The Accountability Conundrum

IUPUI’s Spring semester started yesterday. Mid-day, I convened 42 undergraduates, and last night faced 19 graduate students. As with all new classes, some students show promise and others not so much. Time will tell.

An interesting exchange in my graduate Law and Public Affairs class raised a question that has nagged at me since: I had asked the class to describe the differences they would expect to see between the behavior of public officials serving in an autocratic regime and those serving in a democratic one. How would the nature of the regime affect the practice of public service? A student suggested that accountability would be different–that in liberal democratic regimes like our own, public administrators are accountable to the people; in an autocratic system, accountability runs up the bureaucratic chain of command.

It was a good answer. In theory, he is exactly right. But in practice, the increasingly complex and technocratic nature of our government is making a mockery of genuine accountability in multiple arenas.

Take utility regulation. After I discussed the issues surrounding the coal gasification project in Southern Indiana, Grant Smith, Senior Energy Policy Advisor for the Civil Society Institute, wrote the following:

As Indiana enters the 2013 legislative session, the influence of the investor-owned gas and electric utility companies looms large.  Not that they didn’t have influence before.  Whether the Democrats or Republicans have control of the Indiana House (the Indiana Senate was gerrymandered into a permanent Republican stronghold long ago), utility companies and their friends in the coal industry (namely, Peabody Energy) dominate the discussion.

Their lobbyists walk with swagger and always seem unusually relaxed in the heat of the session.  They are able to reflect this air of serenity because they are enabled.  They are enabled by state regulators at the Indiana Utility Regulatory Commission as well as many legislators on both sides of the aisle.

The legislature has failed to pass pro-ratepayer legislation on behalf of residential and business customers for 30 years.  The sad thing is that the one bill passed to avoid another power plant boondoggle, i.e. another Marble Hill (nuclear) power plant debacle that occurred in the early 1980s, has been rendered useless through administrative fiat.  The deal, thirty years ago, was that electric utilities had to prove that a plant was needed and to provide least cost service.  Our regulators eviscerated that part of the statute by interpreting the statute on behalf of electric utilities.  To them, least cost means that utilities must only review but not implement least cost options.  If the statute were interpreted as originally intended, we wouldn’t be dealing with the scandal of Duke Energy’s Edwardsport coal gasification plant.  It certainly is not needed in an era of very low projected electric demand and at $3.5 billion and counting obviously not the least cost option to provide service.

It’s absolutely amazing that since the passage of the certificate of need law mentioned above that the IURC has never denied a power plant on its own volition. Never.  If a plant did not go forward, it’s been because the utility or the non-utility, power plant developer decided to pull the plug.  The Commission was wrong about Marble Hill – prior to passage of the law.  The lights, as claimed by Public Service Indiana (now Duke), did not go out because the plant wasn’t built.  The additional unit at Northern Indiana Public Service Company’s (NIPSCO’s) Shahfer coal plant was not needed.  NIPSCO’s been over-built for years.  The Commission even continued to approve merchant power plants (in the wake of deregulation of electric wholesale markets) when it was obvious that the bottom had fallen out of the market.  Many of the plants that were built barely ran for years or were sold for pennies on the dollar.  Nearly 100 billion dollars were lost nationwide by the industry.  Utilities whose subsidiaries built merchant plants not tied to their captive rate base rushed to get regulators to put them in the rate base, as Indiana regulators did on behalf of Cinergy (now Duke) at its subsidiary’s CinCAP VII Plant in Henry County.  And with electric demand projected well under 1% for years to come, cheap energy efficiency measures and mature wind and solar technology whose costs continue to decline, Edwardsport was never needed.

 How can an institution with vast amounts of expertise and experienced staff inevitably be wrong?  It’s always wrong because the regulatory process is rigged.  The scandal surrounding Edwardsport and excellent reporting at the Indianapolis Star and Indianapolis Business Journal proved that.  The only reason that Duke is eating some of the costs of the plant is that they and the Commission were caught.

