EDITORIALS>>PSC a tribune of the people
The PSC, which is under the new direction of Paul Suskie of North Little Rock, reaffirmed its decision that Entergy Corp. was not entitled to the $106.5 million rate increase it sought and instead had to actually reduce its rates to produce $5.7 million in lower revenues a year. Moreover, the commission said last week, all that rate reduction should go to residential customers.
Here is the effect of the commission’s ruling: Homeowners should see their monthly bills lowered by about 6.7 percent. To understand how remarkable this is, you must remember that starting this summer, Arkansas ratepayers through their monthly light bills are subsidizing customers of Entergy Corp. in Mississippi, Louisiana and Texas.
The Federal Energy Regulatory Commission under President Bush ordered Arkansas to pay into Entergy’s coffers each month enough to equalize the production costs among all the subsidiaries of Entergy. Years ago, Arkansans paid to build the first nuclear and coal generating units in the Entergy system. Those now produce power more cheaply than do the generators to the south of us, which use costlier fuels and produce power from far more expensive nuclear plants than Arkansas’ ANO units at Russellville. Arkansans paid more early on, and now they will pay more again to be good neighbors — very good neighbors — to Louisiana, Mississippi and Texas as their electricity costs rise.
Those subsidy payments would have more than offset the base rate reductions that the PSC ordered, but shifting the reductions entirely to residential customers, along with the reduced costs of generating fuel, will mean that customers will actually see a net reduction in their kilowatt-hour costs. Industrial and commercial buyers will see reductions, too, but not as large as they anticipated. For residential customers, many of whom face hardship paying for electricity and gas, the PSC actions had real meaning.
Entergy had asked the PSC to reconsider the rate order, first issued in June, and now it will take its case for higher rates to the Arkansas Court of Appeals. The PSC lowered its allowable profit rate and also rejected some $30 million of annual expenses and perks for top executives that the company wanted to build into its rate base. They included stock options, bonuses, country club dues, golf vacations, sports tickets, catered parties and personal financial advice. Without those things, the company argued, some of its top executives might be lured away to other jobs and the loss of managerial talent would hurt customers. The threat was that another company might hire away Entergy’s CEO, whose compensation last year was limited to $18 million, and he might be replaced by someone who was not as smart or lacked his marvelous managerial abilities.
We have Paul Suskie to thank for rejecting such nonsense, which in other times and other venues actually prevails. A tip of the hat may be in order, too, for the man who appointed him, Gov. Beebe. As a state senator, Beebe was known for his tight relationship with Entergy Corp. Only three years ago, as attorney general, Beebe was secretly intervening on behalf of the big electric companies in a federal suit to allow them to evade environmental responsibilities.
For some men, elevation to high office is liberation. We have more reason to hope that Beebe is one of those.