The Georgia Public Policy Foundation has gotten very defensive in the past 24 hours since SB 31 passed the State House. Many legislators relied on a GPPF paper to defend SB 31. Some people — not including me — suggested GPPF had been bought off given the number of connections it has to Georgia Power and Georgia Power money.
Given the tone of their latest email, I’m starting to wonder if GPPF is feeling the heat for questionable research. In part of the email, Benita Dodd writes,
Fortunately, the Georgia Public Policy Foundation is beholden only to its unchanging philosophy. Not to supporters, who sign on because they agree with the philosophy, not to buy a point of view. Ideas have consequences, is the Foundation’s motto. Foundation proposals may not find unanimous support – and usually don’t – but over the decades the Foundation has proven its integrity, credibility and commitment to good public policy rooted in sound research. This think tank’s trusted and trustworthy network of experts freely and willingly provide testimony, commentary, education and advice to Georgia leaders without regard to their political affiliation. On global warming skepticism, water markets, flexibility in environmental regulations, consumer-driven health care, bus-rapid transit, congestion pricing for transportation, school choice, welfare reform, lower taxes or nuclear energy, the Foundation has blazed a trail and refused to balk in the face of criticism, whether from Republican or Democrat, business or blogger.
I can only suspect the “blogger” reference is to Peach Pundit. But here’s the problem.
In the email, Benita writes
The Foundation will continue to push sound public policy. Initiatives include … a Georgia Climate Change Education Project that will emphasize the dangers of regulatory excess surrounding climate change (“global warming”) without scientific validation.
How exactly will they be doing that — an issue on which we agree — when they were not willing to do accounting validation to support their claims on SB 31? Their white paper gave good cover to legislators, but rang hollow with many, many people because of any substantive address of the accounting issues.
Likewise, this is really rich:
[GPPF] refused to balk in the face of criticism, whether from Republican or Democrat, business or blogger.
That’s not refusing to balk, that’s refusing justify a flawed conclusion in the face of contradictory evidence. In fact, we sent GPPF questions trying to get a handle on how they arrived at their results and they flat out did not answer. You can see the email below the fold.
Finally, the original article at GPPF made four points relating to SB31. Kelly McCutchen wrote:
Given the credit risks and the need to remain competitive with other states, Georgia should consider codifying the recovery of financing costs for nuclear power plants with the following provisions:
- Only financing costs should be included. Georgia should not follow the model of Florida and allow direct costs to be recovered during construction.
- The Georgia Public Service Commission should retain the ability to review and approve all financing costs.
- The charges should be incorporated into the base rate of all customers.
- Annual rate increases should not exceed a reasonable, guaranteed rate, perhaps 1.5 percent, to protect Georgia consumers.
Given that SB 31 made it to the floor of the House without addressing all four points and then passed with amendments blocked, we should be curious to know if GPPF really supports SB31.
GPPF is a great organization. That it is having to defend itself through such an unusual statement suggests there is something more than meets the eye presently at play within the organization.
From: Icarus
Date: Wed, Feb 25, 2009 at 10:13 AM
Subject: SB 31: Need explanation of GPPF’s analysis please
To: benitadodd@gppf.org
Cc: Erick@erickerickson.org
Benita,
We’ve never met, but I think you’ve read some of my posts at Peach Pundit. I am a friend to the organization, former member (let dues lapse, no philosophical differences), and know a lot of the other folks there, and respect them.
For the first time I can recall, we are on opposite sides of an issue, but I’m trying to keep the debate honest and simple. I do, however, have a question that I think is important for GPPF to address and either confirm or correct before the House votes on SB 31.
The analysis done by GPPF concludes that pre-paying the finance interest is a consumer friendly option. On that, we’ll agree to disagree, though I still don’t understand this conclusion if you add any opportunity cost to the consumer’s money during this timeframe.
The big question of the day, however, is this: Was the GPPF aware of the provision to allow Georgia Power to recoup their ROI, in effect, charge the consumers for profits on a plant not yet constructed, in the amount of a Billion dollars? If this feature was not in your analysis, I think it is imperative that the Legislators and the general public be made aware of this immediately.
I appreciate your assistance in obtaining this clarification.
Sincerely,
Icarus Pundit
{ 41 comments }
EXCELLENT analysis, Erick. I, too, read the GPPF e-mail the same exact way and wrote Benita about it. Doubt I’ll get a response.
