State regulators promised Thursday to refund to the state’s utilities customers money the Louisiana Legislature took to help balance the state budget should they win a lawsuit challenging the constitutionality of the practice.
“They paid it and they should get it back,” Louisiana Public Service Commission Chairman Clyde Holloway, of Forest Hill, said after emerging from an hourlong closed-door meeting. “This resolution is to clarify what we’ve always said: The ratepayers should get the money back.”
But not all five elected commissioners agree with the strategy, which was one reason for the resolution. A former commissioner, who soon will be joined by a sitting regulator, argues that promises aren’t enough; the state’s 2 million ratepayers — customers who buy their power monthly from utility companies — only can be guaranteed a refund if they are part of the lawsuit.
Retired PSC Commissioner Jimmy Field, of Baton Rouge, said in a phone interview that creating a class action would directly involve utility customers and would remove the middle step of having the PSC decide how to refund the money. The court order allowing a class action was approved Monday from the bench by 19th Judicial District Court Judge Donald R. Johnson, of Baton Rouge, but has not yet been signed.
Holloway said turning the PSC’s constitutional challenge into a class action would muddy up the lawsuit, delay its conclusion and lead to attorney fees that could otherwise be refunded to the customers.
PSC Commissioner Foster Campbell, of Bossier Parish, walked out midway through the executive session, saying he did not agree with his colleagues’ strategy and would join Field to become a member of the class. The PSC lawsuit “doesn’t get your money back. It just says the Legislature had no right to take it in the first place,” he said.
At issue is a controversial practice by the Jindal administration, which was approved by legislators, of sweeping into the state’s general fund any excess dollars from scattered state trust funds and agencies to pay for the daily operations of government.
The PSC argues that the money comes from fees, set by the Legislature itself, to pay for specific services, such as inspections. The fees are calculated into the monthly rates that utility companies charge customers for buying electricity and natural gas.
About $8.5 million was removed from the PSC in fund sweeps for two budget years.
What, if any, possible refunds to individual ratepayers would amount to is unclear.
PSC lawyers are confident the courts will find the budget technique is unconstitutional. In 2013, another Baton Rouge-based state district judge, William Morvant, ruled that the Legislature could not sweep $3.7 million from a fund that used a portion of probation and parole fees to enhance retirement benefits for the officers who supervised offenders.
Though a majority of legislators approved the fund sweeps, a group of House Republicans criticize Jindal for paying operating expenses with “one-time money” — funds that won’t be available in subsequent years — such as the dollars collected in the fund sweeps.
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