25 price rather than risk another decade of public outcry over major decisions being forced down the throat of large and vocal segments of the society. The concept of the need to avoid tyranny of the majority is still valid today. Third, any process which attempts to substitute the present guaranteed adjudicatory rights for some form of hybrid rights where discovery and cross-examination are available if they are "best procedures" for the particular case is inherently unfair and unworkable. This kind of uncertainty and case-by-case determination in an analogous situation prompted the Supreme Court to conclude (Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435 U.S. 519 (slip op. at 24) (1978): if courts continually review agency Of course, where the statute establishes specific criteria to achieve the "best' procedures", judicial review to see if those requirements have been met is inevitable. There is no reason for this massive overhaul. If adjudicatory procedures are being misused, a party can and should seek an order of the hearing examiner denying further discovery or cross-examination. But in order to obtain this relief, the party seeking to limit public participation must 26 prove that there is no need for it. Hybrid hearings shift the burden of such proof to the party who wishes to use the procedures. This will inherently disadvantage citizen participants who, even with financial assistance, will need to rely on discovery and cross-examinatiwn to develop their case more than the private industry party. In addition, hybrid hearings create many hearings to replace one: First a legislative-type hearing. Then a hearing on whether to hold an adjudicatory hearing. Then an adjudicatory hearing. Experience with the Nuclear Regulatory Commission in using such hybrid hearings confirms that the hybrid hearing will take longer than the adjudicatory hearing. For instance, adjudicatory hearings on the adequacy of the Emergency Core Cooling System for reactors in the early 1970s lasted less than two years. Similarly complex hearings on plutonium reprocessing which used the hybrid hearing format had consumed over 15 months when they were suspended, and the legislative hearing phase had not even been completed. There are of course numerous adjudicatory hearings which could be run better. But the flaw is not in the process but in its implementation. Hearing boards which do not exercise the discretion given them under the Administrative Procedure Act and agency rules to operate hearings well will not perform better with hybrid or legislative hearings. What is needed is better training and better quality in the hearings boards, not a whole new set of complex hearing procedures for which years of agency and judicial interpretation 27 will be required. Nothing would serve the public interest less, delay decision-making more, and fully employ the the hearing procedures for administrative agencies. We thank the Committee for this opportunity to appear and welcome any questions. Senator LEVIN. I, inadvertenly, bypassed Mr. Rader. TESTIMONY OF FRANK K. RADER, REPRESENTING INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA AND AMERICAN GAS ASSOCIATION, WASHINGTON, D.C., ACCOMPANIED BY RICHARD A. ROSAN, CONSULTANT TO AMERICAN GAS ASSOCIATION Mr. RADER. That is all right, sir. My name is Frank Rader and I appear here today on behalf of the Interstate Natural Gas Association and the American Gas Association. I have with me special counsel to AGA, Mr. Richard Rosan. Mr. Rosan and I have both served over a number of years on regulatory reform matters, particularly in the energy field and currently are members of the Advisory Committee to FERC on revision of rules of practice and procedure. The membership of INGAA and AGA represents virtually all of the interstate pipelines and most of the distribution companies in America. In confining my remarks to 5 minutes, I clearly as others cannot discuss in detail the rather complex issues, many of the complex issues involved in the proposed legislation. I will, in the interest of saving time, confine my remarks to more important matters at this particular juncture. The other aspects I have in the filed statement and I request that they be incorporated into the record. The natural gas industry is one of the most comprehensively regulated industries in the Nation. Aside from the social regulation enacted in recent years such as the National Environmental Policy Act, the Clean Water and Clean Air Acts, the Occupational Safety and Health Administration Act, we do have economic regulation and have existed under economic regulation for practically our entire history. Thus the gas industry does have a role and a deep interest in the regulatory process. I feel that it is important that everyone recognize that there is in fact a need for regulatory reform. It is imperative that this Nation find ways to expedite