At the risk of being called a lobbyist for the GPPF, maybe they decided that beating their head against a wall would have been unproductive. Once the “herd mentality” gets a grip on people like it did with this issue, nobody’s listening anyway, so what’s the point in responding?
Integrity, intellectual honesty, etc.
Integrity and intellectual honesty is what produced their opinion. You don’t have to like it or agree with it, but when you start casting stones at anyone who disagrees with you, you shouldn’t be surprised when they refuse to play along.
Integrity and intellectual honesty is what produced their opinion. You don’t have to like it or agree with it, but when you start casting stones at anyone who disagrees with you, you shouldn’t be surprised when they refuse to play along.
If you believe the GPPF is being asked to respond to ad hominem attacks then you’re not following the conversation. But you don’t actually believe that at all, do you? So what’s up with the non sequiturs?
I’m just saying that it doesn’t matter what they say, they can’t and won’t win here. Believe me, I know. Any opinion that even remotely opposes any point made by the herd is going to be ridiculed.
The GPPF is comprised of a bunch of Gomers that have little real world experience or accomplishments. I find most of the crap generated by it to be GIGO. I was not disappointed, because I have low expectations in the first instance.
There are, however, many entities with a liberal bent that are worse.
“I’m just saying” it doesn’t matter what you say either, you lose. We’ve developed a herd mentality according to your mentality and we’re stampeding, get out of the way.
Blogs don’t matter, the famous words of that unbiased opinionated Technocrat, so why are you worried DonnieChaffin, the name out of the phone book.
Donnie,
Please consider rebranding yourself as Master Double-Talker.
Um, Donnie, perhaps you haven’t been paying attention.
Those that were “ridiculed” were sock puppet after sock puppet that have appeared out of no where, stated this is a good bill and it saves consumers money, but when challenged, refused to answer challenges to how this conclusion was reached, or engaged in other obfuscation, misdirection, or charged that we are just “anti-nuke”.
If you or anyone else would like, I’ll be glad to search the comments for the various times over the last year I’ve posted articles or comments calling for more nuke plants, and even at one point calling for the federal guarantee of financing so that these plants could be built with a lower REAL cost basis to the consumer.
When a thread was posted last week about the GPPF report, and a couple of commenters made charges that the GPPF had been bought off by contributors, both Jason Pye and myself defended them and their organization.
Those are the facts, and if you need me to look up links to the comments that back them up, I will make time to do so.
But it is also a fact that the GPPF appears to have reached a conclusion that favors Georgia Power by failing to consider the opportunity cost of the consumer’s money that they will pay to Georgia Power for about a decade before they gain a benefit. It is a fact that this bill grants GA Power a “profit” on their investment years before any power is generated, though the GPPF recommendation states their analysis specifically states only “financing” costs should be approved. It is a fact that this bill further ties the ability of the PSC to regulate when, how much, and under what conditions GA Power is reimbursed, contrary to GPPF recommendations. And it is a BIG, HUGE fact that ALL rate payers will not receive rate increases, just the rate payers who don’t have lobbyists.
Yet despite what we believe to be a major omission from GPPF’s analysis that they wish not to address, they also do not reconcile how the actual legislation SB 31, reconciles with their four conditions. Ms. Dodd didn’t have time to address the details of our concerns, but did manage to find time to send out this email trumpeting the success of GPPF as a tool to help stifle criticism of this bill.
Please forgive me for joining Erick in his skepticism of their defensiveness.
Thanks for proving my point guys. I rest my case.
You’re assuming future events in order to rationalize silence from an organization that prides itself on the traits previously mentioned. If your suggested scenario comes to pass, then shame on the herd. But if the herd has valid questions, and they are simply ignored by the GPPF based solely on the “herd” status of the questioners, then shame on the GPPF. Your reasoning suggests that elitists are always right and the rabble is always wrong and therefore the rabble should never be engaged. I remain unpersuaded.
Dash Rabble
“Thanks for proving my point guys. I rest my case.”
Double-talking defined.
Donnie,
There is no “herd” here and for ALL OF US to unanimously condemn SB31 is quite remarkable.
NOBODY puts me in a herd with Bill or Icarus, it makes them sick.
The “herd mentality” refers to a diverse group that gets united for whatever reason and acts irrationally…like rioters and looters who would not normally act in such a way in other circumstances. I wouldn’t have voted for SB 31, but that doesn’t mean I have to ignore valid points made from its proponents nor does it mean I have to agree with every argument made by its opponents.
