High utility bills energize voters in Public Service Commission races | State Politics
The public and the media historically doesn’t care a whit about utilities or the five Louisiana Public Service Commission members, who serve staggered six-year terms to regulate the privately owned companies and cooperatives that sell electricity to more than 2 million customers.
But monthly electricity bills, on average, have nearly doubled since last summer changing that dynamic for the two incumbents running for reelection on Nov. 8.
“It seems like I’m running just against bills,” said PSC Chair Lambert Boissiere III, D-New Orleans. “We are subject to things out of our control, such as the price of natural gas and storms. But we’ve done quite a few things to help consumers pay these higher bills.”
Scion of a politically prominent family, the 56-year-old Boissiere faces four opponents to continue his 18-year stint representing all or part of 10 parishes of District 3 from New Orleans up the Mississippi River into Baton Rouge.
Over in Acadiana, PSC Vice Chair Mike Francis, R-Crowley, has two opponents challenging his reelection for largely the same reason.
“Everybody is angry with the high prices and they think it’s the fault of the big utility companies and that we’re not doing anything to hold them accountable,” said Francis, who headed the Louisiana Republican Party before joining the regulatory board in January 2017.
His District 4 covers all or part of 17 parishes in southwest Louisiana, including Lafayette and Lake Charles.
One of Francis’ Republican opponents, Shalon Latour, of Iowa, said high bills is the only reason he filed. “I had no intentions on running,” he added.
Keith Bodin, Francis’ other opponent, the high bills raise questions about how closely commissioners have been watching the store.
“I’ve done a lot restoration after the storms. I’ve seen poles that are rotten and transformers that haven’t been operating for years. When you see $3.2 billion (charged customers), how much is that storm damage and how much is maintenance that should have been done all along?” said the No Party candidate from Ragley.
Though most are ignored by voters, some past PSC races have been boisterous.
Afterall, each of the five regulators have larger constituencies than representatives elected to the U.S. Congress. Hence, the PSC has been the launching pad for many a politician, including governors Huey Long, John McKeithen and Kathleen Blanco. More recently Foster Campbell and Scott Angelle sought statewide offices while sitting on the commission.
Combative PSC races usually focus on candidates accusing each other of character flaws. Rarely, if ever, has the campaign narrative centered on what regulators actually do: balance the interests of private companies with those of their customers and thereby set the monthly price of electricity. The amount approved by the PSC eats up a quarter of the monthly income for the working poor and is usually the second largest obligation, behind mortgages, for homeowners.
Consumer advocate Logan Atkinson Burke, of New Orleans, says she’s noticed voters drilling down on the opaque rate-making process with the two incumbent regulators and their six challengers. They want to know what the PSC did and didn’t do to pressure the privately owned utility companies. Queries are about the cost of fuel to run the electricity-making generators; about maintenance of infrastructure that always seems to fail during harsh weather; and about the other factors that go into setting prices on monthly bills.
“It has led to an awful lot of people asking questions who didn’t ask those questions before,” said Atkinson Burke, executive director for New Orleans-based Alliance for Affordable Energy.
Davante Lewis, the Baton Rouge Democrat who is one of the four candidates challenging Boissiere, said: “The bills are something that are grabbing people and showcasing what contributes to high bills and what the PSC could have done but chose not to do.”
For instance, commissioners spent more than a decade considering, but never acted on, adding solar, wind and fermented natural waste to the mix of fuels used to make electricity, Lewis said.
About two-thirds of the electricity made in Louisiana comes from generators fueled by natural gas. The cost of natural gas rose from $2.91 per million BTU in June a year ago to $8.14 this June – a major factor in the higher bills.
PSC Chair Boissiere pointed out that Louisiana is floating on natural gas and its price had been running around two dollars for much of the past 10 years. It’s hard to persuade consumers and utilities to pay a little more each month in order to avoid the peaks and valleys of future bills.
“We do need raise our portfolio. We’ve been arguing that for years,” Boissiere said. “Nobody wants to pay more.”
Commissioner Francis said: “We were going to diversify and we were well on our way and then the price natural gas pancaked. The question is what are we going diversify to and how much does it cost?”
“We should have been having the hard conversations. We should have had a more diverse plan in place,” said Jesse T. Thompson, a Democratic opponent to Boissiere from Plaquemine.
Voter frustration has exposed the hidden power of the commission, said The Rev. Gregory Manning, of the Broadmoor Community Church in New Orleans and another Democratic challenger to Boissiere’s reelection.
“Ninety-nine percent of the people I talk to haven’t heard of the Public Service Commission,” Manning said. “If we really want to help people be part of the process, we have to deliver the information in way that they can understand it, presented in very straightforward language.”
Willie L. Jones, D-New Orleans, is Boissiere’s fourth challenger. He did not respond to requests for comment.
At the intersection of technical engineering and high finance, the world of utility regulation has a language of its own with terms such as load pockets, FRPs, and peak consumption. Only about 200 well-paid utility executives and high-priced lawyers, consultants and lobbyists regularly attend PSC meetings.
Alliance Executive Director Atkinson Burke explains that the point most consumers miss is that regulators are legally bound to balance the needs of the utilities with the rates that consumers must pay. While utilities have expensively groomed advocates, who talk the talk, the set-up doesn’t include anyone officially advocating for consumers.
While true that over the past decade Louisiana has among the nation’s lowest rates, Atkinson Burke said, that boast by utility executives and commissioners doesn’t tell the whole story. Rates only make up part of the charges customers have to pay monthly.
Very generally, what customers pay is set by formula that includes the utility’s costs to manufacture, transmit and distribute electricity, plus a profit, called return on equity. Added to that amount is a utility’s cost of buying the fuel for the generators that make the electricity, called the “fuel adjustment charge.” Plus, customers are required to pay for getting the lights on after storms. Both those amounts are passed through to customers and are not included in the “return on equity” calculation.
Customers are charged by multiplying those costs and the amount of power they use in a given month.
An August 3, 2021, Entergy Louisiana bill charged a homeowner $281.42, which included $250.91 from the base rate, $6.47 from storm restoration charges and $80.16 for fuel in the household using 2,503 kilowatt hours of electricity.
Then the price of natural gas increased as did the cost of storm restorations. In addition, this summer had an historic number of days with temperatures in the 90s, meaning consumers a whole lot more electricity to power air conditioners.
That same homeowner received a $471.70 bill from Entergy on Aug 3. The amount included $408.74 from the electricity base rate, $33.67 in storm restoration repayments and about double the fuel adjustment charges at $190.72 for 3,091 kilowatt hours.