Political Horizons for Sunday, Sept. 2, 2012
Isaac highlights PSC role
The soundtrack of storms for many Baton Rouge residents is not the generator-like drone of Gov. Bobby Jindal reading statistics a couple of times a day; it’s the drone of actual generators throughout the night.
Many Capital area residents again were lucky enough to avoid the life-and-death drama that continues being played out this weekend to the south and east of Baton Rouge. Instead, major storms are measured more often by the number of days without air conditioning and the amount frozen food spoiled.
It took three weeks before all the power was restored after Hurricane Gustav in 2008. Hurricane Isaac will be measured in days, utility company officials say. At its peak Thursday morning, Isaac cut off power to 903,039 of the state’s 2.1 million customers of regulated utility companies.
Decisions made about those earlier storms by the five elected members of the Louisiana Public Service Commission helped form the experience of Isaac. The job of PSC commissioners includes regulating utility companies owned by shareholders or cooperatives.
Bill Mohl, who is in charge of the two Entergy subsidiaries outside New Orleans, last week credited a $535 million investment since 2008, overseen by the PSC, with strengthening the transmission system. That work protected the system and kept damages from being worse, he said.
Because utility companies operate as monopolies in their service areas, the PSC is allowed to oversee the private companies’ decisions because those choices impact customers who have no alternative with whom they do business. “We’re the competition,” candidate Ed Roy, R-Lafayette, said about the PSC during a forum last week before a room full of Baton Rouge businessmen, for whom “government regulator” is usually the vilest pejorative.
Six candidates are competing to replace PSC Commissioner Jimmy Field, who is retiring after 16 years representing the Baton Rouge-Lafayette region.
Candidates Sarah Holliday, R-Baton Rouge, and Greg Gaubert, No Party-Thibodeaux, did not attend last week’s Chamber of Commerce of East Baton Rouge Parish forum for candidates in the Nov. 6 election. But each say the fundamental job of a PSC commissioner is to ensure that the monthly bills Louisiana consumers pay for electricity are fair.
Underlying the importance of the little-known office, another candidate, Scott Angelle, R-Breaux Bridge, told the same forum that for much of Louisiana, his family included, the couple hundred dollars or so paid each month for power constituted the second- or third-largest regular bill of the household. Individual businesses and residences in Louisiana spent a combined $6 billion for power in 2010, he said.
It’s the PSC that decides how much Louisiana utility customers pay each month. Commissioners pick among dozens of self-serving plans at the intersection of complex engineering and high finance, said candidate Forest Wright, D-New Orleans. Regardless of the choice made by the PSC, he said, it’s the customers who pay. The only real question is how much?
After Hurricane Katrina, the price of natural gas skyrocketed, leading Louisiana customers to pay some of the highest monthly bills in the South. PSC commissioners pressed utility companies to build generating plants that use fuels other than natural gas to make electricity.
Entergy in 2007 began converting a generating plant near LaPlace, called Little Gypsy, from natural gas to petroleum coke, the construction of which customers would pay. But projected construction costs rose from $1 billion to $1.6 billion, while the cost of natural gas dropped, and the PSC pressed Entergy to drop the project, which it did. Entergy Louisiana customers, however, continue to pay about $1 more per thousand kilowatt hours each month to cover costs the company spent before the project was terminated.
Candidate Erich Ponti, R-Baton Rouge, pointed out to the forum that the PSC is facing one of the largest decisions in its history as Entergy proposes to transfer functional control of its transmission facilities to a regional operator. The move could lower costs for Entergy customers by about $575 million over a 10-year period. But there’s also the possibility that Louisiana customers may be exposed to other costs, Ponti said, adding that “the devil is always in the details and I guess that’s the point.”
Mark Ballard is editor of The Advocate Capitol news bureau. His email address is mb allard@theadvocate.com.