A brief dispute at the Alabama Public Service Commission demonstrates the manipulative tactics of Alabama politicians.
Alabama Power Co. enjoys a guaranteed return on equity of 13 to 14.5 percent, higher than the return enjoyed by many utilities.
The formulaic rate of return, in place for three decades, is not necessarily a bad thing. It deserves regular review, however, and that is one of the functions of the PSC. The regulatory agency’s role is to maintain rates that are fair to both the utility and consumers.
After decades in which PSC’s dealings with Alabama Power have been in informal meetings often closed to the public, Republican Commissioner Terry Dunn reasonably proposed the first formal review of the rate structure. He did not claim Alabama Power’s rates were too high; he merely suggested it was time to study them. A formal review would require public testimony, rather than backroom meetings.
PSC President Twinkle Cavanaugh, former chair of the state Republican Party, relied heavily on tea party enthusiasm in securing a commission seat in 2010 and its presidency in 2012. She went to rallies. She spoke little about the actual functions of the PSC, instead focusing on political issues over which the PSC has no control. She alternatively bashed President Barack Obama and the U.S. Environmental Protection Agency. No surprise, it worked.
The tea party in Alabama is consistently opposed to Obama and federal regulatory agencies, but its members also claim to resent crony capitalism. They have been passionate about a frustration common to many voters: Companies too often convert political contributions into profit.
Alabama Power plays politics well. It has contributed more than $3 million to state political campaigns since 2003, according to the National Institute on Money in State Politics.
The rate review Dunn proposed went nowhere. Cavanaugh said it would benefit lawyers and cost jobs. A vice president for United Mineworkers entered the fray, claiming bizarrely that Dunn’s proposal was “a ploy of radical environmental groups.”
Dunn made a motion for the formal review Jan. 10. Neither Cavanaugh nor newly appointed Commissioner Jeremy Oden — a Montgomery fixture whose campaigns have received thousands from Alabama Power over the years — seconded the motion. Dunn’s sensible request died a quick death.
Dunn says he was summoned to the office of House Speaker Mike Hubbard — another recipient of Alabama Power’s political largesse — and told he was taking his job too seriously.
It’s time for Alabama voters to wake up to the fact they are being played.
Dunn’s proposal had nothing to do with Obama or environmentalists. It had to do with the PSC doing its job. It had to do with how much money goes from Alabama ratepayers to the pockets of Alabama Power shareholders.
Alabama politicians believe voters are gullible. It’s time for the people to tell them otherwise.
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