In 1907, New York State created its Public Service Commission in an effort to protect consumers, keep prices regulated, and make sure that utility companies maintained their duty to be honest in their dealings with customers and not predatory with their rates. While utilities aren’t legally required to be monitored by the PSC, once you are monitored, you’re bound by their decisions. Often during licensing and franchise agreement negotiations, utilities are pushed into being monitored by the PSC in an effort to make sure they aren’t avoiding scrutiny.
The Commission has been in place since 1907, but only in 1996 adopted a mission statement, and that statement reads as follows:
“The primary mission of the New York State Department of Public Service is to ensure safe, secure, and reliable access to electric, gas, steam, telecommunications, and water services for New York State’s residential and business consumers, at just and reasonable rates. The Department seeks to stimulate innovation, strategic infrastructure investment, consumer awareness, competitive markets where feasible, and the use of resources in an efficient and environmentally sound manner”
That sure sounds spiffy, doesn’t it? All that talk about just and reasonable rates, safe secure and reliable utilities, and even competition! The New York PSC sounds like a Nirvana of good deeds just waiting to happen for the state, which of course means it not only didn’t happen, but has gotten to the point now where it’s a complete and total joke.
For years and years the Public Service Commission has been used as a hammer by legislators to come down on utility companies who don’t play their game. At the same time, it has also been, essentially, a rubber stamp for any rate increases being dropped on the people of New York State while also limiting competition. In essence, the Commission is a puppet that moves in certain directions based on who has control of the strings on that given day.
Recently, in Rockland County (where I live) the big fight has been over United Water. First, they wanted to create a desalination plant that would produce more drinking water in Rockland. The plan was almost universally panned because it would result in Rockland County paying more for the new desalinated water while water that didn’t need to be treated would be shipped downstate for use in New York City. “Our” water would be shipped away from us so that we could pay higher rates to drink treated water, which incidentally is also ours.
No one thought this made sense, and it has been fought tooth and nail for years.
Now, recently, United Water has started talking about a massive rate increase, and this has turned local politicians into posturing microphone seekers, and when you talk about local politicians being camera seekers, you can’t do so without talking about my infamous State Senator, David Carlucci.
Carlucci is such an interesting character that I actually made a video about how he turned me into an anarchist. It’s really worth a watch because it puts into perspective the kind of politician he really is and makes his position on all of this even more clear.
Carlucci thinks it’s high time for another new government position; that of Utility Consumer Advocate. The job of this “advocate” would be to fight utilities to ensure that prices are kept fair and equitable for consumers. Essentially, this person would be the voice of the people in the numerous hearings about rate increases and service changes.
Does any of this sound familiar?
The new position would be a person with an office and a salary whose sole job it is is to do the job that the five current Commissioners (all appointed by the Governor for six year terms) get paid to do. Carlucci’s “solution” to a government commission behaving badly and not following their mandate is to create another government position to do the same job while doing nothing to dismantle the old one.
How does that even make sense?
In his Op-Ed in the Journal over the weekend, Carlucci even confessed (which must’ve pained him terribly) that a two separate governmental organizations designed to protect consumers had failed.
“For years, New York State agencies such as the Public Service Commission as well as the Utility Intervention Unit, a division solely of the Department of State, have not worked on the behalf of consumers.”
Well, if that’s the case, why aren’t you working to abolish either? This is the statist mentality in action. When government fails, you don’t remove the failure or stop the program, you double down on it and add to it even if you’re adding to it in an effort that would replicate the job, the duty, or the expected outcome of the first program.
This is why government is broken. When party A (government) takes party B’s money (the people) to give to party C (agencies / programs), there is no chance at efficiency because party A has no incentive for being efficient, cost-effective, or making sure that party C is productive. In the end, it costs party A nothing if party C fails.
We need to fix that, and it doesn’t come by piling on regulations or creating more positions inside the same government. It comes from breaking down what doesn’t work and starting over. It comes from real reforms that are responsive to the people for whom the agencies are created. It actually comes from a place many politicians lost touch with but play lip service to: their communities.
Right now the FCC is drawing tons of fire for a new set of yet-unpublished rules that would allow for “internet fast lanes” for edge providers (the folks delivering content). Essentially, cable companies could charge Netflix to get better access to you as their customer, giving them a competitive advantage over smaller companies that can’t pay those fees. Many, myself included, believe the internet should be content agnostic. A “dumb pipe” if you will. The infrastructure would be provided by telecoms, paid for by subscribers and used by all. Everyone would be happy.
That’s clearly not what the FCC wants, and people laugh at the fact that people who run the FCC have usually, upon leaving, gone right back to the industries they were regulating as FCC Commissioners and Chairs. Their solution is to make more rules. I have a better solution: abolish the FCC altogether.
If there was nothing to regulate, and no financial benefit to a Commissioner when they left office, at least you know they wouldn’t be subject to the polluting influence of money. In fact, the reason we have no competition in internet service is that local municipalities have limited competition through exclusivity agreements and franchise agreements and licensing. Innovative providers are locked out from the discussion because it’s financially beneficial to government officials who love their envelopes at re-election time to make the “right” decision, and by “right” I mean “right for business, screw the customer.”
Wouldn’t it be interesting if the FCC or local governments couldn’t shut out new competition? Or if buying them off wouldn’t get you anything? Why would anyone throw bags of money and post-positional jobs to Commissioners if they couldn’t pave the roads for them?
Often we get so locked into the minutiae of what regulation would work we fail to realize that regulation is the problem to begin with. Corruption doesn’t happen because there aren’t enough regulations; often it happens because those with money have a one-stop shop to get every itch scratched.
Header Image via Pete Dzintars on flickr.