When the big gas and power companies bring in their stacks of charts and figures and ask to be allowed to charge customers more money, the Maryland Public Service Commission generally gives the charts and figures only "cursory' study, according to a report from the state legislative auditor.
The report, a year in the making, strongly criticizes the commission for failing to fully examine the books of the public utilities it regulates and for neglecting to evaluate the utilities' overall efficiency before granting rate increases.
Commission chairman Thomas J. Hatem, admitting that more and better-trained personnel are needed, rejected the audit report as "subjective" and said his commission's work has stood up to a decade of court challenges.
"We are gratified that the audit did not disclose any deficiencies that warrant mention in our internal accounting and record-keeping," Hatem pointed out. "It's just about the first one I've ever seen like that.
Signed by legislative auditor Pierce J. Lambdin, the report also criticized the people's counsel, John Keane, for the 35 mile distance between his office and his staff. The people's counsel represents consumer interests before the commission.
"Such an unorthodox working condition materially weakens the counsel's administrative control over day-to-day operators and costs too much, the report said.
Keane responded that he spend s no state money on personal travel and runs the people's counsel office from its Baltimore staff headquarters. He noted that the office has been full time only since March 1976 and has inadequate office space.
Discussing the agency's performance Lambdin wrote, "financial data that is submitted to the commission by the utility companies to illustrate the need for proposed rate increases is not subjected to adequate verification by the commission," Field audits aimed at checking the financial data "were of a cursory nature at best and did not cover major components of utility financial exhibits," the report continued.
Still, it added, most of the talk at a rate increase hearing is about the charts and figures. "Little attention is focused on the efficiency of the utility's operation. Emphasis is placed upon the data presented by the utility rather than the underlying reasons therefore."
The audit report recommended that the commission hire private consultants to help conduct efficiency studies and private accountants to go over the books of the companies. It alos called for a review of the commission's pernnel structure.
Hatem, who has chaired the five-member commission since July 1976, said in a formal reply to the state comptroller that the auditing deficiency charges were "erroneous."
"Commission auditors do not make an audit to verify a utility's presentation but . . . make their own independent presentations based on and prepared form the books of record and their source," the reply said. The people's counsel, consume groups and any other parties to the case also provide their own documents, Hatem added.
"What's cursory to one person who doesn't know what's required wouldn't be cursory to one who understands that," he said in an interview.
The commission has asked state funding for two more auditors, Hatem went on, but noted that the low salary level makes it hard to attract highly qualified persons.
He added that Maryland has required efficiency reports on utilities since 1972, was the first state to do so, and has spent $2.5 million for such ports. Accountants and consultants have been used to provide audits and efficiency evaluations in the past, he said, "but frankly they're very expensive and take some time . . . it's not something you want a blanket statement that you will or you won't do it from now on."