Tag Archives: lifeline rates

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.


Times-Warner, Comcast, and Others Narrowing Broadband, Widening the Digital Divide

Toronto   Yet more disconcerting news flying in the face of all of us who care about the class and opportunity divides that are permanently widening the inequity between have-a-littles and have-a-lots with emerging reports of metered broadband access to the internet thanks to the relentless efforts of Times-Warner, Comcast and other cable companies, and the totally ineffective and captive regulator of these public resources at the Federal Communications Commission (FCC).  The Times published a story on Times-Warner’s squeeze in this direction in San Antonio and South Texas and quoted David Cohen, executive VP of Comcast, leading the cheering squad in the same direction for his outfit.

Times-Warner in Dallas has continued to studiously avoid replying to our digital access coalition in the metroplex about the timing and intent of its special plan for low income family access that was trumpeted and then seemingly forgotten by the FCC nine months ago.  Cohen and Comcast continue to try to brush off their pathetic performance in providing access that was required as part of their agreement with FCC in the acquisition of NBC/Universal by Comcast last year.  Seemingly they want an “A” for effort, when they repeatedly don’t show up for anything but the school play and refuse to do the real work of not public relations, politicking, and marketing (including admitting to up-selling when families seek their lower cost alternative “internet essentials” package), but outreach and facilitation to achieve access to the internet for low income families.  [Cohen expresses umbrage that our coalition will not give him a “pass” on their weak results and limp efforts with this program, but the facts are the facts, and we have long been students of his career – in fact a book on Philly government where he was a main player for years I used as a training exercise for a while at ACORN in the past! – so we actually know he and his company would do much, much better if they would take their commitment and the FCC order seriously, but at this point they are simply posing with the poor and the FCC and others are looking the other way.]   Recently we moved forward with an on-line petition to the FCC, so please join us in demanding action for access to the poor to internet at Comcast.

Studies already indicate that the USA is drifting farther and farther down the list in terms of broadband speed and penetration with Korea now multiples ahead of us and many other countries.   A fellow nailed the problem they are seeing at Times-Warner easily:

They wonder whether strategies like usage-based billing will worsen what is already an economic barrier for some Americans. “It’s like locking the doors to the library,” said Nicholas Longo, the director of Geekdom, a new collaborative work space for small companies in San Antonio.

No surprise that Walter Issacson found in his interviews of Steve Jobs and Bill Gates for his tribute book on Jobs that in a rare moment of agreement both expressed disappointment that computers had meant so little for educational access and achievement.  Rather than opening the world wide to the poor, scaling the wall through costs barriers has been impossible, and the FCC’s continued subordination to the big cable companies has allowed them to monetize the gateways through the public spectrum in ways that are anathema not only to lower income families but to democracy itself.

Ironically, our willingness to accept what we used to call “lifeline rates” in the 1970’s when struggling with constant rate increases with utility companies to insure that there was a right of access to seniors and the very poor is somewhat similar to our desperation to promote access even to the weak offerings of Comcast’s Internet Essentials to at least put millions of our people through the front door of internet access.  These new metering programs would mean even when they fight their way inside they are only going to be able to look at some covered windows and other locked doors that they still will see barred due to their more limited incomes.

We are moving past the realm of farce and into the province of shame now as cable conglomerates are rolling the regulators and the public is punished.