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Let the ratepayers eat cake

As the lead plaintiff in the suit (just denied) challenging the Arizona Corporation Commission’s right to mandate that utilities generate 15 percent of their power from alternate energy sources, I must admit that I felt a little odd when I was sitting in the Arizona Public Service rate hearing a couple of weeks ago.

I was one of the last to testify and, after hearing many ratepayers complain about having to pay higher rates and after listening to the commissioners fall over themselves trying to assure the ratepayers that the commissioners were doing everything they could to prevent rate increases, I got up and reminded the commissioners that they could completely eliminate the need for a rate increase by simply reversing their decision to impose the 15 percent mandate on the Arizona utilities.

The experience reminded me of the joke about the politician who stands up and rocks the boat and then says he can save you from the storm – by sitting down.

If only the Corporation Commission members would just sit down. But, of course, they won’t.

Lord Acton was right when he observed that “power corrupts and absolute power corrupts absolutely.” Corporation Commission Chair Kris Mayes is a classic example. She obviously thinks she is smarter than the utility company executives and smarter than the ratepayers and smarter than the free market. That is the only logical conclusion one can draw in trying to find a reason for her belief that the Corporation Commission should expand its already pervasive powers by making decisions regarding what sources of power should be used to meet the utility customer demands. These are decisions that should clearly be made by utility executives and made in consideration of prevailing market forces.

Frankly, the Corporation Commission could be abolished and the companies it regulates could be allowed to compete. The non-regulatory functions of the commission, such as those exercised by the Corporations Division, could be transferred to the Secretary of State’s Office.

Residents of Arizona will remember that we almost achieved deregulation several years ago, but it was called off after the deregulation disaster in California. This is unfortunate because what was done in California was nothing close to deregulation. It was rather “reregulation” in a most stupid and unproductive manner, much like the supposed deregulation of banking, which liberals love to blame for our current economic woes but which was actually just another example of reregulation being done in a way that would satisfy some political constituency rather that in a way that allowed free markets to work.

As a staff member at the Corporation Commission 30 years ago, I spent some time studying the effects of regulation. I also was a student of regulatory economics in my MBA program where I approached the subject from a purely academic perspective. From these real world and academic experiences I can confidently say that, if there ever was a need for the Corporation Commission’s regulatory authority, it has long since passed. We should get out the wooden stake and the mallet. This vampire has sucked enough blood out of the Arizona economy.

— Roy Miller,

One comment

  1. Are you interested in running again, Roy?

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