$28 Billion Bailout Tax Keeps Free Market In Shackles
One of the biggest and most aggressive electric utility companies outside of California, Texas-based Enron Corp, has pulled out of California's residential electric utility market. The company has been unable to compete in the purportedly free utility market because of a $28 billion bailout tax on all utility customers to pay off California utility companies' bad investments in nuclear power plants and other sources of energy.
"Enron's move is the proof that the purportedly free California market has been shackled by the $28 billion bailout tax imposed on Californians by utility barons and the legislature," said Harvey Rosenfield, a founder of "Californians against Utility Taxes," or CUT, a coalition of consumer, taxpayer and small business organizations, that has proposed a November, 1998 ballot initative to rollback electric rates 20% and stop the $28 billion utility tax.
The $28 billion utility tax was unanimously approved by the state legislature in 1996, to bail utility companies out of their bad investments -- principally white elephant nuclear power plants -- so that the utility companies could compete with non-nuclear utility companies in a "deregulated" market.
"Enron's decision to stop marketing residential customers proves that electric deregulation is an absolute fraud designed to bailout utility companiesí bad investments and protect their profits," said Rosenfield. "This is the smoking gun that utility deregulation is a hoax. There is no free market. The people of California will be able to end this fraud through the CUT initiative."
The bailout tax appears on utility bills (as a "CTC" charge) -- along with a phony rate "reduction" intended to fool the public into believing that they are saving money when in fact they are being gouged.
"The utility tax is the greatest heist in California history. Unless we stop it, it will force every California family to pay an extra $2,000 in taxes over the next ten years. Consumers and small businesses are joining together to stop the utility tax by supporting the C.U.T. initiative," said Rosenfield, who authored the successful 1988 insurance reform Prop 103.