CrashListers:
Electricity deregulation works--for the moneyed minority. This is just
standard big business practice, in my humble opinion.
Below is the seventh paragraph of a recent front page story in The
Sacramento Bee about the $12 billion debt held by the utilities (Pacific Gas
& Electric and Con Edison).
No mention is made of the unregulated wholesale electricity the utilities
produced for other buyers, and the revenue from these sales.
To pay their debt, the utilities should use the money from the sales of
unregulated wholesale electricity to themselves or other buyers.
Since Pacific Gas & Electric and Con Edison recently gave California Gov.
Gray Davis $500,000, you can forget about that.
Finally, late last week a consumer group in California held a press
conference to in part read a leaked memo from Credit Suisse First Boston.
The memo states that the rolling electricity blackouts in the state should
have the desired effect of "softening up" the legislators to support a
public bailout of the utilities' debt. The blackouts had their desired
effect. In the words of wits, financial capital doesn't speak it shouts.
California's politicians have decided to issue bonds to publicly repay the
utilities' debt, with taxpayers gaining stock in the assets of the bailed
out corporations.
Isn't government ownership of private assets what Federal Reserve Bank
Chairman Alan Greenspan opposes?
Seth Sandronsky
State looks at 'investing' in 2 utilities: PG&E files lawsuit against rate
limits
By Amy Chance, Dale Kasler and Emily Bazar
Bee Staff Writer
(Published Jan. 26, 2001)
(clip)
While utilities have estimated their debt at $12 billion, about 40 percent
of that figure reflects the cost of power the utilities produced at plants
they own -- not payments they owe other power generators or marketers. Davis
has said he does not believe utilities are entitled to recover all that
money.
Bee staff writers Carrie Peyton and Cheryl Miller contributed to this
report.
Copyright � The Sacramento Bee
Seth Sandronsky
From: Art McGee <[EMAIL PROTECTED]>
Reply-To: [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Subject: [BRC-NEWS] Unnatural Disaster
Date: Sun, 28 Jan 2001 17:52:07 -0500
http://www.alivewired.com/2001/20010125/harvey.html
Columbus Alive
January 25 - January 31, 2001
Unnatural Disaster
Deregulated California utilities are electrocuting the
public. Ohio is next.
By Harvey Wasserman
Electric utility deregulation has become a spectacular
catastrophe, starting in California and stretching deep
into our economic and ecological future, here in Ohio
and nationwide.
To keep it simple, we'll start with the top 10 truths
about this unnatural disaster:
1. There is no electric supply shortage threatening
California (or the nation), only a series of complex,
cynical manipulations that have ramped prices sky high,
yielding enormous profits for a few distributors and
generators.
2. The deregulation bill at the root of this crisis was
drafted by the California utilities now facing bankruptcy
and was rammed through the California legislature
(unanimously, in 1996) by the utilities' own lobbyists.
3. The Natural Resources Defense Council, through its chief
energy spokesperson Ralph Cavanagh, and with support from
the Energy Foundation, played a key role in drafting,
passing and then defending that bill.
4. But the California bill's catastrophic outcome was
accurately predicted in intricate detail by a wide range
of grassroots, consumer and environmental groups that
challenged the deregulatory scheme in a 1998 statewide
referendum.
5. The utilities now screaming for help spent at least $40
million to defeat the referendum that would have saved the
state and nation from the current crisis.
6. The utilities now screaming for help walked off with
more than $20 billion in "stranded cost" bailouts as part
of deregulation, but nobody seems to be able to account
for where the money went, nor is there a concrete plan
for getting that money back.
7. The consuming public would gain, not lose, if the
utilities now threatening to go bankrupt actually did
go bankrupt, and the public then took over the utilities.
8. The public-owned utilities that supply Los Angeles and
Sacramento are prospering in the midst of this crisis,
proving once again that public power is the answer to
the nation's long-term energy needs.
9. Those municipal utilities are deeply invested in energy
efficiency and renewable sources (wind and solar), which
has provided them with a stable supply in the midst of
the crisis.