 What we need is more transparency at the IURC where regulators oversee more money than we pay in income taxes every year.  What we need is an elected Commission that is held accountable to the public and not working in the shadows behind closed doors in collusion with utility companies.

 As it happens, electric and gas utilities have systematically dismantled ratepayer protections at the legislature and before the Commission.  They have become monopolies with little to no business risk.  Their business plans and mistakes are dumped on ratepayers in the form of rate increases without the slightest pushback from either elected officials or regulators.  They are awarded incentives for what they should be doing anyway.  They are systematically throttling the promise of a strong renewables market in Indiana in favor of their obsolete coal plants and, with this strategy, maintaining a status quo that is expensive, dirty, and economically disastrous.

 This session they will be back with more risk-shifting legislation to relieve themselves of any business risk or management responsibility they may still face, with no thought to the burden they will impose on their customers.  With their captive ratepayers, captive legislators, and captive regulators, they will essentially become unregulated monopolies.  What a deal – for their stockholders.  What an injustice to the rest of us. And most likely without an opposing word from our regulators.

 The IURC is charged with balancing the interests of ratepayers and utility companies.  Such balance is regrettably nonexistent.  The Commissioners have lost sight of the law and their charge.  Many legislatures have been equally negligent, mandating their constituents unwillingly and sometimes unknowingly to rubber stamp utility malfeasance and incompetence.

I dare say that this is the situation in many jurisdictions in the US given the corporatization of government.

Now, I do not have the background to evaluate the particulars of this complaint. But that’s the point–few of us do.  References to “certificates of need” and the URC and the intricacies of the rules governing utility rates are at best unfamiliar territory to most of us, and at worst, Greek. How do we ensure accountability of this government agency? How do we know when it has been “captured” by those it ostensibly regulates?

How does the average citizen judge the merits of Grant Smith’s allegations, or the URC’s inevitable defense?

The same question applies to the EPA, the FCC, the FAA….to all of the federal and state agencies charged with regulating activities involving significant specialization and expertise.

Just how accountable is our “democratic” government, really?

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Revisiting…Everything

Random thoughts for a Sunday morning….

The Sunday morning interview shows are focused on the GOP’s “identity crisis.” The New York Times has an article by the Public Editor about a not-dissimilar debate occurring within journalism over the meaning and possibility of “objectivity.” An academic listserv I participate in has a recurring discussion about the advisability of holding a new Constitutional Convention, or at least seriously considering significant constitutional changes. Various religious denominations are grappling with challenges to settled theological positions, including their beliefs about the role of women, homosexuality and same-sex marriage. Educators are struggling to redefine both ends and means. Technology is changing everything from how we live to how we define friendship.

I could go on, but you get the picture. We live in an era when–as the poet put it– “the center will not hold.”

The existential question, of course, is: what will emerge from all this confusion and change? Will we take this opportunity to think about the “big” questions–what kind of society do we want to inhabit? What would a more just system look like? Aristotle was among the first to suggest that an ideal society would facilitate human flourishing; what would such a society look like?

Unfortunately, there’s not much evidence that these “big” questions are being asked. Instead, we seem to be surrounded by quarrelsome adolescents, desperately trying to game the system and retain–or obtain–relative advantage.

I wonder what it would take to change the conversation?

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Sometimes You Have to Eat a *** Sandwich

Pat McCarthy is a very thoughtful commenter to this blog, and he made an important point yesterday about compromise–a point that deserves consideration. What, exactly, do we mean by these repeated calls for political compromise? Should progressives “compromise” our insistence that GLBT citizens are entitled to the same civil rights as the rest of us? Can we really expect–or demand–that conservatives “compromise” deeply-held religious beliefs?

I think there are two different, albeit compatible, answers to that question.

The easy answer–the facile answer–is that honorable people don’t compromise on matters of moral behavior; we don’t sell out our gay citizens, act in ways that violate our consciences. The caveat here is that few political battles really involve such choices. Votes on tax rates, minimum wage, health care, the social safety net and the like may have moral underpinnings, may implicate our beliefs about social justice, but rarely present us with stark decisions about Good and Evil. (Note caps.) You’d have to be morally obtuse to characterize the recent, shameful mud-wrestling over the fiscal cliff negotiations as a fight for first principles.

