The need for public power, by Dan Berman
Source Dave Anderson
Date 01/01/07/22:31

From the SF Bay Guardian.

The Confederate Cartel's war against California

The current war over
electricity is a war over the future of

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withdrawn or pending.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

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.

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