Monday, August 26, 2013

REPORTER JOHN GUERRIERO PLAYS DOWN BIG ELECTRIC RATE HIKE AS TIMES-NEWS SUCCUMBS TO 'SACRED COWITIS'


 By JOE LaROCCA

jlar5553@verizon.net

Several weeks ago, First Energy, the parent company for Penelec which provides many western Pennsylvania businesses and homes with electricity, announced a rate increase of about 25 percent.  The story reporting the rate hike was written by John GuerrIero, a long time Times-News reporter. 

Quotes attributed by Guererro in the article to a Penelec spokesperson tended to minimize the  rate increase, as did Guerriero's reporting. In that context, it didn't seem extravagant.  But coming on top of a similar rate hike about a year ago places it in its true perspective, something Guerriero failed to do.

I pointed out his glaring omission in an e-mail to the reporter, but he predictably ignored it, despite the fact that it's big news, and will wreak economic disaster on many low income consumers, small business owners, and drive big businesses, like GE, out of the state.

To attempt to compensate for Guerriero's failure to tell the whole story, I wrote what follows for a column and submitted it as a "guest contributor" to the Times-News through the "public editor," Liz Allen, for  publication. Allen  was initially enthused about the column and told me she'd scheduled it for "potential publication." But that was more than a month ago, and it has yet to see daylight.
 
I assume that, with due deference to former congressman/governor/homeland security secretary Ridge it succumbed to a viral strain of "sacred cowitis".  

While these cumulative rate hikes have fallen like bricks on Pennsylvania users just within the past couple years, they had their genesis during Tom Ridge’s first term as governor back in 1995. It’s one of Ridge’s hidden legacies, a ticking time-bomb just emerging from the shadows of his two-term gubernatorial stint in the 1990s.

A product of the law of unintended consequences, it’s the reversal of the regulation of electrical rates throughout the commonwealth which Ridge sponsored and championed as governor in the mid-1990s.

The return to unregulated electricity rates over the past couple years completed the triple whammy of energy consumer cost explosions, exacerbating the adverse economic
impact which has followed the dramatic increases in gasoline and heating fuels.


Depending upon location within the state, electric rates soared by anywhere from 12 percent to 72 percent during the past two years, with a statewide average of more than 40 percent. Here in Northwestern Pa, they’ve risen by some 50 percent.

It was just about two years ago when the rate caps imposed by the Electricity
Generation Customer Choice and Competition Act - signed into law by Ridge in 1996 after a robust campaign promoting it - expired.


That’s about the time the Pennsylvania Public Utility Commission (PUC) released its study on consumer costs of electricity. The study found expiration of the rate caps would give rise to the cost of electricity in Pennsylvania virtually overnight by an average of 43 percent, imposing a calamitous burden on home, commercial and industry users.

The spike in electric prices is highest in the western part of the state, where they have risen or are rising by as much as 67 percent in Allegheny County, and 50 percent in northwestern Pa., according to the PUC.

Some experts predicted in 2011 that the deregulation scenario, over time, would precipitate an
exodus of industry and commerce from Pennsylvania, already seen with the exit a couple years ago of Steris Corp, and most recently GE’s announcement that it would relocate more than 1,000 jobs from its Erie plant to a new facility in Fort Worth, Texas. While other rationales have been given, rising electrical costs have doubtless played an unspoken role.


They were also expected it to cause hundreds of small businesses throughout the commonwealth to fail, result in more unemployment, and further impoverish low income residents. These were effects Ridge‘s 1996 dereguation law was supposed to forestall, not precipitate.

This came about because the law also enables electricity producers to charge
rates based upon their costs of production and delivery. Prior to deregulation they could not recover those costs through proportional rate increases because of the ceiling placed on rates by the 1996 act, signed by Ridge in the wake of a high-visibility promotional campaign.

But when the caps came off at staggered intervals throughout the state starting in 2010/11, electricity producers were able to charge rates which reflect their costs of acquiring the fuels needed to generate electricity – primarily oil, natural gas and coal. Those costs have risen exponentially since the electric rate caps were first applied in 1997.

Normally, the powerful electricity-producing lobby would have been able to thwart passage of legislation in 1996 regulating and capping electrical rates. But what gave regulation its impetus in the mid-90s was a disarming Faustian bargain between the popular Ridge administration and the general assembly on one hand, and the electric industry on the other, the unintended consequences of which only recently began to appear.

This cozy arrangement provided that in exchange for acquiescing to rate caps, the
industry would be allowed by the state through the PUC to bill and recover from consumers the costs of constructing new electrical generating plants, a practice previously disallowed, according to the PUC..

Ridge’s rationale centered on the theory that lower electrical rates than those in other states would attract new industry to Pennsylvania, produce tens of thousand of new jobs, and give rank and file Pennsylvania users more affordable electricity.

