Katrina Clean Up: Harry Anderson Leaves Nola, Dc Attorney General Finds Little Gouging in City

Michael Giberson

A year hence and clean up continues in New Orleans. Dave Tufte at voluntaryXchange notes a New York Times story reporting on entertainer/club owner Harry Anderson’s decision to leave town. (Try this link to the NYT article.) The energy news element to the story:

This spring, the local power company, Entergy, which is in bankruptcy and has instituted rate increases that have mystified many residents, sent a $900 bill for an apartment in the club building that had no electricity. (Later a monthly electric bill for a small shop space that had been shut up with the lights off came to $7,339.)

As the story notes, Anderson was a leader among business owners trying to clean up the French Quarter, but he became frustrated as the months dragged on. His conclusion after the re-election of Mayor Ray Nagin? It was time to move. “I just feel this place is stuck on stupid,??? he said.

Washington, D.C. city officials marked the one year anniversary in their own way: the city’s Attorney General announced the result of the year long investigation into post-Katrina price gouging by gasoline retailers… drum roll please … one gasoline station operator in Northwest D.C. has agreed to pay $897.61 to the city’s Consumer Protection Fund for sales of gasoline at “unconscionable” prices made by the station on September 4 and 5, 2005.

What makes a price “unconscionable”?

According to the press release from the AG’s office:

The Office of the Attorney General considers a substantial increase in a gas retailer’s price to be “unconscionable” if it is imposed during a period of consumer fear or confusion, and is not supported by prevailing retail prices, by an increase in the retailer’s wholesale cost, or by an actual supply shortage. Violators can face penalties of $1,000 per violation and be required to pay consumer restitution.

So, on Labor Day weekend 2005, a time during which the two major petroleum products pipelines into the D.C. area had been operating at reduced capacities, one gas station in an upper income area sandwiched between Dupont Circle and Adams-Morgan sold about 2300 gallons of gasoline over two days at prices the Attorney General considered “unconscionable.??? (For the record: regular gasoline was offered at $3.80 and premium at $4.00; the company agreed to the payment but did not admit wrongdoing.)

By the way, it appears from the wording of the AG’s press release that the case was pursued under the city’s general consumer protection law and not under the city’s specific anti-price gouging law. The D.C. anti-price gouging law requires declaration of a state of emergency or a natural disaster striking the city, but insofar as I recall no emergency declaration was made and the storms died down well to the South and West of town. (Compare D.C. Code section 28-3904(r) to sections 28-4101 — 28-4103.)

The Attorney General, having determined that retail price gouging was not a serious burden on the consumers, indicated his office would now focus on wholesale gasoline prices. The press release stated that the Office of the Attorney General is participating in a “multi-state attorney general inquiry into whether there is business conduct in the oil/gas industry that violates consumer protection or antitrust laws and contributes to higher gas prices.”

A year-long city investigation for this result? The prosecution seems an unconscionable waste of the Attorney General’s time and taxpayer money.