| It's time to take the "Public" out of the Alabama Public Service Commission's name. After all, they stopped serving the public interest a long time ago and Terry Dunn, the only PSC Commissioner with any interest in protecting the public, is fighting a losing battle with his fellow GOP commissioners: Dunn's motion asked for a formal review of ranges of return on equity allowed for utilities, specifically the allowed range for Alabama Power Company, Alabama Gas Corporation and Mobile Gas Service Corporation. His motion also asked for the reviews to be conducted every six years. "How could this not be the right thing to do when we haven't ever done it? said Dunn spokesman David Rountree.
PSC Commissioner Twinkle (I love coal!) Cavanaugh responded in typical GOP/TEA Party fashion: Jobs! Evil Environmentalists! More Coal! Protect the Family! All she left out was a mention of Jesus, but maybe that comes next meeting.... Not to be outdone on the conspiracy front, newly-appointed Commissioner Jeremy Oden tossed in a warning about the right-wing's favorite monsters - LAWYERS - invading formal hearings and, shudder, asking questions! Oden said formal hearings would result in lawyers answering questions asked by other lawyers. He said the informal reviews would allow more conversation.
No doubt it's also easier in an "informal" review, to pocket campaign contribution checks with nobody noticing. What might formal hearings uncover? The Alabama Political Reporter served up this tidbit: Under the current approved rates Alabama Power is allowed to clear 13% to 14.5% return on their investment. If their costs go up to where they make less than a 13% profit, the PSC can raise rates to return the state regulated monopoly back to their accustomed profit margin. If costs go down to where Alabama Power is making more than 14.5% the PSC can reduce power rates. Critics of the system point out that recent Alagasco bills have been twice what Mississippi gas customers pay. A series of bad hedging bets meant that the Alabama Gas Company was paying twice what gas was selling for on the cash market. However since 1983 the PSC guarantees Alagasco no less than a 13.15% profit so consumers in Alabama paid for Alagasco’s bad hedging bets with higher heating bills. The current rates of return were set by the PSC decades ago. A report by Regulatory Research Associates found that Alabama Power, Alagasco, and Mobile Gas guaranteed rate of returns was well above average for the industry.
Dunn wasn't dissuaded: Dunn in a statement said his colleagues were "trying to change the subject rather than give the public a straight answer about why they are fighting a proposal that is so obviously in the public interest and so obviously overdue." Dunn questioned how a rate review translated into an environmental or economic development issue. "And why is she scrambling so hard to change the subject?" he said of Cavanaugh.
Holy cow! An Alabama PSC Commissioner who's calling for greater transparency, accountability, and public scrutiny of private utilities? Doesn't this poor guy realize that those aren't Alabama Republican values? Could be, Dunn is just bored. After all, the PSC really doesn't have much to do since the Alabama Legislature has stripped it of the power to monitor and regulate, well, just about anything: Surely these formal hearings with utility companies are more useful to the public than the PSC's industry giveaways: Turns out the Alabama Public Service Commission has also negotiated special rates with Alabama Power to encourage job creation. Part of the PSC's scheme to create jobs increases the upper demand limit for businesses to qualify for special small business rates. The savings amounts to about $25 a month, which doesn't seem like enough to encourage a business to create even one more job.
Another part of the PSC scheme is to give a rate discount to businesses that open or expand in a building that's been vacant for 6 months or more. This amounts to 10.5% to 12.5% off the total bill, which could be quite a substantial amount. Unfortunately, the example given in this report is of a chiropractor who moved to Alabama, but admits he didn't even know about the discount program when he decided to locate his practice in a vacant strip mall.
The sad thing is that even if Commissioner Dunn succeeds in doing his job and brings more scrutiny to utility companies, it will only take a few howls from Alabama Power for that to change. As in the past, the Alabama Legislature will probably be more than happy to step in and make the Alabama PSC even more toothless. |
