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The Whistleblower #17 - Apr 09, 2002
If you care about energy costs and public health, you should be concerned about the US Senate's energy plan. The Foundation for Taxpayer and Consumer Rights (FTCR) has joined with Public Citizen, Greenpeace, and dozens of other consumer, environmental and public interest advocates that are opposing US Senate Bill S. 517, the Daschle-Bingaman Energy Policy Act. The groups sent a letter to all members of the United States Senate today arguing that "The bill buys a one-way ticket to Enronworld." The letter points out that "interruptions and skyrocketing energy prices in California were caused by deregulation, and S. 517 further deregulates the energy industry by repealing [the Public Utility Holding Company Act]." The bill further favors the energy industry by failing to include meaningful provisions for a renewable energy portfolio standard, and by including at least $3 billion in tax breaks for the oil/gas industry and $2.3 billion in taxpayer subsidies for the nuclear industry. Additionally, Senators caved in to the auto industry, passing amendments that weakened automobile fuel efficiency standards that were inadequate to begin with. The Senate, just back from spring break, takes up the energy legislation again this week.
(Wood) Chipping away at California's long-term energy contracts. First let it be said that the power contracts signed by California with private energy companies last year are bad news across the board, and last week Cal. Governor Davis canceled one of the high priced energy contracts. The Governor is showing some muscle, setting an example, right? Here's the problem: the contract he cancelled (a $35.5 million agreement with Soledad Energy) represents less than 1/10 of one percent of the $43 billion in overpriced power purchases. Moreover, with the state reeling from its dependence on natural gas, it is odd that the nixed contract happens to be one of the few energy deals actually using a renewable resource (biomass -- the company burns wood-waste and tree trimmings to make electricity) rather than gas. If Davis wants to show that he is taming the energy industry he'll need to do more than take on a small contract for renewable energy; he must go after the high priced and more massive contracts with companies like Sempra. Last week Davis did shorten the longest contract -- a 20-year deal with Calpine, but appears to have allowed the company to continue to overcharge the state for the next decade. So they'll stop gouging in 10 years; cold comfort for ratepayers who are worried about next month.
No such thing as "Too Big To Fail." Last Saturday marked the one-year anniversary of PG&E's bankruptcy filing, and a look back at the aftermath of bankruptcy provides a powerful lesson for policymakers: private corporations that threaten the government, be it with blackouts or economic dislocation, should be dealt with firmly, not coddled. Last year, California legislators spent thousands of hours debating whether and how to "rescue" the utility, along with its counterpart, Southern California Edison. But after a year of bankruptcy experience, the main argument in favor of bailing out the utilities -- that a bankruptcy would lead to costly, disruptive blackouts -- never materialized. Not only have there been no bankruptcy-related blackouts but, despite PG&E's generally outrageous behavior in the bankruptcy proceedings (paying out huge executive bonuses, for example), PG&E customers are in just about the same place as they were prior to the bankruptcy filing; if lawmakers had actually passed a bailout, it would have been money for nothing. In short, when politicians think that private companies are too big to fail, the politicians fail the public.
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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