Commissioners Skrmetta, Boissiere prompt investigation into utility companies' response to Hurricane Isaac; Utility leaders to be subpoenaed to testify
Louisiana Public Service Commissioners Eric Skrmetta and Lambert Boissiere today led a 5-0 vote setting an investigative hearing by the Commission to analyze the preparation and response of various utility companies to Hurricane Isaac.
After an extensive discussion in which Commissioner Jimmy Fields originally objected to hiring legal counsel to conduct an independent investigatory review of all utility companies' recovery from Isaac, the Commission agreed to proceed with fact-finding.
Said Skrmetta, "Some utility companies performed admirably while others did not meet the expectations of the consumers or the Commission. The LPSC is the governing body over the utility companies, and we owe it to our consumers to determine if the actions by utility companies before, during and after Hurricane Isaac were reasonable and reliable. We will conduct a fair, transparent hearing so that we may learn more about each company's plan to protect and restore power, and so that we may learn how each company executed its respective emergency plans."
At the peak, the LPSC reported more than 903,000 customers or 43 percent of electric power users with outages. "The limited communications by some companies to consumers, the media and the commission triggered a public outcry for more information and a formal investigation. We will subpoena the leaders of various utility companies to appear before the commission. The commission's finding will be published on our website, and the commission will determine how to proceed from our findings."
The LPSC has the authority to impose remedies if they find a utility company's actions were flawed. Those actions could include:
• Requiring a company's shareholders to bear the cost of improving the quality of service at a reliable level;
• Requiring a company's shareholders to bear a portion of or the full cost of recovery;
• Requiring a utility company to provide certain billing credits to a customer; and/or
• Revoking a franchise license or levying a fine against a company for poor performance.
Skrmetta's decision prompted the first LPSC investigation into utility company readiness and performance since Hurricanes Ike and Gustav. However, this is the first ever investigation in which legal counsel will be debrief government and utility leaders prior to the hearing. Said Skrmetta at the Commission meeting, "I am requesting that the Louisiana Public Service Commission exercise its right to conduct an open and transparent investigation into the practices of the utility providers. I recommend that we use our full subpoena power and employ counsel to help us conduct a valid hearing that calls upon industry executives to explain their pre and post storm strategies."
The action is similar to one taken on Tuesday, August 17, 2010 when an investigation began by the Maryland Public Service Commission into Pepco's East Coast response from a summer storm that left almost a half-million consumers without power. In December of that year, Maryland's Public Service Commission levied a $1 million fine, its largest in recent memory, against Pepco for failing to keep up with tree-trimming and other preventive maintenance that could have limited power disruptions due to storm damage.
The Louisiana Public Service Commission (LPSC) is an independent regulatory agency dedicated to serving the public interest by assuring safe, reliable, and reasonably-priced services for public utilities and motor carriers. The LPSC consists of five elected Commissioners who serve overlapping terms of six years and a main office staff, created by Article IV, Section 21 of the 1921 Constitution of the State of Louisiana. The Commission has jurisdiction over publicly-owned utilities providing electric, water, wastewater, natural gas, and telecommunication services, as well as all the electric cooperatives in Louisiana. The Commission is led by Chief Executive Officer Eve Gonzales, and a Commission Staff that consists of administrative law judges, attorneys, auditors, economists, engineers, professional and clerical support, and rate analysts.
Said Gonzales, "Commissioner Skrmetta led an unprecedented action today, and the Commission unanimously agreed that our utility providers should be investigated for their actions regarding this storm. The utility providers should take this investigation seriously and provide reasonable answers to the questions that were commonly asked before, during and after the storm. The utility providers should also recommend ways to harden their systems so that a storm of Isaac's strength can no longer take such a significant toll on the consumer."
The hearings are set for the next regular scheduled Louisiana Public Service Commission meeting in Baton Rouge. The hearing will be open to the public.