Which brings us to the more honest–and arguably more difficult–definition of political compromise:  prudence, a recognition that few votes are “all or nothing” and a willingness to accept less than everything in order to get something, in order to move, however incrementally, toward one’s goal.

One of the more memorable quotes in the wake of the fiscal cliff vote was Senator Bob Corker’s glum conclusion that sometimes, it is necessary to “Eat a *** sandwich.” The difference between a passionate advocate and a zealot is that the advocate will be willing to “suck it up” on occasion in order to achieve broader goals, willing to do what is necessary in order to advance his cause over the long term. The zealot is the “all or nothing” guy, and generally, what zealots get is nothing. As someone once said, politics ain’t beanbag. Or as Kenny Rogers might put it, people who actually get things done know when to hold ’em and know when to fold ’em.

There aren’t bright lines when principles are at stake. We’ve all seen people selling out their principles and justifying that transaction on prudential grounds. But when zealots insist that every s**t sandwich is a betrayal, we all lose.

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Two Different Worlds?

It has become commonplace to complain that Americans are living in different realities–to respond to statements or opinions that seem particularly bizarre with some version of Barney Frank’s famous line, “on what planet do you spend most of your time?” But what if that isn’t hyperbole? What if Red and Blue Americans really are occupying different worlds?

What if America is actually going through some sort of “virtual” replay of the civil war?

My husband and I eat breakfast at a local coffee shop most mornings with a friend who shares our political obsessions.  Yesterday, during a breakfast discussion about the embarrassing series of congressional fiascos that finally led to last minute legislation avoiding–or at least postponing–the fiscal cliff, my husband shook his head in wonder: as he noted, Congress had set this scenario up and thus seen it coming for at least 18 months during which it had done absolutely nothing. Why? It seemed incomprehensible.

Our friend offered his theory: The Republicans swept into office in 2010, convinced they would retake both the Senate and the White House in 2012. During the campaign, they continued to believe that Romney would win the election, and that they would then have the opportunity and power to fashion their own “fix” of the impending sequester, probably along the lines of the Ryan budget. When Romney lost, and the Senate became even more firmly Democratic, they were stunned. They hadn’t prepared for that eventuality, and they’re still trying to find their bearings.

In the aftermath, the party’s internal fissures have also become more pronounced. At this point, the GOP is like a fish out of water, flopping frantically this way and that on the floor.

I would dismiss my friend’s explanation as utterly fanciful if there were not so many emerging reports that support it. Somehow, despite all of the data and polling and anecdotal evidence to the contrary, despite Nate Silver, a significant number of Republican political figures managed to convince themselves that up was down, blue was red, and America would never re-elect that black guy, especially in a sour economy. When Obama won, they were genuinely shocked–and unprepared to participate in divided government.

I was still mulling over this increasingly plausible explanation when I got to the gym, climbed on the treadmill, and turned on the television. There was Chuck Todd in front of a chart showing the massive increase in the number of single-party states–states where one party or the other controls both houses of the legislature and the Governor’s mansion. (Indiana, as we know, is one of those states.) There are exceptions, but most of the Republican-dominated states are in the old South (i.e., the Confederacy); most of the Democratic-dominated states are in the Northeast and on the west coast.

Representatives elected from lopsidedly one-party states don’t worry about challenges from the opposing party; they worry about primaries. So the Republicans pander to the rabid rightwing base of their party, and the Democrats play to the intransigent left of theirs. As the number of “safe states” multiplies, so does the number of unyielding, uncompromising ideologues.

Even in the absence of that political calculus, however, when people come from an environment that is dominated by a particular political philosophy, it takes effort to seek out and understand competing points of view. Such environments reinforce those “bubbles” we create by our media habits and friendship choices. Pretty soon, other perspectives seem fanciful and/or deluded, and we lose our ability to function within them.

The question is, how do we engage in anything remotely like self-government under these circumstances?

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