Too many conflicts at the Public Service Commission
Missouri Public Service Commissioner Jeff Davis is a walking conflict of interest. Since 2005, he’s been involved in four incidents that raise questions about his objectivity and that of the utility regulatory body on which he serves.
In a tearful 2007 interview with the Post-Dispatch editorial board, Mr. Davis promised to “change the way I do business.”
He has not. Two of the four incidents have come to light since that interview. The most recent, involving a 17.5 percent rate hike request filed by Kansas City Power & Light, occurred just last month.
Last week, lawyers for large industrial customers of the utility filed a motion asking Mr. Davis to remove himself from the case. That’s not enough. His pattern of scoffing at the rules demands that he step down or be fired.
Evidence in utility rate cases is supposed to be introduced during public hearings. All parties — utilities, the Office of Public Counsel, which represents ratepayers, and attorneys for large industrial electric customers — are supposed to have a chance to ask questions about the evidence or testimony or object to it.
But on Feb. 3, Mr. Davis asked the PSC staff, which is a party to the KCP&L rate case, for information about the utility’s 2007 earnings.
That’s crucial to deciding the case. But because accounting rules are very complex — governing, for example, what expenses can be charged to the regulated utility and what must be charged to its for-profit holding company — it’s also a contentious issue.
Consumer advocates in Kansas, where the utility filed a similar rate case, have objected to $1 million in spending charged to the regulated utility. It includes money for golf outings, amusement park admissions and tickets to Kansas City Chiefs and Royals games.
If those are accepted as legitimate expenses, they would be built into the rates and charged to utility customers.
It’s inconceivable that the same issue won’t come up in the Missouri rate case. That is why any testimony about the utility’s earnings should have been presented during a regular hearing with all the parties present.
Instead, figures that came from just one party were distributed by Mr. Davis to other commissioners.
Mr. Davis disclosed his request for information, and the response, in a legal filing called an ex parte notice. Such notices are supposed to document inadvertent communication between commissioners and someone who’s not involved in the case, as when an angry rate payer calls to object about a proposed rate hike.
But the KCP&L earnings request wasn’t inadvertent. Nor did it originate with someone who didn’t know better. That makes it much more serious.
Any commissioner who’s served as long as Mr. Davis — he was appointed in 2004 and served as chairman from 2005 until last month — should know better. Indeed, just last year, he wrote a report to then-Gov. Matt Blunt and the Legislature on the very rule he now is accused of violating.
Mr. Davis is paid $105,000 a year to be objective. His continued inability to follow the rules makes him unfit to serve. Gov. Jay Nixon should launch an investigation. He or the Legislature can remove Mr. Davis from office.
Citizens must be confident of the PSC’s objectivity. Right now, that confidence is not justified.
> In a tearful 2007 interview with the Post-Dispatch editorial
> board, Mr. Davis promised to “change the way I do business.”
Funny thing is, Rod Blagojevich did NOT have a “tearful interview” with the editorial board, and you still endorsed him. And to this day, despite his rather blatant failure to live up to your hopes, the editorial board has remained silent.
I guess Mr. Davis’s problem is that he holds a non-partisan position. If he was a crooked Democratic governor - or, for that matter, a Democratic congressman who was caught patronizing a non-union roofing company - we wouldn’t hear a peep out of you.
Let’s see… The Fourth Estate in these parts has
taken huge gulps of the “power own” advertising
campaign money and then they purport to have no
conflict of interest in reporting on things like
how fast the wind was *really* blowing when there
were huge power out[r]ages.
Go report on that–it’s been obvious for years the
public “service” commission serves the public like the Kanamits served Man in the classic Twilight Zone episode, To Serve Man. The charter of the Public Service Commission must be more in the nature of a sort of cookbook in how to prepare us to be served-up on a silver platter to the Utilities.
It’s long past time for those who want to report to the electorate on issues like this or political things to divest themselves of their conflicts of interest.
It’s common knowledge that a candidate must spend huge sums of money with “the media” in order to get elected, but why? Who the hell ever voted for a candidate because of one of those ads they saw?
If they did, how do they find their way to the toilet in the morning without someone leading them by the hand?
