In the past, there might have been a case for close scrutiny of government
in all aspects of this historically vertically integrated industry where
generation, transmission, and distribution were performed by single firms in
geographical areas where any competition faced tremendous entry costs. But the
monopolistic environment, thanks to technological advances, has become softened
at least on the distribution end, and to some degree on the generation side.
Now, as long as a concern isn’t too far away from transmission lines to one of the
three American power grids, as distribution becomes more and more deregulated in
allowing customers to choose which supplier provides power, there is greater incentive
to create generation capacity and plug it in, increasing choice further.
Unfortunately, Louisiana has yet to ride this wave of the future, until
recently having just a handful of firms, dominated by Entergy, generate,
transmit, and distribute power (although they have been able to buy and sell
power on a wholesale basis) as the only provider in varying geographical
regions. However, the first step to changing this occurred a few months ago
when the PSC authorized Entergy to join the Midwest
Independent Transmission System Operator Inc, with the specifics to be
worked out over the next few months. This consortium governs power transmission
in 13 states. Thus, the new member for the PSC from the open District 2 seat
that will be elected no later than Dec. 8 will participate in some big
decisions right off the bat.
By eventually passing over management, if not ownership, of its
transmission lines, Entergy can sell its power at retail throughout the
existing network (as well as save on those management costs and reap a one-time
bonus for their sale). It also means that suppliers from the other parts of the
network could do the same in Louisiana. While the young history of deregulation
of power has had its ups and down the market, with technological changes,
greater consumer awareness, and a recognition that absence of market control
made it easier to cost shift for political purposes, eventually deregulation
will bring lower costs for attentive consumers.
This landscape of change may develop into a defining issue of this
campaign, pitting
several candidates among which two Republicans appear to be the favorites
with a Democrat spoiler, both of which may have higher ambitions on the future.
State Rep. Erich Ponti got a look to
serve as Speaker of the House , while former Department of Natural Resources
Secretary Scott Angelle, now on the Louisiana State University System Board of
Supervisors, served as interim lieutenant governor. Both in aggregate are
conservative across a wide range of public policy issues.
But neither really has distinguished himself from the other on issues
specific to the PSC. The ability to do so in a way that pleases the electorate
especially is crucial to one’s chance of winning because of the Democrat in the
contest, Forrest Wright, a utility consultant. While Wright doesn’t seem to be
mounting much of a campaign, his background makes him credible and as the only
Democrat in the contest he stands a good chance of picking up a lot of votes in a
low-information/stimulus contest like this from Democrats reflexively voting by
party, potentially enough to knock out one of the major GOP candidates in the
general election.
The key to making the runoff with Wright and then almost certainly win,
or maybe to win it if both Republicans advance, could be having a signature
issue such as distribution deregulation, by enabling that candidate to
differentiate himself from the other main competitor. By promising to pursue
this issue and to lead the charge in getting the legal environment changed to
allow for electricity sales compensation, this kind of candidate would stand
out and give the conservative district a reason to choose that one.
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