Arguing that the government regulators of private monopolies had created their own monopoly through their permitting system, Louisiana legislators overwhelmingly passed a new law that opened up the hauling of hazardous waste to all comers.
While the five elected members of the Louisiana Public Service Commission agree that the Legislature has no right to interfere with their regulatory prerogatives, they have split along party lines in the debate over the particulars covered by the new law.
“It’s ridiculous,” said Commissioner Foster Campbell, a Bossier Parish Democrat. “All the Republicans talk about is free trade, open markets. But every one of these guys is covering up for monopolies. It’s one of the hidden secrets at the PSC.”
Republicans on the panel countered that the agency has proposed new industry-inspired rules that address most, but not all, of the issues raised by the Legislature and does so without compromising the PSC’s authority outlined in Article IV, Section 21 of the Louisiana Constitution.
PSC Chairman Eric Skrmetta, a Metairie Republican, said: “I took an oath to support the Constitution of the state and until such a time as a judge strips that authority I’m going to abide by that Constitution.”
The new rules, now in their fifth year of formation, has been slowed by death and political ambition. But commissioners could vote as early as September on procedures that supporters say would ensure the public is protected from the unscrupulous haulers who once dumped barrels of toxic waste in swamps and bayous.
Underlying issues aside, the PSC also filed a lawsuit that argues the legislators and Democratic Gov. John Bel Edwards not only jumped the gun, but illegally grabbed their constitutional authority in doing so.
Nineteenth Judicial District Court Judge Michael Caldwell, of Baton Rouge, and ultimately the state appellate courts are being asked to determine whether the PSC or the Louisiana Legislature has the power to regulate private truckers operating in the state.
There are two levels of permits, one that limits the holder to five clients and the other that allows the carrier to haul waste all over the state. About 70 companies are allowed to move either hazardous waste or industrial byproducts or leftovers from oilfield drilling and production from its source to its disposal.
Thirteen truckers are permitted to handle all three types of waste.
Campbell calls those the “gold” and “platinum” permits, Campbell said. “They’re the only ones that can do this business all over the state, that makes them (the permits) pretty damn valuable,” he said, noting that not a one of the current licensees is located north of the Interstate 10/12 corridor where his million constituents live.
All 13 of the permit holders are politically well-connected. And almost all of the officers in the 13 companies are prolific contributors to political campaigns, collectively giving hundreds of thousands of dollars to candidates, though not any running for the PSC.
PSC regulations have evolved since Huey Long was commissioner almost a century ago. Hazardous waste procedures tightened over time after officials in the 1970s become aware that some operators were dumping toxic waste pell mell.
Traditionally, PSC vetting protocols include public hearings, during which interested parties can demand information and raise concerns. That model may prove effective in balancing the business needs of privately owned utilities operating as monopolies with customers who have no other choice on the open market. But carriers have to compete for waste hauling business, Campbell said.
What ends up happening is that the truckers with the existing permits get a chance to demand sensitive information, like client lists, and set conditions, such as the amount and type of equipment necessary, in order to get the permit, he said.
“There are some antiquated rules that need to be looked at,” said Bubba NaQuin, a former state environmental inspector who joined Hine Environmental Services in Sulphur, a company that has sought a permit.
NaQuin testified those who oppose relaxing the regulations do so because they fear tiny companies without proper equipment and financing will get the contracts and bring back the days when dangerous by-products often ended up in vacant lots instead of proper disposal facilities.
But in the current litigious society, the companies that make the waste are careful how it’s handled lest they get sued, he said. And the state Department of Environmental Quality has tightened its regulations and tracks the toxins from cradle to grave.
State Sen. Dan “Blade” Morrish, the Jennings Republican who sponsored Senate Bill 50, argued that all the PSC really needs to do is ensure the applicant has the financial wherewithal, the trained personnel and enough insurance to the work.
“This is not about safety. It’s about free enterprise. It’s about fair competition,” Morrish said.
The proposals pending a PSC vote address a number of the changes of the complaints. Specifically, if the new rules are enacted, the PSC staff lawyers and experts will review applications, which include reviewing the company’s internal documents, behind closed doors. Then they’ll make a recommendation to administrative law judge assigned to handle the public portion of the process. Hearings will be held and the judge will issue a written recommendation and opinion on which the five elected commissioners can vote.
Critics of the proposal say that while the new rules would allow for a recommendation before the application becomes public, the procedures still pretty much mimic what happens now.
Supporters counter that the rule changes reflect an industry-driven compromise from all hauling concerns – not just those who didn’t receive the permits they sought – while still providing the public a level of protection that was at the root of the original procedures.
PSC General Counsel Brandon Frey pointed out to legislators in testimony that commissioners relaxed the procedures regulating companies that move household furnishings when they saw such scrutiny was generally unnecessary.
Approving the new rules has proven difficult.
PSC Chairman Clyde Holloway, the Forest Hill Republican who started the rules-changing process in 2012, died. Commissioner Scott Angelle, R-Breaux Bridge, ran unsuccessfully in multiple elections until he quit earlier this year to take a job in the Trump administration. Meanwhile, the staff attorney shepherding the effort left for a better paying job.
One of the new commissioners, Mike Francis, R-Lafayette, recused himself because his son was affiliated with one of the permitted companies.
The remaining four have split two-to-two along party lines – three votes are needed for approval or rejection – largely on whether to adopt the new rules as written or embrace further changes that were included in the new law.
Commissioner Damon Baldone, R-Houma, joined the PSC in June and started delving into the issue, which is the biggest one right now confronting regulators.
“I’m the new eyes of this commission,” Baldone said. “They realize there are some issues and we’re on the path to resolving those issues. The new rules will set out a way for the average guy to get a license and that’s the bottom line.”