councilor.org
| Source | Dave Anderson |
| Date | 01/01/07/22:31 |
| From the SF Bay Guardian. www.sfbg.com
The Confederate Cartel's war against California The current war over electricity is a war over the future of California. By Daniel M. Berman The Confederate Cartel of Southern, Enron, and Reliant is holding California for ransom and looting it dry. There's no doubt Pacific Gas and Electric will try again to push through a huge percentage rate increase - larger than the 10 percent (on average) granted by the California Public Utilities Commission this week. And the bounty will go to holding companies in Texas and the Carolinas, giving them more cash to buy out PG&E Corp. and Edison International. Attorney Jason Zeller, testifying for the normally mild-mannered Office of Ratepayer Advocates, told the commission on December 29 that "this enormous transfer of wealth ...[is] ... the kind of thing that nations have gone to war over." Is the threat of a Confederate takeover of our energy future for real? Look what has happened to California's biggest bank and biggest telephone company in the past five years: the Bank of America is now owned by a bank holding company based in North Carolina, and PacBell is now owned by SBC Communications, Inc. out of Dallas. High electric rates will also drive business out of California to the benefit of Texas and the Southeast, the bedrock of Republican support. John Bryson, CEO of Edison International, the holding company that owns Southern California Edison, has said that in 10 years there will be only 10 energy conglomerates left standing worldwide, and naturally he hoped Edison would be one of them. His own holding company has siphoned off over $5 billion from its regulated utility's ratepayers to sate its imperial ambitions in Mexico, England, Australia, and Indonesia. But he may lose out to the Confederate Cartel. Data compiled by the Federal Energy Regulatory Commission shows there were 55 applications for mergers from January 1996 through July 2000. None was disapproved; 44 have been approved; the rest were withdrawn or pending. Will President George W. Bush, who believes "the free market" will solve our electricity problems, oppose further takeovers by hostile interests? Lacking a public power agenda, Governor Gray Davis will have no credible alternative to caving in to PG&E and Edison and the out-of-state generators – as all governors and all legislatures have done in the past. To escape this bind he should take lessons from Franklin D. Roosevelt. As governor of New York, FDR noticed that electricity cost $19.50 for a typical 250 kilowatt-hour bill in Albany but only $2.79 across the border in Ontario. So he created the New York State Power Authority – along the lines of publicly owned Ontario Hydro – to reduce the disparity. In September 1932 he delivered a major address in Portland in which he asserted that the people have the "undeniable right" to set up "government-owned and operated utility services as a national yardstick to prevent extortion against the public." As President, Roosevelt went on to pass the Public Utilities Holding Company Act, which is still our sturdiest bulwark against the depredations of the power cartel, and to create the Tennessee Valley Authority and the Rural Electrification Administration (REA), which brought electricity to vast regions the private utilities had refused to serve. For millions of people the rural electric co-ops were the greatest conquest of the New Deal. Sacramento's own Municipal Utility District (MUD) was able to buy out PG&E in 1946 with the help of an $11 million REA loan. To this day public ownership means lower rates. This December a typical PG&E residential customer paid $54.52 for 500 kilowatt-hours of electricity, compared to $36.89 for a SMUD customer. The end of the rate freeze promises to bring more pain to PG&E's captive residential customers, if the experience of San Diego Gas & Electric customers this summer is a guide. Average electric bills in San Diego for 500 kilowatt-hours almost tripled – from $51.60 in August 1999 to $138.50 in August 2000. By comparison, electric bills of the Los Angeles Department of Water and Power stayed stable at just over $50 for the same months. And LADWP was even talking about lowering rates in 2001. How should Davis deal with this blackmail by the Confederate Cartel and their local allies? He should have his staff draft a law which re-regulates everyone and requires all generators (including PG&E and Edison) to file tariffs. These generators should be allowed 10 percent on their investment, like the old days, before deregulation. He should file a bill for an excess-profits tax to get the money back, as Prime Minister Tony Blair did against the gouging English generators in the mid-1990s. He should create a California Power Authority to buy out the systems for the generation, transmission, and distribution of electricity. He should remove the barriers to the creation of publicly owned electricity systems. He should create a California Power Authority with the authority to issue bonds to buy out the systems for the generation, transmission, and distribution of electricity. In 1995, after over a decades of fighting over its Shoreham Nuclear Power plant, New York State created the Long Island Power Authority to buy up the Long Island Lighting Company, financed with $7.3 billion of tax-exempt bonds. Shoreham was decommissioned and residential rates dropped from 16.8 cents/kilowatt-hour in 1994 to 11.8 cents in 1998. Time is of the essence. Governor Davis should act now, even if he must go against his natural caution and previous indoctrination in the wonders of the free market. Just as war is too important to leave to the generals, electricity is too important to turn over to the Confederate Cartel. Daniel M. Berman is the co-author (with John T. O' Connor) of Who Owns the Sun? People, Politics and the Struggle for a Solar Economy. He lectures on energy, labor, and the environment and co-founded the Coalition for Local Power in Davis, California. |
Copyright (c) 1998, Joongpil Cho