Clarify State Law Regarding Authority for Disaster Recovery of Utility Services

The Legislature should enact legislation to make it clear that the Governor and local political subdivisions have the power to establish and enforce rules and plans for restoring utility services disrupted after a disaster or emergency.

By statute, the Governor has the lead role in statewide coordination of response to disasters and emergencies. As outlined in the Texas Disaster Act, the governor is responsible for meeting dangers to the state and the public presented by disasters and disruptions caused by energy emergencies. 1~ The act created the Governor s Emergency Management Council to advise and assist the governor in all matters related to disaster preparedness, emergency services, energy emergencies and disaster recovery. One of the law s purposes is to provide an emergen cy management system embodying all aspects of pre-disaster preparedness and post-disaster response. 2~

The Legislature contemplated that the Governor would coordinate the state s response to disasters, granting the governor broad, comprehensive authority to prepare for and respond to disasters. For example, the Governor may assume control as the Commander-in-Chief of all state agencies during a disaster and can even suspend agencies statutes, rules or regulations if they hinder disaster response. The Governor may commandeer private resources and control persons movements. The law also requires a statewide disaster recovery plan and local plans by political subdivisions that must be presented to and approved by the governor. 3~

Given the importance of restoring utility service after a disaster and the importance of communications to coordinating disaster response, it is not surprising that some provisions explicitly deal with telecommunications and other utility services. 4~ The comprehensive and broad powers granted the Governor in the Texas Disaster Act include decisions regarding priorities for r estoring and providing utility service during or after a disaster. However, regardless of this clear grant of responsibilities, the telephone industry and the Public Utility Commission (PUC) recently asserted that PUC has the authority to consider telephon e company tariffs that would supersede the Governor s powers. These tariffs are part of a Federal Communications Commission (FCC) plan called the Telecommunications Service Priority (TSP) that implements a disaster recovery plan for interstate jurisdiction. This plan will in effect shift the governor s authority even in disasters that are clearly intrastate matters to PUC and FCC.

If PUC approves these tariffs, the telephone industry and the federal government will control restoration and provision of telephone service whenever a disaster occurs. TSP is designed to go into effect automatically whenever an utility outage occurs. This will apply in every case without any flexibility to adjust to specific needs. 5~

According to the telephone companies PUC pleadings, the priorities outlined under TSP will be implemented without contact with the Governor or local authorities. In other words, telephone companies must immediately and automatically restore all priority 1 circuits first, regardless of whether they are actually needed to respond to an emergency. Circuits with lower priorities must wait. Indeed, the telephone companies have indicated that even if the governor issued an order to restore specific non-TSP circuits that are essential to disaster resp onse, TSP assignments would nonetheless take precedence. Although the declaration of an emergency could move disaster control to the federal level, TSP effectively will eliminate state-level control under all disasters.

If TSP is implemented on an intrastate basis, telecommunications costs to the state and political subdivisions could rise by up to 5 percent. Under TSP, priority restoration or provision of service after an emergency requires a previously
requested and obtained TSP assignment. These assi gnments are costly under PUC-approved tariffs, with a monthly subscription charge even for essential state government functions. Subscription guarantees restoration of service at no extra charge; however, additional charges are made for new services. New s ervices often needed after an emergency will be covered by additional tariffs allowing the telephone company to charge the user a set non-negotiable rate equivalent to its cost. Should there be a dispute over the charge, FCC will make the determination of how much is due. This substantially changes the way disasters and their costs are currently settled under state control, in which telecommunications companies are allowed presentation of a claim, negotiation of disputes and trial by jury under eminent doma in principles if no agreement is reached. 6~

The federal plan is completely inconsistent with Texas law and presents many disadvantages that may impede effective response to disasters. It preempts the Governor s authority and interferes with state and local governments ability to respond to disasters. The priority scheme is rigid and must be followed under every circumstance. Situations requiring restoration for lower-priority customers or customers that do not have a TSP assignment cannot be exceptions un der TSP. Adoption of the plan on an intrastate basis through tariff approval at PUC would grant control of emergency communications to the federal government, even when there has been no declaration of a national emergency. PUC approval would suspend the e ffectiveness of Texas law regarding law enforcement agencies in emergencies, unless the specific circuit the law enforcement agency needed to have restored or provisioned was previously included in TSP program and all applicable charges were paid. 7~

The state challenged the telephone industry filing at PUC by asserting that the commission lacked jurisdiction and could not usurp the Governor s statutory authority. PUC denied the motion to dismiss. The commission intends to hold a hearing to consider the tariffs in March 1993, and any tariffs that are approved will become effective in early September 1993.

The Legislature should amend state law to make it clear that the Texas Disaster Act s delegation of authority to the Governor and local political subdivisions includes the power to establish and enforce rules and plans for the restoration and provision of utility service in a disaster or emergency.

Texas Government Code, section 418.042, should be amended with a subsection explicitly provi ding that the State Emergency Management Plan shall establish priorities for restoring utility service. Alternatively, Section 418.047 should be broadened in scope to require the Emergency Management Division to develop and recommend to the Governor rules establishing priorities for restoration and provisioning of all utility services (telephone, electric, gas and water) after an emergency or disaster. Any legislation should make it clear that the governor and local political subdivisions have the sole auth ority to establish, maintain and enforce rules and priorities, through the state and local plans, rules or local ordinances.

