Electric screwdrivers, smoking guns and smokescreens
From the 9-26-99 Daily Sparks (Nev.) Tribune
The first bitter fruits of electric deregulation have blossomed on the corporate money tree. Sierra Pacific Power and its Gomorrah South bride-to-be, Nevada Power, are currently earning $48.1 million a year in excess profits. The illegitimate orgy is likely to continue for the next three years.
Privately owned utilities once accepted regulation for the privilege of operating as a monopoly. Regulators would establish a profit ceiling based on generally accepted standards of what constitutes a fair rate of return for stockholders. Anything over the ceiling had to be refunded to ratepayers.
Now, in a move chillingly reminiscent of cable television deregulation, the electric hogs have the best of both worlds: no regulation and no competition.
Our lawmakers never take into account that corporations usually have smarter lawyers than governments. That's how tobacco companies hornswoggled state attorneys general into taking a piece of the "national tobacco settlement" to be paid from future industry profits. State governments thus became partners in the drug addiction of teenagers.
Cable TV lobbyists got their industry deregulated on the blue smoke and mirrors promise of competition from those big, bad phone companies. So what's happened? Phone companies have been merging with cable providers, not competing with them. Deregulated rates have skyrocketed.
Anybody with the brains of a bantamweight flea should have looked at how cable companies practiced the art of non-competition for years. Here in the Truckee Meadows, TCI Cable and Continental Cable willingly yielded to each other when a peripheral service territory came up for grabs.
Why? Because offering competitive rates has never been their business. In the few areas of the country where true cable competition exists, prices plummet.
The most egregious aspect of the electric utility windfall was its principal defender, Sen. Randolph Townsend, R-Reno. He admitted to the Las Vegas Sun's hardassed capital reporter Cy Ryan that the legislature knew this would happen when it passed enabling legislation.
For two decades, my old friend Randolph has been politically bulletproof because of the pro-consumer image I helped create for him between 1978 and 1981. Back then, he was indeed pro-ratepayer. Strange things happen to some people once they get elected.
Things will get even worse, according to Deep Tax, my government insider. Deep Tax says that new laws which changed utility taxation will exacerbate the movement of the tax burden onto residences and away from big business.
Public utilities pay a lot of property tax. Because of two boring bills passed this year, utilities will over time avoid a lot of current taxation, forcing counties to jack up yours and mine.
"We have no tax policy in this state," says Deep Tax. I disagree. Our policy is to stick it to the little guy and benefit corporations.
The goal of utility deregulation in Nevada is to give unjustifiable volume discounts to big users like casinos and gold mines. Sen. Townsend and I attended the same seminars on utility ratemaking, but he long ago converted to the fallacious corporate mantra that it costs less to serve a big user. He knows better and his public change of positions proves it.
No less than Gov. Dudley Do-Right has affirmed that Deep Tax is correct. Recognizing that we have no tax policy in this state, Kenny Guinn leaked to the media that he would make a major policy announcement in his January state of the state address.
Something or someone apparently stopped him. At showtime, he meekly announced a two-year survey of well-covered ground. Recent reports out of Las Vegas say the gambling industry now wants a sales tax on services, everything from tax preparation to dry cleaning and car washes. Anything but a gaming tax increase.
Ironically, a little-known Guinn administration study published August 25 makes a compelling case that gaming is not paying its fair share of taxes for the growth it causes. The Nevada Commission on Economic Development has not posted it on the web, but I have.
I have seen to it that Sen. Joe Neal, D-North Las Vegas, got a copy in order to bolster the case for his initiative to raise Nevada's lowest-in-the-world gaming tax.
DON'T DO AS I DO, DO AS I SAY. Las Vegas Mayor Oscar Goodman last week ran a misdirection maneuver from the Jeff Griffin playbook. For the past couple of weeks, Las Vegas city hall insiders have touted an unpublished study purporting to show the cost savings of deconsolidation of the Clark County Metro Police Dept. Goodman now gulps that the study does not exist.
Reno Mayor Griffin did the same thing awhile back. I printed his own statement from a KOLO TV-8 interview saying the city had done a study showing that the Truckee Meadows could support only 34 movie screens. We will soon have more than double that number, proving that the downtown Regal Cinemas have little chance of profitability. This means that the city will never get back its $6 million corporate welfare investment which built the theater. When asked for the study, Griffin said it didn't exist.
Last week, he also espoused open government on a greenhorn's talk radio show. No one brought forward his record of secret meetings at below-quorum strength as a way to get around the state open meeting law.
Get out the smoked fruit and hurl at will.
Be well. Raise hell.
© Andrew Barbano
Andrew Barbano is a member of Communications Workers of America Local 9413 and editor of U-News, where the past three years of columns may be accessed. Barbwire by Barbano has originated in the Daily Sparks Tribune since 1988 where an earlier version of this column appeared on 9/26/99.
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