Last old PSC gasp foists rate hike, crony capitalism

Perhaps the Louisiana Public Service Commission will be the last unreformed elected statewide government institution the citizens will have to endure, as outgoing Commissioner Jimmy Field demonstrated with his goodbye kiss to corporate and special interest cronies.

Field, who did not run for reelection and will be replaced by Scott Angelle next year, as his final vote in a 16-year career joined Commissioners Foster Campbell and Lambert Boissiere in puckering up through hiking the rates of anybody who buys electric power outside of Orleans Parish except for the largest manufacturers, even those of the most impoverished households. Commissioners Clyde Holloway and Eric Skrmetta opposed, and even tried at a previous session to get residential households exempted from the final regulation, but were thwarted by the other three.

The increase goes to subsidizing firms that sell equipment designed to increase energy efficiency, through a tax rebate to ratepayers who contract for those services. Eventually, a mechanism would be created to allow power sellers to recoup lost revenues from the hike, estimated to be in the range of 50 cents a monthly bill for the typical household. Only a vague outline of this program named “Quick Start” has surfaced and was approved last PSC meeting, despite it having been introduced more than three years ago, and it may be another two years before the specific details are worked out. At this time, it is estimated to cost ratepayers $25-30 million annually.

Six bucks a year is not a whole lot (although none of the three who voted for the hike are hurting financially, according to their 2010 financial disclosure forms; none have turned in a complete 2011 form which was due in May), but the larger principle is that this is the people’s money first and foremost and government should have no claim on it to transfer it to some ideologically favored program. A program, in fact, that will do little if anything as far as affecting energy consumption goes except to help line the pockets of a favored few.

Similar kinds of programs in Arkansas and Orleans, where power is provided by Entergy that also provides much to the rest of Louisiana, show about a one percent savings of energy used. The theory here is the program reduces overall use and delays the need for increased generating capacity, which eventually ratepayers finance. But the history shows even in the long run it is a pittance, counterbalanced by the cost to society of government taking more, in favoring certain interests, and in expending the resources put into creating and maintaining the regulatory apparatus.

So what’s wrong with giving citizens choice in the use of their property instead of using confiscation to steer them towards an ideologically-acceptable behavior? The market will signal correctly to households whether they want to pay more now for efficiency in the hopes of saving more later. What’s so intrinsically good about slightly less power being generated? If energy efficient practices are the way to go, people will choose them compared to alternative uses of those funds, which the market would direct to more efficient uses of them absent the PSC’s intervention.

But intervene it has, meaning more wasteful use of these monetary resources than could be determined by the market, to the benefit of a few financially and ideologically. And thus good riddance to Field, who showed perhaps his replacing was long overdue by the casting of this vote.