U.S. Senator David Vitter and Jefferson Parish President John Young today voiced concerns about Entergy's post-Isaac works by offering up a proposal to replace utilities in the future following a less-than-optimal response.
A letter from Vitter and Young asks Governor Bobby Jindal and legislative leaders to review state laws on the replacement of utility companies and pursue reforms to guarantee prompt and reliable performance.
At a news conference today on that topic, the two elected officials expressed frustration about Entergy's response following Hurricane Isaac.
Vitter said the point of his proposal is to "inject some competitive pressure into this arena where we think it's sorely, sorely needed."
Young said that future events should be the litmus test on whether Entergy should retain the monooply on power.
"If Entergy is not going to do its job, then we need to have the option of bringing in competition to make sure that we better serve our constituents and our businesses," said Young.
Young said the slow restoration is an economic development hindrance, as national corporations expect to be able to get back to work quickly.
Louisiana Public Service Commission Chairman Foster Campbell tells WWL-TV the idea has more to do with politics than holding utility companies accountable.
Entergy emailed us their response, saying, "As they typically do after every storm, the Louisiana Public Service Commission will conduct a full and thorough review of our storm response. We welcome their review regarding the effectiveness of our response.
"We stand by the results of our restoration efforts which saw us restore power to customers faster than we have been able to do in any previous hurricane, Katrina, Rita, Gustav or Ike. At the same time, we learn lessons from every storm, and Isaac was no different."
Here's a copy of Vitter and Young's letter:
Tuesday, September 25, 2012
Governor Bobby Jindal
Senate President John Alario
Speaker Chuck Kleckley
Senator Danny Martiny, Chairman Commerce Committee
Representative Erich Ponti, Chairman Commerce Committee
Senator Ben Nevers, Chairman Judiciary A Committee
Representative Neil Abramson, Chairman Civil Law & Procedure Committee
Dear Governor Jindal and Legislative Leaders:
Like so many Louisianians, we were extremely frustrated by the slow and inadequate response of at least one Louisiana utility in reestablishing service following Hurricane Issac. In light of that, we urge you, the Public Service Commission, and other involved policy-makers to aggressively pursue substantial reforms to guarantee prompt and reliable utility performance in the future.
We strongly and specifically request that you revise current state constitutional and statutory provisions to allow one or more parishes and/or municipalities or the Public Service Commission to pursue a forced sale of utility assets if a utility provider fails to perform. The utility would receive fair market value for its assets, just as it currently does when a municipality expropriates its assets. The process is already well established for municipalities; you would simply be extending it beyond the municipal level.
We believe other affected government entities like parishes and the Public Service Commission should be able to initiate such a process. And that process should be able to lead to ownership of the utility assets by a parish government, a consortium of parish and/or municipal governments, or a different regulated private utility company pursuant to an open, competitive procurement process without the necessity of government ownership.
In Louisiana, these utilities are monopolies at the consumer level, albeit regulated ones. While this cannot be completely changed – no one wants seven sets of electric transmission lines in the rights of way, for example – the Public Service Commission has previously committed itself to the development of a competitive, market-based approach to utility regulation whenever it is in the public interest. The above reform would inject real competitive pressure into the equation. It would give ALL dissatisfied jurisdictions a meaningful avenue to replace a poorly performing utility, something most don't have now.
Why should a utility be guaranteed its costs plus a profit but in most cases never EVER be able to be replaced, no matter how poorly it performs? The forced sale option should be created for use in those hopefully rare cases when needed. And the very existence of the option – the implied threat – could only spur improvement in a utility's overall performance.
Of course, we would be happy to help draft and pursue passage of such legislation. We will plan on actively working on this with you in the near future.
Thank you for your leadership on these important utility matters.
David Vitter John Young
United States Senate Jefferson Parish President
Cc: The Honorable Mitch Landrieu, Mayor of New Orleans
The Honorable Billy Nungesser, Plaquemines Parish President
The Honorable Natalie Robottom, St. John the Baptist Parish President
The Honorable David Peralta, St. Bernard Parish President
The Honorable V.J. St. Pierre Jr., St. Charles Parish President