Electricity deregulation could tip scales in PSC contest

The last edition of this space criticized politicians who should know better in attempting to insert more government into electric power regulation in Louisiana. Perhaps the upcoming Public Service Commission contest will present an opportunity for a winning candidate to embrace the winning issue of less government intrusion.

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.

Vitter ignorant to think more govt solves power problems

Politicians who know better have thrown their support behind a statist scheme that will make matters worse regarding power provision in emergencies, when the solution to reduce the incidence of post-emergency problems lies in the opposite direction.

Sen. David Vitter, joined by Jefferson Parish President John Young, ask state government to set in motion constitutional changes to allow any of a private company, private/public partnership, or government to take over forcibly a utility deemed to be underperforming. Incredibly, they argue it “would inject real competitive pressure” into power provision.

Let’s see if we have this straight: according to these guys, government’s bringing its power to bear to achieve an outcome it desires by fiat, where the decision-making doesn’t have to have anything to do with customer service but instead may be captive to fulfilling dozens of allied (on this issue) different special interest agendas for dozens of different reasons, is what defines “competition?” There’s zero guarantee that this action of stripping a company of its assets, even at fair market value, would not reflect a hidden agenda driven by political considerations.

Budget problems present more reform chances for Jindal

Veteran political observer John Maginnis wonders whether Gov. Bobby Jindal wants to set up the Legislature for something. Maybe so, but perhaps not in the way he imagines.

As state budgetary pressures continue, the Jindal Administration has had to start pruning state spending, to the consternation of legislators who are prone to taking more seriously than deserved interests with outsized influence complaining about unanticipated cuts to, if not closures of, colleges, state hospitals, indigent health care, and prisons. Maginnis speculates that the situation created allows Jindal to have his cake and eat it, too, with the cuts encouraging legislators to revisit tax exemptions next session that he has promised to veto changes to and go around him. Already a special panel is meeting to review the exemptions.

Constitutionally, to repeal an exemption requires a two-thirds majority in each chamber, a difficult standard to achieve. But Maginnis argues the Legislature could suspend an exemption with a majority vote, because the Constitution allows suspension by the same vote required for enactment, which in the case of any law that reduces taxes requires only a simple majority (those that serve to increase them requires two-thirds votes). Further, this could work for an extended period of time, as the Constitution permits the suspension of a law to last as many as 60 days past the end of the next regular session – if done next year, as late/long as early August, 2014. With governors unable to veto concurrent resolutions like this, theoretically Jindal could try to goad legislators into going for it, criticize the move, and then budget the extra dollars with them, keeping his anti-tax increase credentials spotless while getting budgetary breathing room.

LA papers to lose more relevance unless reducing slant

The beginning of this week marks the grand experiment of making New Orleans a two-newspaper town again, as its longtime occupant at the end of the week will defer from publishing every day with an outsider starting to publish daily. Regardless of what happens, those interested in state and local politics likely will end up better off, one way or the other.

The owners of the New Orleans Times-Picayune earlier this year decided to go to a thrice-weekly print publication schedule and to concentrate on online delivery. The privately-held firm has stated cost considerations as the factor in an industry that has shown dramatic contraction as digital delivery makes an inexorable march to becoming the medium of choice. Already, a sister publication, the Ann Arbor (MI) News, has gone completely digital, and other outlets in the chain are making a similar transition as is the T-P.

This decision prompted the Baton Rouge Advocate to announce a foray into publishing daily in New Orleans, although with a barebones operation that would cover only news and some sports. This may appear audacious in a market where the dominant market leader, in one of the highest-penetration newspaper consumption areas in the country, asserts it cannot stay in business in the long run with daily printing. Why that’s the case The Advocate’s bigwigs need to understand if they don’t want the black ink used in publishing to be overwhelmed by the red ink from financial losses.

Sue recall scofflaws to protect society, rule of law

Usually, you have to punch bullies in the nose to stop their behavior. The Louisiana state electorate and some smaller parts of it did so to anti-reformers concerning education, but now parties interested in disclosure must step up and really drive the lesson home.

As noted previously, a handful of school employees invested in the current underperforming system got up recall petitions against Gov. Bobby Jindal and several state legislators, the due date for Jindal’s and at least some of the others expired last week with the expected failure of the efforts, sending a reminder that these defenders of the status quo have lost in the marketplace of ideas. In fact, despite much bragging and boasting about how there was such a groundswell of opposition to the politicians based upon their support of education reform and a number of publicized events designed to collect signatures, in all likelihood hardly any were gathered.

But the public can’t confirm this because the organizers continue to flout state law concerning the process. It’s very clear on this: the organization’s chairwoman must produce signatures within three days upon request, unless already filed with the secretary of state when he must do it. However, the organizers, citing some phantom fear of “retribution,” refuse to follow the law and plan to hold onto the petitions, raising the possibility that they will try illegally to recycle them in a future effort against Jindal or the lawmakers.

