Tuesday, July 31, 2018

PSC: Substituting "Politician" for "the Public" . . .

Continuing on the subject of "Short Circuiting Upstate," the NY Post opines that "Consumers are going to lose in Cuomo’s bet on wind energy." The Post explains that the Cuomo-PSC Order will require NY utilities to purchase offshore-wind power that will cost FOUR TIMES the current average cost of power in NYS -- with that current average being already 40% higher than the national average! The Post suggests that damages to the environment, the fishing industry and grounds, and navigation will also result from the Cuomo-PSC action.

The environmental impact statement (EIS) for the PSC Order avoids assessing specific environmental impacts with a statement that the order is not tied to any particular site. The EIS only considers "no action" as a reasonable alternative, with nuclear power -- particularly the  continuation of existing Indian Point nuclear power (which Cuomo has vowed to shut down by 2021) -- conspicuous by its absenceIt certainly looks like the SEQRA process, which in barest essence is supposed to ensure that decision-makers will know the environmental consequences of what they are doing, has been bent to fit the governor's notion of what is in the public interest. But, as the Post editorial suggests, it is not just SEQRA that is being bent:
During his successful 1932 run for the White House, New York Gov. Franklin Roosevelt campaigned hard on the issue of electricity affordability. In a speech in Portland, Ore., he told voters that as governor, he had made sure that the New York Public Service Commission was acting “as an agent of the public.” Because electric utilities are monopolies, government’s job was to ensure consumers get a “fair deal” — “adequate service and reasonable rates.
Gov. Roosevelt's view reflects the "traditional" view of why we have a PSC: Certain services are so expensive to implement that they would never be built without the builder being assured that competitors will not prevent the builder from recouping its costs.  The government grants the builder a monopoly in return for government control of rates to keep consumers from being gouged. How times have changed!

Does PSC forcing Utilities to purchase power that costs 4 times the current inflated average sound like ensuring that "consumers get a 'fair deal?'" 

Now the Cuomo-PSC is at the center of another controversy.  Per WKTV "Public Service Commission orders Charter/Spectrum to leave New York State" because, supposedly, Spectrum has not lived up to promises to expand its broadband network to underserved areas.  Assemblyman Brindisi was quick to jump on the bandwagon.
"It’s high time New York cut the cord with Spectrum Cable and provided residents with more competition. Over the past several years, I have heard from literally hundreds of constituents who have called me and signed my online petition, and they are absolutely fed up. They’ve had it with poor customer service; sudden surprise rate hikes they cannot afford; and promises that are not being kept by Spectrum. What is just as bad is that thousands of New Yorkers who are waiting for the broadband access Spectrum keeps advertising it is providing are still stuck with 20th Century technology. I am pleased that the PSC is taking these serious concerns to heart, and is looking out for the hundreds of thousands of Spectrum customers across the state being shortchanged when it comes to cable and Internet service.”
First, how does kicking a company out of the marketplace provide residents "with more competition?"

Second, per Ars Technica, the "poor service" and "surprise rate hikes" cited by Mr. Brindisi are NOT the basis for the PSC's order.  In fact, the PSC acknowledges that it does not regulate the rates that seem to bother people.  Rather, PSC is in a snit because broadband is not being extended quickly enough -- in its opinion. However that dispute involves potential customers, not those of us who are already paying the bills.  In other words, PSC is NOT "looking out for the hundreds of thousands of Spectrum customers being shortchanged when it comes to cable and Internet service" as claimed by Mr. Brindisi, but, rather, for those hoping that the government will give them the opportunity to become customers at someone else's expense.

If water and sewer service extensions are a guide (the subject of many blog posts here) , extension of wired services into sparsely populated areas will lead to higher rates for us all because someone will have to pay to install and maintain all that additional wire and other equipment, and there are not enough someones in the rural areas to do it. In essence, this is a redistribution scheme where more money will have to be taken from those with broadband to give broadband to those without it.

In addition, the Cuomo-PSC directive forces Spectrum to spend money on a (wired) technology that will become uneconomical in rural areas as newer (wireless) methods of product delivery become available - ensuring that the builder will not be able to recover its costs. (See the difference between FDR in 1932 and now?)

These two stories indicate that the role of the PSC has changed from an organization that nurtures development while protecting the public from gouging, to one that defies the laws of economics to advance political agendas.

The Public Service Commission's name should be changed to the Politician Service Commission because its mission now, apparently, is to make politicians look good.


Anonymous said...

New York State government would goof up a two car funeral. Yet, many keep asking it to do more. Go figure.

Anonymous said...

You hit the nail on the head and rung the bell as well. These are the true facts. I know for a fact it may take months and years to design, plan, acquire, build and turn on extensions. The requirements were ridiculous.