In the first years following deregulation, Pennsylvania surpassed other states in electrical rate-lowering, ranking first in the nation. In a February 7, 2001 press release Ridge said: “Once again we were named the No. 1 state for electric deregulation. Why? We have plenty of juice…we’re plugged in. Customers have greater choices. And consumers and businesses have saved $3 billion.

“So if any companies in California are listening,” Ridge exulted, “come on
over to Pennsylvania. We’ll leave the lights on for you.” Ridge said at the time deregulation “will create more than 36,000 new jobs in Pennsylvania by 2004.” That never happened.


Ridge’s theory was based on the optimistic premise that the capped rates would bring new electric-producing competitors into the state and reduce rates overall through wider competition. The flaw in the theory was that it self-destructed.

Newcomers couldn’t compete in Pennsylvania with the big existing producers. Even with the rate caps, existing producers were able to generate healthy profits since regulation went into effect 16 years ago because of the absence of new competition. Wth the unshackling of the rate caps over the past couple years, they have made a killing of unprecedented proportions at the expense of consumers.

How is retribution exacted from a former governor whose failed vision nearly 20 years after the fact results in punitive consequences on an unprecedented scale for his onetime constituents? By elevating him, apparently, to one of the nation’s leading cabinet level positions, widespread celebrity, and other lucrative career moves.


 


 

Sunday, August 25, 2013

TIMES-NEWS 'PUBLIC EDITOR' LIZ ALLEN IGNORES RESPONSE TO COMMUNITY COLLEGE CRITIC

Following the publication of my op ed piece in the Times-News proposing that Butler Community College be invited to set up a satellite campus in Erie County, the paper published an ad hominem attack on me by someone from Corry named Steve Bishop whom I don't know. In response I wrote the following and sent it to the Times-News'   "ublic editor" so called, Liz Allen for publication. That was more than a month ago, but Allen has ignored it.

By JOE LaROCCA

In his June 27 ad homenim assault on me, (Erie County Still Needs a Community College), Steve Bishop, director of the somewhat nebulous “non-profit” Corry Higher Education Council, devoted more than 800 words to rebut my 148-word letter to the editor (June 1) in which I attributed outgoing County Executive Barry Grossman’s failed reelection bid to his aggressive support for the Erie County community college he proposed.

His proposal failed because of real concerns that it would lead to an increase in county property taxes, a concern that can be ruled out by accepting an offer by the widely-respected Butler, Pa County Community College to establish a campus in Erie County like those it has successfully established in five other northwestern Pa. counties.

Not only would it negate the need for increased taxes; it could be much more quickly brought to operational status in order to meet the immediate need for training skilled workers in Erie County than building an Erie County facility from scratch.

Bishop wrote: “Kathy Dahlkemper, Grossman's opponent in the May 21 municipal primary, had earlier espoused support for a community college,” thus implying that it didn’t compromise her election campaign success. “In addition,” he wrote, “the community college was barely mentioned by either of these candidates during the campaign,” thus debunking his own point, while making mine.

Both Ms. Dahlkemper and Mr. Grossman had supported his proposal for the community college last year when it appeared to be politically correct prior to its rejection by county council. But both backed down from it during this year’s election campaign after it had become clear that it was political poison primarily because of its implications for prospective county property tax hikes and dramatically lowered expectations for surplus county casino revenues.

But it was too little, too late for  Grossman. He had invested tons of political capital in his ill-advised scheme from the bully pulpit of his county office last year. He was too closely identified with the community college backlash to escape its fateful electoral consequences. He lost. Ms. Dahlkemper, on the other hand, kept a discreet rhetorical distance from the community college. She won.

Bshop acknowledges that “There would, in fact, be a cost to taxpayers, but,“ he writes, “ I've done the math and it would represent a very marginal increase in county taxes.” He doesn’t bother to offer us “the math“, nor tell us how “marginal.” But the reality is that any property tax increase within a depressed economic environment where they should be reduced (fat chance), not increased, is unacceptable.

Mr. Bishop is dead wrong when he writes that “the Erie region is not only at a significant competitive disadvantage to the other populated areas of Pennsylvania with community colleges, but also to virtually every city of size in the nation.”

As I wrote in my column here the other day, our county is fortunate to have within a couple hours drive south on I-79, one of the finest community college systems in the nation, Butler County Community College. It has been in existence for half a century, and has offered to establish a sattellite campus here in Erie County like the highly successful ones it has already established for five northwestern Pennsylvania counties - besides Butler, Elk, Crawford, Jefferson and Lawrence.

Bishop has completely ignored my call for a partnership between Erie and Butler counties to establish a first-rate campus here keyed to Erie County‘s low cost and affordable post-secondary vocational and academic needs. It would require no expenditure of county property tax or any other revenues, but would be supported primarily by student tuition fees.

