Corporate Scandals Have No Impact on Bush Administration's Handling of Energy Deregulation's Failure
Santa Monica, CA -- A decision by the Federal Energy Regulatory Commission (FERC) today will expose California electricity consumers to renewed price gouging and market manipulation, according to consumer advocates with the Foundation for Taxpayer and Consumer Rights (FTCR). Despite a massive body of evidence and outright admissions that unregulated power companies gamed the California energy market in order to dramatically increase prices in 2000 and 2001, the FERC lifted the relatively successful power price caps installed to curb prices last year. The new limit of $250/MWh (up from the current $92/MWh) takes effect on October 1, 2002.
"The price caps had actually restored some sanity and protections to California's energy system," said Doug Heller, senior consumer advocate with FTCR. "It is utterly senseless to remove the one thing that had worked to protect consumers from the profiteering associated with California's deregulation experiment. Despite all the talk about restraining out-of-control corporations, the Bush administration is turning the power system over to the Enrons and others who stole billions from California during the California energy crisis."
In a January 2002 report, prior to revelations about market ploys such as Enron's "Death Star" and other companies' wash trades, FTCR argued that the private power industry had aggressively manipulated the unregulated power markets in order to massively increase energy prices above historic levels. Further, FTCR noted, the growing push to re-regulate power, including the imposition of price caps, were a major reason that power prices began to fall in the summer of 2001. There have been no California blackouts since the price caps were in place.
"Everybody knows that the California energy crisis was a crime perpetrated by unregulated power companies, but, by lifting the price caps, FERC has reloaded the energy companies' guns. And when this order takes effect in October, it will once again be open season on California consumers."