OPINION: Public Service Commission Must Take Responsibility for Rate Hikes |
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Executive
Director, Citizens’ Utility Board
June 18,
2002
For the past four years, the politically appointed commissioners at the
Public Service Commission (PSC) having been holding a wild party for the
state’s utilities. No rate hike was too outrageous, no merger was
too incestuous, no due process was too important for these commissioners
to lavish gifts upon investor owned utilities.
Now, with an election coming, the party is waning. Like a teenager caught red-handed by his parents amidst the mess of an all night party, Commissioner Bert Garvin has donned his straightest face and asked “Who, me?” Mr. Garvin has trotted out the predictable: ‘We have done our best. Those who criticize us are politically motivated’. Unfortunately for Mr. Garvin, his PSC will have to live with the consequences of their actions. This commission will be best remembered for unconscionable rate hikes – nearly one half a billion dollars of increases since 1997! Even Alliant Energy, which was under a PSC ordered five year “rate freeze” managed to raise its rates by 20% under this PSC. The state’s electric utilities saw their rates go up 15% despite the costs of producing power decreasing by over 20%. While Wisconsin residents were paying more each year, residents in neighboring states actually saw their rates decrease over the same period. This PSC will also be remembered for its odd approach to due process. In one notable episode, the PSC allowed Ameritech to deal secretly with staff for four months on a plan for local telephone reliability measures. When the public found out about the secrecy, the PSC hastily ordered a hearing – giving ratepayers one week to respond to a plan developed by the phone companies and the PSC over a period of 16 weeks. Another memorable moment was when chief legal counsel Edward Marion tried to amend PSC rules to bar anyone but lawyers from PSC hearings. (He lost after newspapers and consumer groups brought the overreach to public scrutiny.) This PSC will also endure the legacy of a new policy that tells professional staff at the commission to have no opinions about rate hikes or other utility proposals. Just do the analysis, they were told, and the commissioners will make all of the decisions (without undue influence from utilities, we are to presume.) Mr. Garvin warns that rates will rise when new power plants are built. Of course rates will rise. The question is how much? The PSC cannot avoid the fact that they have given unjustified rate increases for the past four years. That only raises the floor from which new rate hikes to pay for new power plants will rise. The PSC had an opportunity to keep rates affordable but they partied on. Yet, Mr. Garvin wants to say those that criticize are politically motivated. He fails to mention that the criticism is multi-partisan. All Democratic candidates, the one Republican challenger to the Governor, a Libertarian candidate and a Green Party candidate recently took turns at a business forum to see who could present the greatest distance between themselves and the PSC. Mr. Garvin points out that the Citizens’ Utility Board (CUB) and the Wisconsin Industrial Energy Group (WIEG) are also part of that partisan attack on the PSC. Mr. Garvin forgets that it took this PSC to forge a close working relationship between residential ratepayer representatives and large corporate users of energy. In short, the criticism of the PSC isn’t partisan – its almost universal. Yet, the PSC marches on, doing what it can to help utilities raise their rates. Look for the PSC to dance one more dance with Ameritech. They will try to give a record fast recommendation that Ameritech be allowed into the long distance business. They will try to sing one more swan song for Wisconsin Energy. They will allow some of the most generous terms ever granted for building new power plants that should have been built years ago. Then, at long last, the party will be over. And, as is too often the case, someone else will have to clean up the mess. |