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Jun 04, 2004
CONTACT: Doug Heller - 310-392-0522 x309
Enron Tapes Should Be Nail In Coffin of Schwarzenegger, Nuñez Proposals to Deregulate
Consumer Group Asks Gov, Speaker to Listen to Tapes And End Advocacy of "Direct Access"Consumer advocates called on California Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nuñez to give up deregulation components of their energy proposals in light of the devastating revelations found in recently uncovered taped conversations among Enron employees.
The tapes, which are available from CBS News, provide a curse-laden play-by-play of how energy companies stole millions from California and manipulated the deregulated energy market in the name of profit.
"The voices of Enron employees celebrating and mocking California's last energy crisis should be the final evidence you need to stop any effort to deregulate any portion of California's electricity system," wrote Douglas Heller, Executive Director of the Foundation for Taxpayer and Consumer Rights (FTCR), in a letter to Schwarzenegger and Nuñez today. "As the Enron employees … illustrate, in an unregulated environment there is an overriding incentive to create shortages that push electricity prices up. Whether it is callously cheering on natural disasters like the fires or intentionally taking plants off line … deregulation will lead to energy shortfalls and skyrocketing prices."
Read the letter.
FTCR has opposed legislation by Nuñez (AB 2006) and a proposal by Schwarzenegger that would each allow big businesses to buy power directly from unregulated power companies. According to FTCR, these proposals, known as "direct access," would balkanize the state's electricity system by initially allowing big energy users to buy cheaper unregulated power, while residential and small business consumers pay higher rates for electricity. Once the deregulated structure was in effect, the energy companies would return to the gouging schemes exposed in the tapes and by various other documents collected during investigations into energy companies' practices during the California energy crisis.
"These tapes are like an alarm clock that should wake you out of the dream that deregulation can work… [Lawmakers who passed the first deregulation] did not have the benefit of these tapes or the blackouts or bailouts or bankruptcies that came along with energy deregulation. These tapes lay out the foul and indecent truth that unregulated energy companies will never deliver reliable electricity because they are paid more when energy is scarce and the supply unreliable. You cannot ignore these warnings," FTCR's letter concluded.
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