For purposes that can only be described as chauvinistic, Bishop and his ilk insist on establishing an Erie County-built, owned and operated community college from scratch, which would take decades to infuse with a learning curve already greatly surpassed by Butler CCC. For them, it’s either that or nothing, which causes one to wonder what their real objectives are. What motivates them? Public interest and service - or self-interest and service? (Would you like to be chancellor or president of Erie County Community College, Mr. Bishop?)

Taking my words out of context, Mr. Bishop writes: “LaRocca is wrong that Erie County has "ample higher education options,” citing high cost local private for-profit trade schools and state and private collegess and universities. He carefully omits my qualifier “without building a separate empire at taxpayers' expense.”

Among other alternatives, of course is the Butler CCC scenario, with its minimal life cycle maintenance costs and its considerably lower-cost, affordable curricula., which Mr. Bishop so steadfastly ignores.


A COMMUNITY COLLEGE FOR ERIE COUNTY

(Author's note: This column was initially published as an op-ed piece in the Erie Times-News).
 
By JOE LaROCCA
 
While there’s significant opposition to an Erie County Community College, there is likely to be strong support on behalf of a community college for Erie County.
By that seeming paradox, I mean that Erie County should not establish its own community college dependent upon increased property taxes. It can acquire one without starting from scratch with minimum expense that would not require taxpayer support, as did the failed one proposed by out-going county executive Barry Grossman and his followers.

Community colleges are a positive force wherever they exist, and would prove to be so in Erie. But the threshhold consideration here is that this county’s property taxpayers cannot afford the one proposed by the county executive. Especially when there’s another more realistic and palatable option which would be supported primarily by student tuition.

This promising alternative stems from an impressive presentation made in Erie about a year ago by Butler County’s sprawling and widely-respected community college system offering to establish a satellite campus in Erie like those highly successful ones it has already placed in Lawrence and Mercer counties. And this year it opened a new one in Brockway serving four counties: Crawford, Clearfield, Elk and Jefferson.

Unfortunately, that alternative was summarily rejected by the proponents of an Erie County-established, owned and operated institution, which would have been a redundant exercise in empire building.

Under the Butler model, the set-up, operation and maintenance of a community college in Erie by an operator with long-proven competence and success would cost the county far less than establishing anew a full-blown Erie County community college.
 
Butler CCC has been in existence for 48 years building invaluable expertise it would take decades for Erie County to accrue. Strategically structured, a Butler-facilitated community college in Erie would avoid the need for new property tax revenues. Its curricula could be designed to meet the educational and vocational needs of Erie Countians. Face-to-face, online and hybrid courses could be offered both full and part-time, with an open admissions policy requiring only a high school degree or GED.

If Erie County political, industrial, educational, vocational and business leaders are genuinely committed to providing affordable post-secondary education for county residents and workers designed to foster a long-term economic and industrial renaissance locally, they should direct their joint efforts towards exploring a partnership with Butler County Community College much like those Butler has successfully instituted in other northwestern PA venues.
 
 
 

 
 






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THE DECLINE OF ERIE, THE TIMES-NEWS AND PAT HOWARD: A PARALLEL UNIVERSE

by JOE LaROCCA

In his recent Sunday column,  "Data shows (sic) Erie region drifting in wrong direction," it's no surprise Pat Howard would blithely ignore the obvious  parallel between the Erie region's demograph-driven economic decline, and the total disintegration of the Times-News as an instrument of legitimate community communication and interaction.

Pat relishes telling it like it is only where other entities and institutions are concerned, while ignoring the one for which he is the self-anointed spokesperson. The lofty pretensions of the Times-News fail to mask the pernicious intellectual corruption, morale and ethical breakdown that has infected the Times-News generally for decades, with a few bright exceptions that prove the rule.

In this column, wherein he profiles the demographic decline of Erie County broadly, and more specifically, the city of Erie, Howard notes that the county's population has remained level , while the city's is close to sinking below 100,000 for the first time since the Roaring 20s..
 
These and related trends, Howard pontificates, "have been enabled by a political culture that's been chronically incapable of shaking off the corrosive inertia reflected in the data,"  a culture for which the Times-News has ironically served as a model, and Howard its personification.
 
One example of this culture, according to Howard was the failure of outgoing County Executive Grossman "and his allies" to establish a proposed Erie County community college last year during his first  and only term.
 
What Howard fails to mention is that the Times-News and he were Grossman's most  prominent of allies, devoting acres of newsprint and gallons of printer's ink to a relentless barrage of editorials and biased news stories pushing for the community college rising to an hysterical pitch, while suppressing the mass of voices opposed to it, and who nevertheless won out.  
 
The reality which Grossman, the Times-News and Howard blindly ignored was that county taxpayers could  not afford the hefty increase in property taxes the proposed community college  would engender, a reality which led a majority of county council wisely to vote it down.
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 

 

 

 

 

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