10. Any new electricity production added to the state and
national grid should come from wind, which is the cheapest
and fastest-to-build new power source, and from solar power,
which can be installed on rooftops and at industrial sites,
freeing homeowners and businesses from the lethal fluctuation
of monopoly manipulations.
The core of the California power crisis is simple: The
utilities got greedy. They thought they were taking the
electricity business into a brave and profitable new
millennium. Instead, they threw it back to a chaotic
old century.
In the 1880s, when Thomas Edison and others first made
electricity a salable commodity, rampant competition created
chaos. Wires were strung everywhere, power plants popped up
in bad places, service was abominable.
But as the Morgans and Rockefellers inevitably swooped in to
create stable monopolies, the public rebelled against price
gouging and centralized private control. The barons who
gobbled up the revolutionary new technology were confronted
with the threat of being taken over by angry consumers.
So Samuel Insull, the godfather of the new industry,
came up with a compromise -- regulation. From 1907 through
1920, virtually every state established its own regulatory
commission to set rates and monitor growth and service in
the electric power business. But the state commissions were
rapidly taken over by the utilities themselves, and there
were extensive flaws in the scheme, most notably its
propensity to encourage the construction of massively
expensive, inefficient and dirty power plants.
Along the way, massive abuses brought on the New Deal
installation of the Federal Energy Regulatory Commission
and other national controls. Since then, state and federal
regulation has provided the nation with a relatively stable
and reliable electric supply system. It has been stodgy and
short on technical innovation. It has also stemmed the tide
of public power, which still, where it's in place, provides
cheaper and more reliable electricity than private investor-
owned utilities, regulated or otherwise. And, in fact,
regulation is still in place in 27 states. Though Texas has
insisted on deregulating in the midst of the California
debacle, the chaos in the Golden State has pretty much
stopped what looked like a national avalanche of state
deregulations.
In California, the disaster has taken the form of a mafia-
style shakedown. As a price for ending regulation, the
utilities demanded a $28.5 billion "stranded cost" bailout
for their bad investments, most importantly their obsolete,
super-expensive nuclear power plants (in Ohio the "stranded
cost" tab has been more like $9 billion).
What happened to that money, nobody seems to know. Southern
California Edison invested at least $5 billion in Asia;
Pacific Gas & Electric bought up much of the power generation
in New England and upstate New York. But in a huge shell game,
the California utilities shifted those assets to their parent
companies, while leaving their distribution companies to flirt
with bankruptcy -- and to get hundreds of millions more
dollars in public subsidies.
And, as usual, the state is just handing over this money
while demanding nothing in return. The power generators, the
allegedly bankrupt utilities and dozens of sharp operators
manipulating the utility grid are all making out like
bandits while blackouts roll through California.
They're also using the "power shortage" as an excuse
to demand construction of more fossil fuel and nuclear
generators, burning natural gas, oil and coal and trying to
revive the atomic energy industry, all to the detriment of
the public and the environment, but all certain to generate
gigantic profits for the very people causing the crisis.
Here, instead, is what should happen:
* The public should take direct ownership of the utilities,
which have clearly failed. The system should be controlled
on a municipal basis, as in Sacramento and Los Angeles and,
hopefully, soon in San Francisco and other cities, towns
and counties across the state and nation.
* No new fossil fuel or nuke plants should be built.
All new construction money should go to building windmills,
solar panels and increasing efficiency. Wind is the cheapest
and fastest to build form of new generating capacity in the
world today. Solar photovoltaic panels should be generating
electricity atop virtually every rooftop in the nation,
starting with all new construction. All water should also
be heated by the sun, again starting with new construction.
* All this work should be done with union labor, starting
with the International Brotherhood of Electrical Workers,
which has been training its labor force for just such a
conversion.
The California crisis is not one of supply -- it's one
of manipulation by an obsolete private utility industry and
a fleet of cynical power generators. The solution is not to
feed them still more warehouses full of money. The solution
is to take them over, make them directly responsible to the
public that owns them, and switch them over to wind, solar
and increased efficiency.
They say electric deregulation will be different here in
Ohio. But the basic structure for corporate theft has been
put in place here as well -- and the solutions are ultimately
also the same.
Copyright (c) 2001 Columbus Alive, Inc. All Rights Reserved.
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