When Politicians Direct Capital

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Bigger Pie Forum | When Politicians Direct Capital | Kelley Williams
 
Bad things often happen when politicians direct capital.  A recent lead editorial in The Wall Street Journal provided some examples.  One was some of the highest electric rates in the country.  That sounds like Mississippi Power’s monopoly service area in southeast Mississippi. But the WSJ editorial was about California’s PG&E utility.  Its rates are up 40% in the last ten years vs 15% nationwide.  One reason is a 2006 state law requiring the utility to get 20% of its power from renewables such as wind and solar.  Green energy is expensive.
Mississippi Power Company’s experiment with green energy (the Kemper County Lignite Plant) caused its rates in 23 counties in southeast Mississippi to rise too.  They were already higher than those in counties served by Entergy.  Both companies are monopolies regulated by the Mississippi Public Service Commission (PSC).  Why are Mississippi Power’s rates higher?
There could be several reasons.  Its lawyers and lobbyists may be slicker (unlikely). Its engineers may not be as smart (doubtful).  Its executives may be shrewder (they are all pretty shrewd).  It may be more favored by powerful politicians like the former charismatic Governor (definitely in the case of Kemper).  It may not be watched as closely by Mississippi’s Attorney General who has a case pending against Entergy for overcharging (possible).  The PSC which regulates rates may not be doing its job (probable).  Or all of the above to some degree.
This is about the PSC.  It’s not doing its job.  And about the Mississippi Legislature which makes the rules (laws) about how the PSC works – or doesn’t work.  The Legislature is pussyfooting around some needed and useful changes to the law.  Lawmakers are slow-walking change.  They may be listening to utility lobbyists.  Utilities and regulatory bureaucrats don’t want change.

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