Issue Position: Public Service Commission

Issue Position

"A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." -- Thomas Jefferson

Though there are many regulatory agencies in Charleston which create havoc and harm to commerce and jobs in West Virginia, perhaps the most notorious of these is the Public Service Commission--and I have taken issue with this particular agency since my time in the House of Delegates.

The Public Service Commission regulates utilities and other "services" in our state, and over recent years, it has expanded its power to new extraordinary heights. At the expense of the consumer, the Public Service Commission has granted monopoly-privileges to different politically-connected companies in a whole host of industries, and the Constitutional Government Inflation Term Limits Economic Growth Special Interests Public Service Commission Vote Swapping Constituent Services Life Second Amendment
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Over the years, the Public Service Commission has granted price-hike after price-hike on electricity service and the delivery of natural gas in West Virginia, benefiting the established utility companies at the expense of residents in our state. These price hikes often times hurt senior citizens and those groups on fixed incomes the most, because these groups have little room in their budget or savings to pay these forced rate increases. Some say these rates hikes are both necessary and proper, for prices in the market are going up and thus, increases are justified. I understand this argument, but the problem is, it is impossible to deduce. In other words, no one individual or body in Charleston can truly possess all the information in the market to determine what the price "should be". This is why central economic planning fails over and over again. Under a free market system, there would be no Public Service Commission. Prices in market exchange are determined between the consumer and the producer. And thus, here is the key--long ago, our state government essentially made a deal with large producers of electricity and gas. Control of prices in exchange for "monopoly-privilege", or the exclusive right to keep out competition (depending on where you live in West Virginia, you do not have a choice over who you purchase your electricity or natural gas from).

Control of prices or "price-fixing" merely gave ultimate government power to the large utility companies, and the mechanism that this takes shape is through the "cost plus" approach. Profits to these big companies are awarded not by the productive efforts of efficiency and competition, but by taking the "cost" of the privileged-business operation, and adding a certain percentage on top--calling this "profit". The only thing is, under the market, prices are set by the consumer, and these alone dictate associated costs from business enterprise. Under an open market in utilities, higher and higher costs could not be passed along on a whim to the customer--because less demand on the product or service being produced would signal to the producer that something is going horribly wrong. Cut your cost or suffer losses. Only our state government has essentially guaranteed profit to these privileged companies, doing so by excluding competing firms--or even the threat of competing firms--from producing within the same territory or market. Established companies can always add more and more "costs" to their operation--and simply tack 10 percent on top. To ensure this process continues--as it has for years--the utility companies have seen fit to stack the Public Service Commission with executives who typically have close ties to the companies they supposedly regulate for "the good of the consumer", high-jacking the force of government for their own gain. Even the so-called "consumer advocate" is appointed by the Public Service Commissioners. In the end though, this is quite typical behavior of government bureaucracies--bureaucrats want bigger budgets and more power, and established businesses learn to give them this power, in return for less competition--giving rise to the all-too-common unholy alliance.

Simply legalizing competition is a good first step to reverse this process of crony-capitalism. This would ultimately permit residents in West Virginia to choose who they wish to purchase electricity or gas from, handing power back to the individual. If prices were to go up because of unseen factors, rising prices would signal more electricity or gas production, and all other things aside--prices would always tend to fall, not rise. More service is produced or more efficient companies would typically enter the market to meet this demand, and gain further customers. This voluntary process not only makes prices more affordable, but it would permit a higher abundance of resources in our state. This accumulation of capital causes a higher living standard in West Virginia--and all the while, more productivity and more jobs.

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