regulatory reform and smooth the path for the development of energy which is so badly needed by this Nation today. In a recent filing by the President on May 7, 1979, the President estimates that this country's consumption of energy will grow from about 78 quadrillion Btu's to around 98 quadrillion Btu's by the year 1990. If the current regulatory practice is followed, we are never going to get there and we do need to get there if this Nation is to continue to be the great nation it has been in the past. I don't know at this point under the regulatory process that presently exists how we are going to get there. But I think it is healthy that the Congress and the consuming public recognize that there is a need for regulatory reform. Unfortunately, in our opinion, neither S. 262 nor S. 755 provide the urgently needed regulatory reform. It is an omnibus type of legislation, The omnibus-type of legislation embodied in these bills will not correct the regulatory delays, in our opinion. In our view, except for title I provisions with respect to initial regulatory analysis, the balance of the bills will probably compound existing regulatory problems. They will add more bureaucracy to the regulatory process and thus more costs, and the delays just simply cannot be permitted. We feel that these two bills should be modified in certain respects and that instead of the omnibus legislation, we suggest and urge the following things be done. That legislation should authorize the President or his designee to identify significant energy projects and any project so designated would get priority, would be put on a fast track and all regulatory and judicial actions either approving or denying the project, bearing in mind the need for due process for all parties of interest, must be completed within a fixed period of time. Second, Congress should either through oversight hearings or individual agency review proceedings, investigate the operation of each regulatory agency and promptly tailor the necessary reform legislation to that particular problem of that particular agency. There are undoubtedly common problems in all agencies but first, there should be a direct specific rifle approach to the correction of the ills of each of the agencies rather than an omnibus approach. Specifically, as to S. 262 and S. 755, I have several points. As noted in detail in our comments, the definition of rule in title I must be modified. It is too broad and it would encompass too many problems. We are opposed to the changes as they relate to the administrative law judges. The limited tenure provision would reduce the law judges' independence and probably reduce the quality of the law judges. Third, we are strongly opposed to the expanded subpena power. This is not regulatory reform. It places unwarranted power in the hands of agency personnel. Fourth, we are opposed to the concept of employee review boards and, finally, by reconstituting the administrative conference, we would simply create another unnecessary layer of regulations. Thank you, very much. [The prepared statement of Mr. Rader follows:] BEFORE THE SENATE GOVERNMENTAL AFFAIRS COMMITTEE ON BEHALF OF THE INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA RE S. 262 AND S. 755 My name is Frank K. Rader. I am Vice Chairman of the Board of Texas Gas Transmission Corporation, Owensboro, Kentucky. I am here today on behalf of the Interstate Natural Gas Association of America (INGAA) and the American Gas Association (A.G.A.). I am currently serving as Vice Chairman of the Board of INGAA and a member of the Governmental Relations Committee of A.G.A. Accompanying me is Richard A. Rosan, Special Counsel to A.G.A. and Chairman of the Joint A.G.A./INGAA Task Force on Regulatory Reform. Mr. Rosan and I are also members of the Federal Energy Regulatory Commission's (FERC) Advisory Committee on Revision of Rules of Practice and Procedure. The membership of these Associations is composed of virtually all the major interstate gas transmission companies and most gas distribution companies. On behalf of the natural gas industry, may I express our appreciation for an opportunity to comment on the legislation embodied in the Chairman's bill S. 262 and the Administration's bill S. 755. The natural gas industry is one of the most comprehensively regulated industries in the Nation. Aside from the social regulation enacted in recent years, such as the National Environmental Policy Act, the Clean Water and Clean Air Acts, the Occupational Safety and Health Administration Act, and similar acts, with which the natural gas industry like all other American businesses and industries must comply, our industry is subject to detailed economic regulation, as to entry, licensing of facilities and service and rate regulation and also as to pipeline safety. Thus, the gas industry has a real and deep interest in the regulatory process. |