Another bad idea: selling off state assets with no oversight

This from today’s Capital Times:

The billionaire brothers whose political action committee gave Gov. Scott Walker $43,000 and helped fund a multi-million dollar attack ad campaign against his opponent during the 2010 gubernatorial election have quietly opened a lobbying office in Madison just off the Capitol Square.

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In what should be an unrelated matter, I’m still waiting to hear why Governor Walker’s “budget repair” bill includes a provision for the sale of some state-owned energy facilities; heating, cooling and power plants. There is no need for appraisals, economic analysis, requests for proposals, bids, or any of that other pesky stuff. No approval is necessary from the Public Service Commission on the part of the buyer. If you’re a utility, you can just plunk down the cash and put it in your rate base. If you just want to operate it for a fee, you don’t have to worry about being the low bidder.

So this is a very attractive option. You get a solid customer, a great rate of return and no muss or fuss with the regulatory pitfalls of making sure that utility ratepayers are protected from the abuse of paying for things that they may not need. There’s no need to make sure taxpayers get full value or that the deal makes sense over the life of the facility, either. I mean, really, who cares, right? Just bake it into that bill you’re trying to ram through in a few days and hope that the focus is on other aspects of the legislation (as it certainly has been.)

Just like the guv’s labor initiative in the bill, it’s kind of a throwback to the gilded age. (Isn’t that the same kind of thinking that said we could throw out the Depression-era Glass-Steagall Act a few years back because we didn’t have to worry about the banks or burden them with unnecessary regulations?)

Take a read:

16.896 Sale or contractual operation of state-owned heating, cooling, and power plants. (1) Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).

(Highlighting provided by  🙂

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So the administration will be put into a position to sell any of these assets that it wants to for any price that it feels like and then the taxpayers buy power for whatever the prevailing rate happens to be. Alternatively, the state can enter into a contract for operations for whatever price it comes up with and no prescribed method to do that. But whatever it decides to do, it’s going to be in the public interest and in ratepayers interest (because it says so, right in the bill.)

And just as an aside, the brand-spanking new Administrator of the Division of State Facilities is none other than ousted Democratic Senator Jeff Plale, who provided a critical vote with Sen. Russ Decker in the lame duck session of the legislature to block public employee contracts from being approved — something that opened the door for the present drama right now. (It ranked as one of Walker’s more interesting appointments, along with putting the father of Assembly and Senate leaders, the Fitzgerald Brothers, in charge of the Wisconsin State Patrol.)

Do you see any safeguards involved in any of that? There aren’t any. I may be naïve, but I spent nearly 30 years in the energy utility industry and I’m here to tell you that this is a very bad idea. The consequences are currently unknown and there may be little or no recourse if bad calls are made. It’s dumb.

So maybe this item ought to be carved out of the “budget repair” bill and debated as separate legislation with real, live legislative sponsors and co-sponsors who can explain exactly what it is they’re trying to accomplish. Tell us why this measure serves the people of this state and why the people who are there to protect ratepayers need to be sidelined in any decisions. It might keep cynical people like me from thinking that it looks like nothing more than a sweetheart deal for some political supporters.

Walker and Wisconsin are making international news with the budget repair bill and the radical agenda it encompasses. It isn’t because people all over the world care about Wisconsin’s budget issues, per se. The best take I’ve seen from a talking head on one of the networks so far explains it all: the the governor’s bill wasn’t done by finance people trying to solve fiscal issues, but by political people trying to advance their goals.  That figures.



3 Responses to “Another bad idea: selling off state assets with no oversight”

  1. The states and local governments should sell off any excess assets that they have in land and buildings to put them back on the tax rolls.
    This money should be used to reduce debt, not take care of local shortages in operating expenses.

  2. I agree with you, to the extent that it is actually “excess.” But what we’re talking about is used and useful assets currently in service that are probably saving taxpayers a lot of money on energy costs.

    Also keep in mind that Wisconsin utilities do not pay property taxes on property that is used for making or transporting energy.

  3. Hey Guys, this is a done deal. The Koch Brothers (Walker’s 4th largest contributor) are already advertising for people to run the power plants that they’ll inherit from the Skipper. And remember that Scott also wanted to privatize the Milwaukee Airport, and that “private” entities can give campaign contributions and government entities can’t. How convenient. (No, Dohnal doesn’t get it…)

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