The point is that the ad money spent in “the media” is bribes put out to the self-same entities which then decide ho w often to let us know things like that our current Vice Commie-stooge has gone around for years talking about “a guy who drinks his lunch instead of eating it” in regard to a regrettable incident where his first wife decided not to wait to pull out into traffic and pulled out in front a a truck which could not have stopped if The Incredible Hulk had been stomping on the brakes–it was just too late.
Or on how Commie-stooge-in-chief really came to get his mansion. I think we heard a lot more about how McCain didn’t know precisely at any given time how many investment properties he owns, though there was obviously no question about how he got the wherewithal to invest in them, else we’d have heard about that until the cows came home.
The media were already pro-bama biased. Add to that all the ad revenues to play some of the most stupidly
crafted and conceived political ads I’ve ever heard, and you’re guaranteed that we didn’t hear near what we would have heard if there’d been the stame types of questions about how McCain got so many as even one house.
I don’t want to hear anyone in the corrupt media whining about someone’s conflict-of-interest until the only media outlets which carry “hard news” about politicians and their issues accept NO, ZIP, ZERO political ad campaign money.
Let me ask you folks: How many car ads are you seeing now that the car companies are whining to have “your” representatives rob your back pockets to pay their worker’s pensions and lay-off benefits? Are you getting your information about the issue from the same venues where you see the advertisements?
But of course, that’s no conflict of interest. Dick Cheney could not possibly be objective about issues affecting the bottom line of Haliburton because he’d served on their board prior to attaining office in a job that affects their monetary well-being, but all these venues that tell you about these things can take railroad cars full of money from the very industries on whose behalf “your” representatives are acting, with very little in the way of critical analysis being presented in the media.
Go figure.
Urban,
The medicine doesn’t work unless you take it every day.
I don’t understand the severity of exactly what the PD is accusing Davis of doing wrong in this case. The editorial states that he asked the PSC staff, which I understand work for the commissioners, for information regarding KCPL’s earnings in preparation for a rate case. I don’t fully understand why the PD feels this is a firing offense. I ask my underlings at work for various information and analysis all the time and it’s considered normal operationing procedure. It’s not like he took money from one of the parties involved (it does remind me that the PD supported Blago until almost the very end despite the fact that his curruption was clear to everyone).
Either this editorial is just poorly written or I’m missing the controversial issue. I honestly believe the driving force behind the antagonism that the Post Disgrace has for Davis is the fact that he has been more balanced towards the utilities in Missouri than his predecessors. It is also no secret to anybody who was involved in utility regulation during the 1990s and 2000s that Missouri regulation was considered one of the most anti-utility of any state in the US prior to his appointment. This was largely driven by the fact that the PSC was stacked by Carnahan with former state reps who were term limited and loved the ability to get a juicy commissioner job paying $100k/year. As former Democratic politicians, they reflexively opposed any rate hikes regardless of what was happening to utility costs. Once Blunt appointed Davis and a few other more balanced commissioners, the PSC became more balanced and the Post Disgrace has been pissed ever since. Let’s not forget that even in this case, Missouri does not have pro-utility regulation by any means as shown by comparing the allowed returns on equity and the allowed equity content in their capital structures to utilities in other states. However, the PD editorial page has been on the rampage regardless. I can’t quite understand if the editorial writers are stupid or just anti-utility leftwing zealots or both.
Additionally, it should be pointed out that the MO PSC staff is an incompetent, anti-utility group of morons. From my direct observation of their filings, it is clear that they largely lack any understanding of the basic principles of finance. If it weren’t for the fact that the commissioners just ignore them, every utility in the state would be bankrupt by now. So please explain why they are even employed.
I strongly believe that more competent reporting by the Post Disgrace regarding utility (especially power companies) issues, especially utility regulation, would be beneficial from everyone involved.
It is quite clear that the PD has an anti-utility bias that will only be corrected when the end results are much higher power rates in the long term, by power shortages, or by the MO utilities being taken over by higher valued utilities. This is another reason that I don’t believe I can believe anything written by the PD. I am a financial professional who has been actively involved in the utility industry for many years and I clearly see that what the PD reports regarding utilities is distorted and largely incompetent. It therefore makes me also wonder about its reporting in other areas where I don’t have such an intimate understanding of the facts.