Free speech opposition to rule errs factually, logically

Even this space will make a mistake once in a blue moon, and that even the best sometimes do so should be kept in mind when evaluating the incorrect rationale by which the normally-incisive Institute for Justice tries to oppose regulation by New Orleans regarding licensing of tour guides.

For many years the city has required licensing of tour guides, an ordinance spottily if ever enforced until very recently. The city maintains the rules, which include passing a knowledge exam administered by the New Orleans Tourist and Convention Commission, completing satisfactorily a criminal background check, requiring a fee, and wearing of a badge, designed to ensure the safety of and provide high quality service to those contracting for a guided tour for hire. Some guides declare the rules intrusive and a restraint of trade, but local governments through powers granted to the states by the U.S. Constitution have the power to regulate in this area.

However, the Institute argues differently in its donated defense of a few guides challenging the ordinance, arguing that this constitutes a freedom of speech question. They don’t want to submit to the background checks, which they don’t see as reasonable especially as they have to pay for these in addition to the license fee, and the Institute argues that the marketplace will sort out whether the public will pay for guides that don’t seem to be worth it. Hence, in this view the city has no compelling argument to override free speech concerns, where government may restrict in this instance only when the health and safety of the public could be threatened.

Tantrums don't change facts of need for closing, reform

Feel better now, after the three-hour tantrum about the closing of the Southeast State Hospital? Feel better now, after the six-month tantrum about education reform? I hope so, because neither changes the fact of the rectitude both of the closure and reform.

If modern liberalism were in charge in most respects of public policy-making in Louisiana, these actions of a meeting to protest the closure and of a recall petition directed at Gov. Bobby Jindal would resonate perfectly with that ideology’s dependence upon emotion and assertion of feelings to formulate policy, with inconvenient facts shoved aside in a blizzard of illogic. But it isn’t, and the facts remain.

Louisiana as a state, both in terms of public and private mental health beds per capita, is in the top quarter of states, and plenty of beds exist in the Regions 1 and 9 that had been served by the hospital. Some family members will have to travel longer distances to visit patients, but it’s not the state’s job to give them curb service, only to do the best it can (often for free) to treat the afflicted. Many families and patients also have the option of private and non-profit providers in the area.

Closings teach privatization loaf better than none at all

Facing fiscal pressure and changing demographics, the Gov. Bobby Jindal Administration went for Plan B concerning correctional institutions, probably leading a number of state and local policy-makers bemoaning that they got what they wished for.

This past legislation session, and in the previous one, Jindal had budgeted to privatize some state prisons beyond the two already permitted in state law, as well as this past session planned to close two others. As occurred the year before, no further privatization occurred, but the closures happened despite an attempt to make an end run around Jindal’s authority on the matter.

Apparently, the numbers indicated that this was not enough, so last week the Administration announced the closure in two months of the C. Paul Phelps facility in southwestern Louisiana that would save an estimated $12 million a year. Demographic and local capacity trends such as they are, that space has turned surplus. Naturally, the decision left some state legislators and city officials whining about how a few local residents will lose jobs and a few businesses will lose subsidized inmate labor.

Hypocrite moans when others may get taxpayer largesse

It seems for some being at the public trough is not enough. They also have to act as hypocrites when it appears others may be trying to push their snouts into the mix.

Complaints arose from one Louisiana film studio boss when he discovered that the National Aeronautics and Space Administration was renting out part of its Michoud Assembly Center for use as a film studio. Patrick Mulhearn of Raleigh Studios claims that the federal government, which is required to recover costs when possible on facilities, set rental rates for another studio to use its unused space at below-market rates, which would violate federal rules. NASA says it does not and no demand in the aerospace area means the space would not get used for the general purpose of the facility.

Raleigh uses space at Baton Rouge’s Celtic Media Centre, leading Mulhearn to whine, “All I've been given is hearsay from producers who tell me that our rates are more expensive than theirs. The taxpayers didn't fund [Michoud] to make movies. … I know that [Celtic’s owners] never would have built this facility if they knew they were going to have to compete with NASA.”

LA Third District tilt hinges on differing GOP strategies

As usual in these kinds of cases, the reason for the intensity of Louisiana’s Third House District contest between U.S. Reps. Charles Boustany and Jeff Landry is because they are so similar on the issues – which produces an opportunity actually to dissect and discuss the issues.

Trying for his fifth term, Boustany, from an old-line political family in Lafayette, got matched with freshman Landry, with a much newer political pedigree, because of redistricting brought about by Louisiana’s failure to grow much in population in the last decade. Both being Republicans in an area that has evolved into a solidly conservative national electoral district, one will win.

Certainly they differ in style. Boustany takes a measured approach that focuses more on the deal-making aspect, while Landry forcefully articulates issue preferences that highlight policy and where preferences differ among representatives. To oversimplify, they pose the “insider” vs. the “maverick,” and provide contrast on the eternal political question of democratic rule of whether meaningful policy gains can come given the costs of compromise in their achievement.