SKRMETTA: Energy Efficiency – When A Fee Is A Tax Is A Slush Fund

I am a strong proponent of energy efficiency. I acted for my family. I insulated my home, bought insulated windows, efficient appliances and did what was possible to reduce my monthly utility bills.

What I don’t like to do is to saddle the public with a government program that adds an additional cost every month for ratepayers to take their money away and spend it on what I think will be a net sum zero effect program. There is a right way to promote energy efficiency, and this new program isn’t it.

One of the many responsibilities of the Louisiana Public Service Commission is to provide oversight for the public to make sure the ratepayers’ money is being spent properly by the various utilities that receive the funds. On Wednesday, August 21, 2013, the commission veered from that task.

While energy efficiency (EE) is a useful tool in the effort to save electricity, the EE plan the commission has as current law seemingly provides for no oversight of how ratepayer funds are spent by “green” companies that will receive the new ratepayer charges via payment from the utilities. So it seems that those funds can be spent in any way that the third party administrators like – and at the moment there is no way to make sure the funds are being spent in a legitimate fashion. Not since the “slush-fund” days of the 70’s and 80’s has Louisiana seen such brazen manipulation of the public’s money.

Simply put, a new charge on consumers’ bills (at the moment no more than $6.00 per month for residential users and no more than $75 per month for non-residential users) will soon be added. (In addition, Industrial users, who consume more than 50% of the electricity in this state, have better lobbyists than residential and commercial users and are thereby excluded from this program.)

The muddying of the water in this matter is the false presentation of this program as a “voluntary” program for utilities. What is left out of the explanation is that while the program is voluntary, the utilities are guaranteed the right to recoup all costs of the program. And even that is not accurate, or even truthful, as utilities will recover the cost of the program, about $30 million dollars over a 4 year period, AND return on equity – in layman’s terms, profit. Worst of all is the fact that the value of any electricity that utilities end up saving, by not producing it or consuming it, gets to be recovered by the utilities as well. Call it the sale of phantom electricity.

So they get to sell electricity they don’t make and get to charge the ratepayer to recover those costs. You are going to pay utilities not to produce electricity so the green industry can get paid to develop this program.

The goal of any energy efficiency program is to reduce electricity consumption by the public to save the public money on their bills. This EE program has a zero effect on that goal as the utilities can recover the value of the electricity they fail to sell. Costs will not go down, in fact, as profit is included, costs to consumers will actually rise. This program only seems to cause a money transfer.

The truth is, this program is a method of funding non-regulated third party companies, and not for profit groups, who could otherwise not earn that capital on their own without public subsidies. An example is these folks are buying a new car and you the public are now paying the monthly note. I guess these green groups just have better lobbyists than the public, but not so good as the industrial community.

Three commissioners voted for the program, I voted against it. But it’s now the law. I will monitor it. And I will work to do the following:

1. Have the cost to the consumer, of the energy efficiency program, listed as a line item on your monthly bill so you can see what’s spent. I believe that the cost will not be capped and you will be able to witness the program costs grow.

2. I will push for the commission to develop a method of accountability and full audit authority over third party administrators and companies who receive ratepayers’ funds for their purposes. They want your money, they have to be accountable to the commission.

3. In addition, another fee for renewable energy is buried in the current rates and I will push for transparency on that item as well and list it as a line item. It cost more than was originally estimated and the public needs to know. Those costs are not capped and you should be able to witness the program costs grow.

4. I will request the commission take additional action to create an agency of the Commission, similar to the corporation that oversees telephone services for the hearing impaired, to explore financially self-sustained, market economics based, programs that will allow folks to have the benefits of energy efficiency but at no cost to the ratepayers. This program was ready to start in March when the commission flipped its vote and voided the free market approach to energy efficiency and moved to the public subsidized method.

The public has a right to know where their money goes, to what purpose and if it was spent properly. I want to ensure we have truth and transparency in every action the commission, and government, takes. I will fight to keep government from enacting rules that fleece the public. Unfortunately the public was one vote short of correcting this problem. So now that the decision has been made, I commit to being personally vigilant to ensure the public is treated as fairly as possible under the current energy efficiency program.

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