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Work, not show, horse mode best for LPSC

Maybe the Louisiana Public Service Commission, especially its more vocal members, will start acting more as work horses instead of show horses on director compensation and related matters for the state’s rural electric cooperatives.

A couple of months ago, the PSC attracted attention when its members launched criticism of such practices. They complained about supposedly high salaries and compensation for key employees but, more controversially, excessive remuneration paid to directors. Each of the 11 chartered coops must have members appoint a board of directors to oversee management.

A few PSC members fulminated about this, questioning whether pay, travel expenses, and benefits like health insurance for part-time board members were excessive, and ordered the coops to provide that kind of information. Members wished to review such documents for consideration in setting future rates of these utilities that it regulates.

But some became upset because the information came under court seal, meaning the PSC can’t release it to the public. The coops pointed out that they legally and reasonably could do this, as it contains proprietary information that potential competitors could use.

Predictably, north Louisiana’s Foster Campbell split a gut over this. “That really makes me sick” he vented a few days before the PSC’s monthly meeting last week. “How come they don’t want to tell their members how much they pay their people? I don’t like the way that smells.”

At that meeting, at Campbell’s behest the PSC began a process of regulatory reform that would produce more open election of directors, term limits, and restrictions on compensation. Over the next several months, its staff will draw up new regulations that increase transparency and decrease incentives for boards to assign themselves outsized compensation, whether directly.

And some figures do provoke closer scrutiny. Using 2016 data for ten coops, the hourly compensation figures they reported for directors ranged from just under $33 an hour to a whopping over $238.

Yet none of this was a mystery. As nonprofits, each coop must file an Internal Revenue Service Form 990 annually, which in part requires financial information including compensation for board members and key employees. This legally is a public record, and several aggregators collect this online for free. Guidestar, for example, posts the forms of four, three, and two years ago (but not the past year’s, which it and other information it sells).

In about an hour looking through these and the websites of the coops, I gathered some key information about the 11, such that to compute as the hourly rate. Admittedly, the information has some gaps; it doesn’t contain meter or member numbers, it only asks for key employee information for those paid more than $100,000 that year, it may omit former directors who receive less than $1,000, and the number of hours a week may overlap, understating the numbers above.

Still, it has enough to draw conclusions about pay levels. So, when the likes of Campbell rant and rave about alleged secrecy, that’s more a reflection of their past inattentiveness than of any nefarious activities of coop boards: they have been making this information public for decades, and long ago experienced commissioners like Campbell who have served on the PSC for multiple terms could have had the wit to have reviewed those data and started this process.

(Well, there is Concordia Electric, which not only failed to file its 2016 report, but on its 2015 report failed to indicate the number of hours per week each director spent on coop business. However, it also racked up the lowest total director compensation in 2015 and was second-lowest in terms of such dollars spent per meter.)

Commissioners should skip trying to make themselves look like ratepayer guardians now when they actually could have been them years ago. But, better late than never.

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