The Whistleblower #8
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The Whistleblower

The Whistleblower #8 - Mar 06, 2002

California Edition

The Private Utilities' Commission.
Governor Davis is trying to sneak one by you. Yesterday, while all the newspapers and TV stations were preparing their election coverage, Governor Davis appointed former Edison executive Michael Peevey to fill a vacancy at the Cal. Public Utilities Commission, which has raised rates by a record 50% this year to bail out the utilities (and the Governor). Davis tried to hide this conflict-laden appointment during a busy news day, but FTCR made sure reporters knew… This forced a Davis flack to issue a statement urging the news media to ignore us in favor of "progressive groups and individuals that have been constructive in California's energy debate" and who support Peevey. And who might these "progressives" be? A self-described environmental group, "Environmental Defense," that works closely with the utility industry and regularly shills for deregulation in California; a labor union that supports Davis's reelection; and a staffer for Consumers Union, which immediately denied that it supported Peevey in a letter to Davis.

As FTCR noted on Monday (see WB #7), Peevey has had a long career as an executive in regulated and unregulated energy businesses. He recently sold his New Energy, Inc. to AES, one of the power profiteers that took California to the cleaners last year, for approximately $100 million. In 1997 he told Fortune Magazine: "That's when I began to have creeping doubts about the wisdom of regulation. I was like a fallen Catholic. I no longer believed." Putting Peevey on the PUC isn't just letting the fox guard the chicken coop -- it's offering the fox a chicken dinner. We're urging the Senate to reject this appointment; stand by for details on how you can help.

Davis PUC to order consumers to pay for big business's electricity. The California Public Utilities Commission appears set to force residential ratepayers and small businesses to pay higher electric rates to cover the $8 billion owed by big businesses. The big energy users want us to pay for the long term energy contracts that everyone is complaining about, while they take advantage of better deals they arranged with the power gougers in recent months. The PUC has the ability to reign those businesses in and require them to share the cost of the energy crisis, but Davis appointee Geoffrey Brown would rather have the average consumer pick up the tag. The state's biggest businesses that will benefit from this proposal (which is expected to pass today) have worn down the carpet outside Brown's office over the past six months. Somebody should compare Commissioner Brown's visitor log with Governor Davis's contribution record.

PG&E top brass gives self $64 million in bonuses for their stellar 2001 performance (a.k.a. bankruptcy). If your child came home with an "F" on a report card, would you reward it with an ice cream cone? Multiply that by 64 million. Because that's how many ice cream cones PG&E execs can buy with the bonuses they doled out to themselves for a year (2001) in which the company lost its bet on deregulation and declared bankruptcy. According to Dow Jones Newswires, PG&E bonuses increased -- that's right the company went bankrupt but bonuses INCREASED -- by $14 million in 2001 over the previous year because more corporate officers were rewarded, in addition to upper management. About a quarter of the bonuses come directly from consumer electricity rates. The truth is, these executives should have been fired for their failed deregulation policy that drove their company into bankruptcy and the state of California into blackouts and a fiscal emergency. Shareholder note to self: oppose re-election of the PG&E Board of Directors on next proxy ballot.
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The Foundation for Taxpayer and Consumer Rights (FTCR) is a non-profit, non-partisan advocacy organization. For over a decade FTCR and its advocates have exposed and challenged injustices that betray the public trust. The Whistleblower newsletter addresses core issues of the corporate and governmental crises of today and blows the whistle on the brewing fiascos of tomorrow. FTCR does not take a position on candidates for any elected office.
For more information about FTCR's work, to DONATE, to join the fight, or to comment, visit our web site at www.consumerwatchdog.org. 310-392-0522 xt.309.
© 2002 FTCR



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