Black Hat Jack is at it again….this time it’s keeping the “public” out of the “Public Service Commission”

Delaware’s so-called “Public Advocate,” Dave Bonar, is seeking to keep Reps. John Kowalko and Edward Osienski from “intervening” in an important Delmarva Power ripoff “docket” now happening in the Delaware Public Service Commission (PSC).

Green Delaware’s comments to the PSC on this are here.

So what’s really going on?  Utility regulatory matters aren’t always easy to understand and a little background may help.

Every state has a utility regulatory commission supposedly charged with keeping monopoly utilities from overcharging consumers.  The theory behind it is simple enough:  Utilities are “natural monopolies,” in the sense that it would not make sense to have two sets of poles and wires delivering power, two set’s of gas pipes, and so on.  So the regulatory commissions like the Delaware PSC are supposed to be artificial substitutes for the competition that isn’t there.  They are supposed to limit utility profits to “reasonable” levels.  “Rates of return” are supposed to be reasonable.  In most places, utilities are supposed to do “integrated resource planning,” under the supervision of their commissions, to ensure that they follow sensible long term policies.

None of this has worked.

The commissions, as one would expect, are all captured by the utilities they are supposed to be regulating.  See a discussion of “regulatory capture” here.

Regulatory capture is a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of “Interest groups” that dominate the industry or sector it is charged with regulating.”

Many states responded by setting up some sort of “People’s Counsel,” or “Public Advocate,” or “public staff,” intended to do what the commissions themselves had stopped doing–advocating for the interests of regular people and small businesses.

Delaware’s “Division–or Office–of Public Advocate” was set up in 1978 and only a few people have had the job.  It’s never been very effective, for the same reason the PSC itself isn’t effective–the utilities themselves hold the whip hand.  The duties and responsibilities of the Public Advocate are stated in the Delaware Code at  29 Del. C., Section 8716. (You have to scroll down to Sec. 8716.  Some changes were enacted in 2013.

To be effective, a Public Advocate would need (1) an independent budget, not subject to the whim of the Governor or legislature, (2) independence from political pressure, and (3) real energy and motivation to kick utility butt.

In Delaware, the “Public Advocate” is appointed by the Governor and confirmed by the Senate, and and reports to the Secretary of State, generally a political operative. “… the Public Advocate will continue to serve at the pleasure of the Governor and may therefore be removed from office at any time for any reason.”   This pretty much guarantees the the three basics will not be met.

The present “Public Advocate,” Dave Bonar, is an old hanger-around in Delaware politics.  He’s been a PR person for the Senate Democrats, he’s been a reporter for the Delaware State News, he’s been the PR person for the PSC itself.  He’s been a motorcycle cop for the City of Dover.  He’s on the Dover City Council.  Bio here.  In 2013 he was listed as a lobbyist for the Delaware Volunteer Fireman’s Assoc and the Delaware Association of Surveyors. He’s a pleasant guy, but a boat-rocker he is not.  He recently told Green Delaware that the Public Advocate’s budget is around $800,000.

Delaware has a special problem these days named Jack Markell.  Markell is a smart guy, and knowing that billions of dollars flow through regulated utilities, he’s using them to fund his schemes and scams-such as the “The Bloom Energy Rip Off.”  Thus, it makes a certain perverted sense that he’d want to keep the public out of the Public Service Commission.  Doubtless there are more ripoffs in Black Jack’s pipeline.

Anybody, for the most part, can comment on PSC proceedings.  To be an “intervenor” is a higher level of involvement.  It means being, theoretically, on the same level as the other players such as the utility applicant, the PSC staff, etc.  (The Public Advocate can intervene by right, but does not have an obligation to intervene in any particular proceeding.

So when Reps. Kowalko and Osiensky say they want to “intervene” they are saying they want to be real players, not bark from the sidelines.

It’s not unknown for the Public Advocate to oppose an intervention.  I have had the experience myself, when Pat Stowell was “Public Advocate.”  The usual reason is that a truly independent intervenor might oppose deals being cut.

Now, I’ve been an intervenor in Delaware PSC proceedings.  I gave it up upon learning that the political clout of the utilities would generally override any factual case one could make.  Example:  in an “Integrated Resource Planning” case of Delmarva Power, we got Delmarva’s own models to show that the lowest-cost scenario involved meeting all future increases in energy needs via conservation and efficiency.  (This was about as obvious twenty years ago as it is now).  Didn’t matter:  The PSC went ahead and approved the plan that aligned with the Delmarva Power business plan.

Another lesson learned:  Most of the time–not always!–intervenors are really there to shake something out of the utility for themselves or their clients.  This could be something of public benefit, but all too often they are there to shake down the utility for the price of their going away.

Many Commission members and staffers do the best they can given the chokehold the utilities have on the process.  I have a pretty good opinion of Bob Howatt, Executive Director of the Delaware Public Service Commission.

They typical pattern is that the utility will ask for twice what it expects to get, gets half of that, and everybody sort of declares victory.

In the event that, say, Delmarva Power gets significantly less than it really wants, the commissioners know Delmarva is likely to go to the courts and/or the General Assembly…

Dave Bonar is taking things to a new level by saying he opposes all interventions categorically.  HE wants to be the gatekeeper of access to the PSC.  Shame on him.  Shame on Black Hat Jack.

public.advocate@state.de.us

302.857.3660

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