Vitter Goes A Bridge Too Far With Forced Utility Sale Proposal

This morning, a letter went out from Sen. David Vitter and Jefferson Parish President John Young to Gov. Bobby Jindal, several leaders of the state legislature and the Public Service Commission on the question of a utility which performs poorly and what should happen to it.

It appears Vitter might have found himself too far into Holland on this one.

The letter…

Dear Governor Jindal and Legislative Leaders:

Like so many Louisianians, we were extremely frustrated by the slow and inadequate response of at least one Louisiana utility in reestablishing service following Hurricane Issac. In light of that, we urge you, the Public Service Commission, and other involved policy-makers to aggressively pursue substantial reforms to guarantee prompt and reliable utility performance in the future.

We strongly and specifically request that you revise current state constitutional and statutory provisions to allow one or more parishes and/or municipalities or the Public Service Commission to pursue a forced sale of utility assets if a utility provider fails to perform. The utility would receive fair market value for its assets, just as it currently does when a municipality expropriates its assets. The process is already well established for municipalities; you would simply be extending it beyond the municipal level.

We believe other affected government entities like parishes and the Public Service Commission should be able to initiate such a process. And that process should be able to lead to ownership of the utility assets by a parish government, a consortium of parish and/or municipal governments, or a different regulated private utility company pursuant to an open, competitive procurement process without the necessity of government ownership.

In Louisiana, these utilities are monopolies at the consumer level, albeit regulated ones. While this cannot be completely changed – no one wants seven sets of electric transmission lines in the rights of way, for example – the Public Service Commission has previously committed itself to the development of a competitive, market-based approach to utility regulation whenever it is in the public interest. The above reform would inject real competitive pressure into the equation. It would give ALL dissatisfied jurisdictions a meaningful avenue to replace a poorly performing utility, something most don’t have now.

Why should a utility be guaranteed its costs plus a profit but in most cases never EVER be able to be replaced, no matter how poorly it performs? The forced sale option should be created for use in those hopefully rare cases when needed. And the very existence of the option – the implied threat – could only spur improvement in a utility’s overall performance.

Of course, we would be happy to help draft and pursue passage of such legislation. We will plan on actively working on this with you in the near future.

Thank you for your leadership on these important utility matters.

The idea that a local government can fire a public utility isn’t a bad one, of course. Public utilities are monopolies, and without the possibility they could be fired there is the question of inadequate accountability.

And the aftermath of Hurricane Isaac, in which the restoration of power to areas affected by the storm was spotty where Entergy was concerned and there was a somewhat quizzical phenomenon of bucket trucks sitting idle in parking lots on clear days waiting to be dispatched, provides the impetus for this proposal.

The Jefferson Parish Council is the prime mover here. Jefferson politicians have been hammering Entergy for slow reaction to power outages since the hurricane passed, and since Young hasn’t had any particular success making things happen on any other front with the company he’s now at the spearhead of this idea.

It isn’t likely to go anywhere, though. There are so many moving parts to the idea that parishes and municipalities would decide on a whim or a fit of political pique to force a sheriff’s sale of a utility’s assets as to make it a nightmare possibility. And let’s face it – while Young doesn’t particularly have the reputation as a crook so far, his predecessor Aaron Broussard just pled guilty to federal corruption charges. Does anybody really trust Jefferson Parish’s politicians to properly manage utilities or to make decisions on the sale of assets free from political corruption and skullduggery?

How about St. John Parish, whose previous president also went down on federal charges? How about Orleans Parish, whose previous mayor is under federal investigation?

Devolving power over, well, power, to crooks at the local courthouse is akin to the ill-fated Operation Market Garden during World War II – it might have come from a defensible principle, but as an exercise in practice it’s an invitation to disaster.

It’s a bridge too far.

And Vitter has now put himself in the position of being called a political attention whore by the state’s largest and longest-standing political attention whore

‎’Reached by phone Tuesday, Louisiana Public Service Commission Chairman Foster Campbell, D-Bossier City, said he had “doubts, big doubts” on the proposal, and suggested, bluntly, that the letter’s authors could be using the platform for political gain. “That’s that’s the craziest thing I’ve ever heard,” Campbell said.’

You don’t want to give Bananas Foster a chance to call you crazy. Sure, for Bananas Foster to call anybody crazy is rich indeed. But when he has a reason to say that, you’re too far out on a limb.

The guess here is that Vitter had Young in his ear and since he’d like to keep Young happy he went along with this idea.

Next time, Senator, don’t listen to Young.

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