Utility Rate Increase Fights Are Back!

concept of expensive energy billNew Orleans    Once upon a time back in the last century, just as there are now campaigns for things like living wages and ending predatory lending, there were fights to hold giant utility companies accountable all over the country more than forty years ago. Then there was something called inflation, which young people in the 21st century may have forgotten, though thanks to the Federal Reserve’s coming decision on interest rates, we are about to learn anew, where prices and costs rise everywhere, not just on drugs, housing, and higher education. During those times, investor owned utilities (yes, IOU’s) were also known as public utilities because they were allowed monopolies and were therefore regulated by public service or public utility companies from state to state.

Utilities, in even older days, were about as unpopular as, well, banks, and whole political careers were made fighting against their rate and construction plans in favor of the little folks who were sometime called consumers. Many of these commissioners were elected in the western and southern United States and whole careers were made of fighting against utilities and the like. Huey Long, the Louisiana populist was a good example of this breed.

In the early 1970’s, utility rate increase fights were being waged all over the country and not just in places like California and Seattle. ACORN was in the thick of the battles in Arkansas, South Dakota and many other states. The principal objective was winning something we – and others – called “lifeline” rates. Lifeline rates would freeze the price for lower income and elderly users at an affordable level for the first 400 kilowatt hours of usage thereby protecting them against outrageous rate increases. We tried to win at the PSC in Arkansas and would manage to decrease the outrageous requests of what was then called Arkansas Power and Light (AP&L), one of the units of Middle South Utilities, now all known as Entergy. We even decisively won an election in Little Rock establishing lifeline rates only to have the victory overturned in court with Web Hubbell and Hillary Clinton sitting at the utility’s table, but that’s both another story and at the heart of this story, because it has to do with the financing.

To pay for lifeline rates at the bottom for the small users, it was necessary to modify the huge giveaways to the big users receiving bulk discounts for heavy usage. Alcoa and Reynolds Aluminum, huge operations at the time in Arkansas, used 10% of all of the electricity produced by AP&L to run their operations. Making the larger users pay a fairer share protected the smaller users who were essentially subsidizing the big guys. This whole inequity thing we’re fighting now, is not exactly brand spanking news.

Fast forward and there is Ernie Dumas who was on the editorial board of the Arkansas Gazette back then writing a column now in the Arkansas Times that was essentially déjà vu all over again. Entergy, taking advantage of the Republican majority in both houses of the legislature, managed to pass something that overturned the way utilities are regulated in the state and now are whining that they want the PSC to hand over more than a 10% increase. Defying all logic – and history – they are also arguing that allowing them to give even bigger discounts to electricity guzzling industries will bring in jobs. The argument rests on hopes that permanent amnesia has set in and no one will realize that this is their same strategy dressed in a new, more expensive coat, and it has never created jobs but always strapped consumers with high bills. He wonders if “the ratepayers’ voice will be there,” and that’s a call that must be answered. Yet again, and again, and again.

This is the proverbial canary in the mine-shaft. Utility companies are shrewd and they live like vultures in the hallways of state legislatures. Arkansas won’t be the only state where they have seduced them silently to prey on consumers. Let’s hope the battle cry can be heard and answered everywhere once again.

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