The recommended legislation would make it clear that the Texas Disaster Act s delegation of responsibility to plan for and respond to emergencies includes the power to establish and enforce priorities for restoring and providing utility service after a disaster or emergency.

PUC s assertion of jurisdiction over this subject matter could result in conflicting requirements, rules and procedures if it implements the tariffs proposed by the telephone companies. Withou t this legislation, utilities may claim they need not comply with an order by local authorities or the Governor (issued under the Texas Disaster Act) to establish or reestablish service on a priority basis to a given location, if that location has not been assigned a TSP priority level. Instead, the utilities could claim that they must follow their state and federal tariffs and establish or reestablish service using TSP program priorities and only to those with TSP assignments. While it is likely that utilities would attempt to meet critical state needs in a disaster, the current system could cause confusion at a time when direct, unambiguous action would be at a premium.

The recommended legislation would ensure that those closest to the scene would be able to respond appropriately to disasters and emergencies and make ad hoc decisions as to which services or locations should be restored and in what order, subje ct to any plan they have implemented under the Texas Disaster Act.

The legislation would also avoid the possibility that state and local governments will be forced to pay up to 5 percent more than they currently pay for service as a result of having to secure TSP assignments and pay recurring and non-recurring charges in the telephone company tariffs.

Fiscal Impact
The proposed tariffs require state and local governments seeking to include lines in the plan to submit a request for each circuit to the Fed eral Emergency Management Agency (FEMA) for a TSP assignment. FEMA will decide whether to grant the assignment and what priority level is appropriate. If the requestor is dissatisfied with FEMA s decision, any appeal is to the FCC. Under this approach, sta te and local government will have to conduct a rigorous inventory of all existing and contemplated services and facilities, determine which of those are necessary in a disaster situation, complete the forms and submit them to a cumbersome and time-consumin g federal review. Although it is not possible to calculate the total administrative cost associated with participating in TSP, the process will be lengthy and burdensome for a determination that is essentially a state matter.

Once a TSP assignment is made, the requestor must pay a non-recurring charge of $65 per circuit per leg and a monthly charge of $4.10. 8~ For example, an agency with 200 voice lines that determines 50 of those are essential in a disaster situation will pay $3,250 in one-time charges an d $205 per month, or $2,460 annually. Agencies that have dedicated lines with multiple drops must pay the one-time and monthly charges for each drop.

The total amount state and local government would have to pay to participate in TSP cannot be determined. The federal government has told its agencies and state and local entities to plan for a 5 percent increase in monthly telephone payments as a result o f TSP. According to data from the Comptroller s office, the state government (not the local subdivisions) spent $20.5 million annually in fiscal 1991 and 1992 for basic telephone service. 9~ A 5 percent increase to this amount would equal $1.03 million per year in higher annual payments and would only cover about 20,000 lines.

This estimate pertains only to the administrative fees for subscription to TSP. Subscription entitles the user to restoration in accordance with the user s priority level. If the user needs new lines after a disaster, which is common in a disaster, the telephone companies are allowed to assess a cost-based provisioning charge. This price, once quoted by a telecommunications company, is not negotiable, and any disputes over cost must be resolved by FCC.

In addition, TSP implies non-recurring charges estimated at $1.4 million. The Department of Information Resources estimates that the state currently uses over 260,000 basic voice lines. No estimate of the number of data lines or private voice lines is avai lable.

This legislation would avoid costs of $1 million per year in basic telephone service costs and the one-time charge of $1.4 million. The five-year cost avoidance total is estimated at $6.5 million. These estimates represent only state government lines and related costs. Local political subdivisions also would have disaster recovery responsibilities and additional costs, and 911 systems also will have to secure TSP assignments. No estimate of potential costs to local government or 911 systems can be made.

1 Tex. Gov t. Code, sec. 418.011. ch. 418 is the codification of the Texas Disaster Act of 1975, previously found in arts. 6889-6 and 6889-7 of Vernon s Civil Statutes.
2 Tex. Gov t. Code, sec. 418.002.
3 Tex. Gov t. Code, sec. 418.015-018, 418.042, and 418.047.
4 Tex. Gov t. Code, sec. 418.004.
5 See SWB proposed TSP tariff, PUC Docket 10094; GTE-SW proposed TSP tariff, PUC Docket 10109. Compare, $ 418.017, 418.018, 418.173. See also, Gov t. Code $ 411.009(d) [statutory priority level 1 for restoration of communications for law enforcement].
6 Tex. Gov t. Code, sec. 418.152-418.154.
7 Tex. Gov t. Code, sec. 411.009(d).
8 The prices listed are those proposed by Southwestern Bell (SWB) at the PUC. SWB serves more than 90 percent of the lines in Texas. GTE-SW, the second-largest intrastate company, has also filed a TSP tariff. Its proposed non-recurring charge is $14.50, and the monthly charge will be $4.90.
9 Comptroller of Public Accounts, Expenditures for Electric, Gas, Telephone Monthly and Long Distance and Water during Fiscal Years 1991 and 1992, Austin, Texas, November 13, 1992. (computer printout).