expired on July 1. Eddie Roberson resigned effective Oct. 1. Mary Freeman apparently will continue serving, which allows the panel to continue making decisions until a successor is named and/or Haslam’s next attempt at a TRA overhaul is enacted.
The governor, the House speaker and the Senate speaker appoint one director each under current roles. The fourth director, under a quirky process created during Sundquist’s second term, is jointly chosen by the governor and the two speakers.
Roberson held a gubernatorial appointment seat; Freeman the consensus seat. The House speaker seat is held by Sara Kyle, who had been elected to PSC and was reappointed to a six-year term by former Democratic House Speaker Jimmy Naifeh shortly before Republicans took over the House. Director Kenneth Hill was appointed by Senate Speaker Ron Ramsey.
Kyle and Hill both have family ties to the Legislature. Kyle’s husband is Senate Minority Leader Jim Kyle, D-Memphis. Hill’s son is state Rep. Matthew Hill, R-Jonesborough.
Haslam has mused that perhaps the TRA ought to be simply abolished and its utility oversight functions assigned to the executive branch. It is likely that some lawmakers would object, as that would lessen legislative power and enhance gubernatorial strength, and the governor has shown no enthusiasm for legislative battles.
Nobody yet is proposing a return to the elected directors — even though there is periodic lamenting that Tennesseans get to elect no statewide officeholder except the governor. Republicans regularly call for election of the state attorney general. Some Democrats, now that their party is in the minority, urge popular election of constitutional officers and the lieutenant governor — just as Republicans did when they were in the minority.
But no champion of electing TRA directors has emerged.
Stripping the TRA of its independent status would raise the specter of decisions being subject to a governor’s political wishes. Electing the regulators could give rise to influence from political contributions, which accounted for some of the scandals associated with PSC.
The governor this summer assigned Mark Cate, his senior adviser, and Herbert Slatery, his legal counsel, to interview TRA directors, present and former, as well as stakeholders to recommend what should be done — if anything.
It would seem that doing nothing — except appointing people to fill the vacated positions — would be a viable option.
Roberson, 58, who spent more than 30 years with the PSC and TRA as a staff member and director, observed in a recent interview that the agencies got along fine with just three directors for more than 100 years.
So there’s nothing wrong with Haslam’s original idea of eliminating one director. And that may serve as a basis for his next attempt, though the administration is close-mouthed about its thinking at the moment.
Roberson also says at least one structural change should be made. Current law dictates that the chairmanship rotates every year and gives the chairman authority to hire and fire staff. ‘When staff doesn’t know what leadership is going to be from one year to the next, it creates instability and an air of uncertainty that is really not good for professionals,’ he says.
Sundquist used to say he wanted to eliminate political interference in utility regulation. It seems politicking is still afoot at the TRA, though inclined to the internal variety with overtones in the Legislature and the governor’s office.
A top-to-bottom review just might determine that elimination of a director, as Haslam originally proposed, and some structural tinkering as Roberson suggests, could result in an updated and improved agency. And that the basic Sundquist idea was right.

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