I’ve been accused of being a lobbyist and called several childish names over the past few days because I disagreed with the herd on this point or that. I’m actually giving the bloggers here the benefit of the doubt in assuming the “herd mentality” is at work. The other conclusions I could draw are less flattering.
I’ve been accused of being a lobbyist and called several childish names over the past few days because I disagreed with the herd on this point or that.
The entire “herd” of those opposed to SB 31 called you childish names? Every single one? Because it’s the entire “herd” you’re attacking here, isn’t it? You have defined us as a monolithic bunch, so you’re the one who needs to clarify and justify those characteristics that you impute to all members of the group. That seems fair, doesn’t it? So go ahead and draw those less flattering conclusions. Knock yourself out. Just don’t do so in a conclusory fashion.
Let me tell you something DonnieChaffin, I made your day. You are nothing but a shill for big business. I am among the mind numb robots that never thinks for myself, never considers an alternative view, never reviews any facts and I follow the scent of herd turds left on the trail.
The day Georgia Power united with the controlling party in Georgia is the same day I made up my mind to tell you and like minded ilk to eff off.
No Dash, it was individuals in the herd, not the entire herd. I didn’t attack anyone. If anything, I made excuses for the juvenile behavior.
bowersville, you didn’t make my day. I’m not saying you people can’t think for yourselves. I am saying that many of you don’t appear to have the capacity for an adult conversation concerning anything to do with SB 31 – evidenced by your last sentence.
Well then dipsh(it) DonnieChaffin, offer your adult conversation. I’m a lame brain, convince me.
OK, bowersville, I’ll try this one more time.
I keep hearing how this was such a major screwover for ratepayers and a coup for stockholders. If true, you would think this major windfall would have caused a run on the stock. But it lost 2% yesterday and another 1% today. So maybe the market expected this decision and had already adjusted for it. Nope, it was trading at close to 38 at the end of 2008 and now it’s below 31. Why do you think that is?
I’m actually giving the bloggers here the benefit of the doubt in assuming the “herd mentality” is at work. The other conclusions I could draw are less flattering.
I don’t really care about your conclusions.
How many in the GA make it a practice to pay a contractor before work is complete or pay years in advance for goods? It falls into the category of “a fool and his money are soon parted” The reps who voted for this travesty would NEVER spend their own money in that fashion, would they?
Furthermore, I am the most frugal person here. I have made it personal practice to hold down my electricity bill by cutting the thermostat down to 65 degrees in winter and low 80’s in the summer. With this and the 3 rate increases that Georgia Power got over the last 4 or 5 years, my discipline and sacrifice no longer will suffice. So here we have a bunch of legislators who have elected to inflict personal harm on everyone who is financially responsible to reward a company that was utterly irresponsible the last time they built at Vogtle and now demands protection against their irresponsibility. Not that, but higher cost base is translated into higher rates for users and higher revenues for being irresponsible.
Last year the GA passed that extension of conservation use, transferring $100’s of millions from corporate property taxes to everyone else.
Now this.
These people need not make any pretense of serving the majority of constituents.
The only way they’ve inflicted harm is if they’ve taken money away from you that wouldn’t have been taken if this bill had not been passed. Do you really believe that? I believe that Georgia Power is a government-protected monopoly that is going to make a somewhat fixed profit. If they don’t make a profit because they’ve got money tied up in these reactors, they’ll run to the PSC with a rate increase, the PSC will rubber stamp it and they’ll get your money anyway. If there’s some aspect to that equation that’s in error, I’m listening.
I believe the question on this post is whether GPPF is feeling a little defensive. I think the answer is probably yes in that their materials got used in a way they never intended and, additionally, the concerns they raised were ignored by the decision makers. Having sometimes been in a similar position myself, I can understand the defensiveness and know it is an extremely frustrating position to be in. However, I do think it would probably help if GPPF actually answered Icarus’ question in bold:
Was the GPPF aware of the provision to allow Georgia Power to recoup their ROI, in effect, charge the consumers for profits on a plant not yet constructed, in the amount of a Billion dollars?
Not responding directly usually just allows an issue to fester until it blows up in other ways – like a pointless discussion about a herd mentality.
I think if your going to criticize GPPF, then you have to look at GA Watch on the other end. GA Watch is basically a campaign arm for Roy Barnes, who happens to be the chair of GA Watch. Over the last few weeks I’ve heard ridiculous statements about GA Power having 70 lobbyists lobbying for SB31, trucks being bought for legislators, 100% of the advanced payment went to their profit, the average Georgian’s opportunity cost for money is 14% (wish I could earn that return on my investments), it guarantees a profit for GA Power and it shifts all the risk to the consumer. A number of legislators feel GA Watch and the anti-nukes are behind these statements.
