Imagine what would happen if one of the candidates for governor, either Nathan Deal or Roy Barnes, proposed raising state taxes by $1 billion.
That candidate would be burned to a crisp in the ensuing political firestorm. He would be denounced from one end of the state to the other by newspaper columnists and talk radio hosts for talking about a tax increase during the worst recession since the 1930s. His chances of winning the governor's office would be zero.
The members of the Public Service Commission, who also run for office statewide, will take a vote later this year to allow Georgia Power Co. to raise its electricity rates by more than $1 billion. That $1 billion will come out of the wallets of every Georgia Power customer as surely as if some politician had raised their taxes.
There don’t seem to be many people getting upset about it, however. There have been some who showed up at PSC hearings to express concerns about such a large rate increase, but I haven’t seen any Tea Party protests and no one is threatening to throw any PSC members out of office.
Let's imagine another scenario. Suppose you found out that your local legislator had introduced a bill to raise taxes by $1.6 billion. Let's also imagine that the bill was written so that large businesses and industries wouldn’t have to pay that tax increase; it would only be imposed on homeowners and small businesses. I think you would be a little irritated, and you might even vote that legislator out of office the next time you saw his name on the ballot.
That’s not imaginary. It happened less than two years ago.
During the 2009 legislative session, Sen. Don Balfour, R-Snellville, introduced a bill requested by Georgia Power that allowed the utility to start charging customers an extra monthly fee for two nuclear facilities it planned to build. Those nuclear plants won’t generate electricity until 2017 or later, but the bill allows Georgia Power to start charging customers an extra fee for them six years in advance.
The bill was amended by lawmakers to exempt large business and industrial users from having to pay their part of this $1.6 billion in monthly fees. Gov. Sonny Perdue, whose chief of staff once was a Georgia Power lobbyist, signed the bill into law.
The passage of that bill was reported in most of the state’s newspapers, but I don't recall the general public getting very upset about it. The voters in Balfour’s district obviously did not mind; he is expected to win re-election to another term in November.
It is a fact of Georgia politics. People say they oppose higher taxes. Public opposition to tax hikes can become so intense and emotional that most legislators are afraid to even mention the possibility of one.
But if you vote to allow the state's most powerful utility to increase its rates by an amount larger than any tax hike, that’s OK.
That $1.6 billion in monthly fees that Georgia Power still start charging next January will have the same financial impact on your wallet as a $1.6 billion tax increase. The same goes for the $1 billion rate hike that the PSC will adopt later this year. It may not be called a "tax increase," but if you’re a Georgia Power customer you will have no choice but to pay it.
This is not to say that Georgia Power should never get a rate increase. The utility has invested billions of dollars to build power plants and transmission lines, and it is entitled to earn a fair rate of return on its investment.
Our elected PSC, however, has become basically a pass-through agency, with most of its members voting routinely to rubber-stamp whatever Georgia Power requests.
PSC members are elected to provide oversight of the utilities and ensure that ratepayers are not being gouged, but most of them barely bother to check that the money is being spent prudently. Why should they? The voters obviously don't care, even though they’re going to be paying billions of dollars as a result of actions taken by the PSC and the legislature.
That sounds a little strange to me, but that's Georgia politics.
Tom Crawford is the editor of Capitol Impact’s Georgia Report. He can be reached at email@example.com.