Tuesday, March 5, 2013

Wealth Inequality in America and the Montana Public Service Commission

A friend emailed me  this video last night. I suggest you you devote 6 minutes to watching it:

As the video stated, I always knew there was a wealth inequity in this country. But can it really be that staggering?

How does the wealth inequity in Montana compare to that of the rest of the nation? Who are the Montanans in the top 1 percent?

Should we have a right to know?

And what does all of this have to do with the Montana Public Service commission, as indicated in the title of this post?

The answer to that last question is the Republican Public Service Commission will  today consider repealing a rule that requires Montana’s regulated monopolies to disclose the salaries of their  highest-paid employees.

As my colleague Karl Puckett reports in today’s Great Falls Tribune:

Bob Lake, a Republican from Hamilton, is bringing the issue forward. It’s his position, he said, that a government agency should not be in the business of distributing what he says is private information.

“It’s an independent private company and it should not be the Public Service Commission’s job to go out there and make sure the rest of the world knows the top executives’ salaries,” Lake said. “That’s a privacy issue for those people.”

Mountain Water in Missoula sued the PSC over the rule in 2010 and it looks like the PSC is going to settle the lawsuit today by promising to keep executive pay secret from the public.

If the current disclosure rule is repealed Montanans would have the right to know how much the local kindergarten teacher or the janitors at the Capitol make, but they won’t have the right to know what  the top executives of our state-regulated utility monopolies are making.

As a member of the press and the public I argue we do deserve to know that information.

Just as we have a right to know what ALL state employees are earning, (no privacy concerns there) we should have the right to know how much state-regulated utility monopolies are paying their top executives. Those salaries come from the rates we pay as captive consumers who have no free market options when it comes to turning on the lights, turning up the thermostat or turning on the faucet.

Heck, even federal securities law requires publicly traded companies such as NorthWestern Energy to disclose their top executives’ salaries. 

(If you care to know, NorthWestern CEO Bob Rowe made $1.4 million in 2011, while the average Montana household took home $44,222, or about 3 percent what Rowe earned).

Due to the ongoing litigation, we don’t know how much current Mountain Water CEO John Kappes makes, but based on documents filed with the PSC, Arvid Hiller, the former president of the company,  made $714,171 in 2011 before the company was acquired by the Carlyle Group in December of that year. (The average Montana household took home about 6 percent of what Hiller earned in his final year as president of the Missoula water utility).

So why, exactly, shouldn't the public be able to know the salaries of the top executives of public utilities, whose revenues come from the rates the public is forced to pay for services that are illegal to buy from anyone but those monopolies that are protected from competition by law?

As a Montana utility consumer I cannot go on the free market and buy electricity from a wind farm along the Hi-Line. I have to buy my electricity from NorthWestern Energy, and if I live in Missoula I have to buy my water from Mountain Water. I suppose theoretically Missoulians could buy their water in bottles, but if they want it to flow from the tap they have to buy it from a publicly regulated utility.

Which brings me back to the video.

What is it these public utility corporations don’t want us to know? If their salaries are in line for the work they do, then why should they care? And why does the PSC think a publicly-regulated utility CEO’s right to privacy is more important than a teacher for the Montana School for the Deaf and Blind’s right to privacy? How exactly is the public served if the Public Service Commission repeals this rule?

These are all questions I’m sure will come up at today’s PSC hearing.

You can log on and watch live here

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