Tuesday, June 17, 2008

Monopoly, Community Wisdom, and LUS

History counts for a lot in trying to understand a community and Terry Huval's commentary in today's Advertiser lashing the railroad monopoly is a good starting point for understanding how history works.

There's been a lot of comment on "conservative" Lafayette could have voted, overwhelmingly, to start its own community-owned telecommunications utility. As a community which relishes confounding the expectations of outsiders we are happy to encourage the perception that we can't be easily predicted.

In truth, what this community calls conservativism has very little to do with what is called conservative elsewhere in this country. (I suggest you spend a few minutes reflecting on Mardi Gras, Festival International, and the multitude of drive-through daiquiri shacks before you too quickly reject that statement.)

We often make reference to our latin heritage in explaining the cultural differences between South Louisiana and the rest of the South or the rest of the country—and that is accurate, as far as it goes. Just "being different" goes a long way toward explaining how a community that takes bold stands understands itself. But more particular histories count as well.

The fact that Lafayette has an LUS — a broad community-owned set of utility systems— makes it different from the adjoining towns. Our experience is different; we have a different history because we've decided to do things, like build a utility, for ourselves. We pay attention to different parts of the world precisely because we can make a difference in how our utilities are delivered--something most communities do not bother to interest themselves in because the cannot change it much.

So nobody here is surprised when the head of our local utility reaches out to repeatedly lash the railroad monopoly.

We don't realize that ideas like these are vanishingly rare in the public conversation of most of our United States:
A recent guest column inaccurately addressed attempts by the Lafayette Utilities System to curb monopolistic railroad pricing....The real issue is that Lafayette is a captive rail customer that has no reasonable choice but to use railroads for coal deliveries to its power plant and has become subject to uncontrolled monopolistic rail pricing power...Rail companies take advantage of customers like Lafayette because they are allowed to do so.
Monopoly corporate power—and the federal government's collusion in maintaining it—is not a topic for discussion in most communities because most communities don't have utilities which are victims of monopoly pricing which are consequentially forced to pass on overcharges to the community they serve:
Due to these rail price abuses, LUS customers and businesses are paying a $15 million premium in electricity costs annually - with a cost share of $1.5 million being paid by our local education system.
And LUS can do something about it on our behalf. Terry Huval has repeatedly testified in Congress regarding the railroad monopoly's exploitive pricing. There, no doubt, having the head of a small southern utility company stand shoulder to shoulder with giant mining corporations, the chemical companies and the oil industry, lends credibility to the claims that last mile monopolies in the rail industry are bad for everyone.
A number of public and private industries, including our state's petrochemical industries, have banded nationally to form Consumers United for Rail Equity. Together, we support the passage of laws placing rail companies under the same anti-trust restrictions imposed on other businesses.
Monopolies are, in short, bad for business and bad for communities. Lafayette's ownership of its own utility is a continuing source of rational, non-ideological conversation about such issues. LUS is a constant reminder that public ownership, good service, being pro-business, and being pro-community stance are not inconsistent.

Conversations like these are opportunities to take another look at the odd modern rhetoric that demeans taxation, recoils at public ownership, dismisses reasonable regulation of natural monopolies, and glorifies private greed. It isn't true, for example, that all public services are a result of taxation. LUS is supported by fees-for-service. And those freely paid fees actually displace some of the taxes that other communities must impose:
Contrary to the misstatements made by the guest columnist, LUS is not supported by tax revenues of any kind. Instead, LUS makes substantial payments to help support the cost of local government functions, such as fire and police.
By contrast the federal and state governments often directly subsidize or give other special breaks to huge industries like the railroads--these cost governments income which must be made up by taxes. In most of the country mentioning such favoritism is considered an impolite violation of the illusion that corporations don't seek or accept . Not in Lafayette:
On the other hand, the major railroad systems have had a long and continuing history of receiving governmental assistance directly from tax dollars paid by citizens and businesses....

Rail companies falsely suggest these proposals will "re-regulate" or place financial burden on the railroads. Reading the elements of the proposed legislation and reviewing the financial growth in recent years of the railroad companies quickly dispel those myths.

In short, we have an ongoing, concrete conversation in Lafayette about practical local decisions that are mostly abstract and ideological in other parts of the country. It makes a different sort of sense in Lafayette to rail against railroad monopolies (and telecommunications monopolies) because we don't have to just lie down and accept it. We have utilities that can fight back in our defense. That makes a lot of difference in the public discourse here. And helps explain why we were able to understand how empty the ideology offered by the incumbents during the fiber fight was: we'd heard it all before.

As Huval says in his closing statement:
LUS will continue to represent its customer-owners by standing up to fight entities and practices that hurt our community.
Having someone to fight for us is a huge advantage. Having someone to keep or local conversation grounded in reality is an even greater advantage in the long run. Thanks, LUS.

1 comment:

Mike Stagg said...


The focus on the railroad lobby misses the real point: LUS is co-owner of one of (if not THE) largest coal-fired power plant in Louisiana.

There are approximately 39 rivers, bayous and lakes that have mercury warnings on them due to high concentrations of that metal in the water and, therefore, the fish and other critters caught in those bodies of water. The concentrations are so high that they pose health threats to children and women who are pregnant.

The source of this pollution is mostly attributed to coal-fired power plants.

Escaping the economic clutches of the railroad monopoly would be a good thing for LUS. Getting out of the coal-fired power plant business would be good for Louisiana.