I think the bill has some issues, mainly should we be paying upfront payments in such a bad economy, but a lot of SB31 was twisted into more than it really was.
I keep hearing how this was such a major screwover for ratepayers and a coup for stockholders. If true, you would think this major windfall would have caused a run on the stock. But it lost 2% yesterday and another 1% today. So maybe the market expected this decision and had already adjusted for it. Nope, it was trading at close to 38 at the end of 2008 and now it’s below 31. Why do you think that is?
Because the bill hasn’t:
1) Been signed yet by the Governor
2) Been announced to the stock market that the bill has been passed
3) Hasn’t been analyzed by the traders and analysts who will consume the info WHEN the bill gets signed and WHEN the law takes effect.
4) May still not cause a run-up in stock price BECAUSE the dividends will not start paying-off until 2011.
Yeah, we’re “children”, Donnie. We don’t no whut we be tawking about wen it cums to thangs like the stock markit and FY-nance.
“The “herd mentality” refers to a diverse group that gets united for whatever reason and acts irrationally…like rioters and looters who would not normally act in such a way in other circumstances.”
Actually I think you’re referring to “mob mentality”, as in irrational and angry violence, such as looting or a lynching. As far as “herd mentality”, this would be like “sheeple” or lemmings. Following the crowd off a cliff. I don’t think most of the bloggers fit into either category here.
BS. That’s completely ridiculous. The people who make a living in the markets almost always know about these decisions in advance, particularly in this case where the fix was in before the bill ever went to the House. Does anybody anywhere think the governor is not going to sign the bill? Do you really think the market is waiting on an official announcement? I fell out of my chair laughing on that one. I appreciate the entertainment.
Donnie,
Two YEARS before dividends come. Besides all that, if it is “5% yield” (that I keep reading by you) that Southern Company wants to “ensure” Granma and Grandpa receive on their investment, the LAST thing they want to happen is to run-up the stock price. Because, as I’m sure an ace-finance Dude like you knows, the higher the stock price, the less the dividend yield.
Go back to drinking your Two-Buck Chuck.
the average Georgian’s opportunity cost for money is 14% (wish I could earn that return on my investments)
That’s not ridiculous. The average Georgian carries a credit card balance that they can’t pay off immediately. For them the opportunity lost is the opportunity to “invest” in a lower credit card balance, which would save them double digit interest month after month thereafter.
Bill, I had to google Two-Buck Chuck to find out what that was. And I googled “beer pong” while I was over there. I’m learning all kinds of things talking to you guys (I guess I need to hang out with undisciplined college kids and winos more often).
So now it was the Southern Company’s intention to lower its stock price so it wouldn’t have to pay out as much in dividends, which means they can operate with less money and then the PSC will force them to lower their rates…which means these reactors will be free. Those guys are geniuses. Thank God for SB 31. I’m back on the floor laughing again.
Honestly though Bill, if nobody else calls you on this ridiculous logic, I don’t know why anybody reads the comments here…maybe for the comic relief.
So now it was the Southern Company’s intention to lower its stock price so it wouldn’t have to pay out as much in dividends, which means they can operate with less money and then the PSC will force them to lower their rates…which means these reactors will be free.
You’re obviously putting those words in his mouth. Bill said nothing close to that, and what he did say is dead on. Why would you even attempt this sort of gross extrapolation?
We are in the days of the second Age of the Robber Barons in America.
Donnie and Georgia Power are contemptuous of the people.
There is a double top in on arrogance.
The people of America and Georgia are about to rise up and throw all of these bums out and their lackeys too. Their excesses have grown too great and the pain on the people too onerous.
The spirit that founded this nation is not dead.
A trust buster is coming, for the vast middle class is not going to sit by and be exterminated, which is the current game plan.
As for GPPF, they got caught doing totally deficient work, got called on it, now hope to dissemble.
I’m afraid Republicans have become that which we hated. Taxers, spenders, control-a-holics, crooks-and-liars, internal rot, ect…
Game Fan – you’re right. Which is why I’m no longer a Republican. They are no longer the party I joined of small government, fiscal sanity, and accountability. Any more, they have nothing to offer but strategy and soundbites with no ideas of how to confront today’s problems except with yesterdays solutions. And I say this as a product of a family who’s been Republican in Georgia since the ’40s.
Today’s Republicans in Georgia are nothing more than second class Democrats who couldn’t make it in the traditional politics with the primary exceptions being Rep Chambers and Lt. Gov Cagle and anyone else who was a Republican before 1990.
So now it was the Southern Company’s intention to lower its stock price so it wouldn’t have to pay out as much in dividends, which means they can operate with less money and then the PSC will force them to lower their rates…which means these reactors will be free.
Dude…#1, HUH?
#2, WTF? (Google that one, Dope fiend)
For your info, Stock Price is not usually related to dividends. Dividends are money paid-out of a company’s net income. Stock price is a free-unit in the stock market.
YIELD is calculated by dividing dividends per share by stock price per share.
If the stock price increases and dividends do not increase at the same rate, the YIELD DECREASES.
Donnie…you’re an idiot. That’s all I gotta say. You don’t know jack about the stock market, corporate finance, or anything. Your whackjob interpretation of what I said demonstrates that you do not have the IQ potential to BEGIN to understand these things.
Whoa…why was Cagle just thrown in with Jill Chambers? Casey Cagle was for SB 31, by the way.
Despite their differences on the bill, they’ve both Republicans long before it is was popular as far as I’ve heard. Nothing to do with SB 31 in particular. On the surface, I can see how people could disagree and how GPPF got into a sticky situation, but still I tend to respect those who’ve been Republicans since before it was popular vs. those like our gov who seemed to change parties because they realized they would always be second class Ds ’cause they’re stupid enough to to say Ï can’t put my assets in a trust and hire a management company.” Please.
I respect those Republicans who’ve always been Republicans liek Chambers, in spite of their current differences with the the current so called Republican leadership.
Bill, you’re the one who said Georgia Power doesn’t want their stock price to go up, which is ridiculous beyond belief. I played along with your faulty logic and tried to explain why that might be true. I was simply trying to be as humorous as you’ve been and didn’t realize you had no sense of humor.
And your “lessons” on finance are really cute…mostly things my children knew when they were in middle school. I’m sure they taught you things about finance at Georgia State that I’ll never know and I have respect for those who apply themselves and get an education. But in your case, the rubber doesn’t appear to be meeting the road.
But the worst thing about some of you guys here is that you can’t have a conversation about anything with anyone who disagrees with you without it degrading into name calling (and that’s something I corrected with my children when they were in elementary school). And you wonder why the GPPF hasn’t responded?
Anyway, I’ll go away and let y’all repair the break in your circle. Have a nice life.
GPPF got into a sticky situation
The Georgia Public Policy Foundation is now in the discredited category. It is unimaginable that GPPF can have any credibility for unbiased evaluation of any issue after blowing this one. Then, to top it off, they seem to think that they can stonewall any explantion of their incredible omission.
GPPF is now in the same league as the CNBC crowd who are stone-silent after their GE bosses reneged on a pledge to maintain the dividend, only to cut it by 67%. They are in the same league as Isakson, who swore accountability for TARP, only to now cry about being deceived.
Do your own research. Kudos to Icarus and the PPunditeers who took the time to jump on this one.
Don’t believe those PREVIOUSLY entrusted to represent the public interest. They stand on dung legs.
But the worst thing about some of you guys here is that you can’t have a conversation about anything with anyone who disagrees with you without it degrading into name calling (and that’s something I corrected with my children when they were in elementary school). And you wonder why the GPPF hasn’t responded?
Please point out where I called you names so I can apologize.
You ignored my last post because you know that I have thoroughly decoded your kung fu. Instead you respond only to those who you can enrage to the point of name-calling. On an objective level you’ve failed to score any points at all, but that’s neither here nor there. All you were really trying to do is to solicit ad hominem attacks so you could claim victory in the effort to discredit the entire Noah’s Ark full of SB 31 detractors as a bunch of hot-headed nutjobs. I’m not sure what that really accomplishes since what you are doing is so transparent, but enjoy your “victory” just the same.
Name-calling? Yeahhh..that’s nothing the Ga Power lobbyists implanted in the minds of some of those folks giving their “impassioned” speeches on the floor of the House Thursday, did they?
The lobbyists whispered (or, hell, wrote the damn speeches for them) things like:
“Whoever is against this bill hates Georgia Power.”
“Whoever is against this bill is against nuclear power.”
“Whoever is against this bill wants to put people out of work.”
Etc., etc., etc.
“Name-calling” vs. “pathologically lying”…I wonder which is worse, hmm, Mr. Donnie-be-good?
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