BAILOUT WATCH: Keeping an eye on the energy industry and the politicians
Bailout Watch #32 – Apr 12, 2001
Unless the elected leaders of California take immediate action, California itself will soon be bankrupt. Since January, when the utilities stopped paying for power, California officials have spent at least $4 billion (they refuse to say exactly how much) to buy electricity at the extortionary prices commanded by the energy cartel — the eight companies who bought all those plants for a combined total of $3.2 billion. The cartel’s ability to manipulate supplies and create blackouts threatens to make the power bill for 2001 $72 billion. That’s a California-Killer. Period. Future generations will look back and wonder how we could have been so weak as to allow these people to destroy our state.
The Utility Rescue Diversion. Some state officials, still living in the long-gone world where the utilities were huge campaign contributors, have wasted months dithering over the utilities’ financial health. This has been a deadly diversion. The battle to be fought is over control of our electricity supply, which is in the hands of the cartel. The wholesale electricity generators have declared war on California; the Governor’s feeble effort to beg for long term contracts at outrageously expensive prices has failed, and could do nothing to protect us against the cartel this summer or in the future, when the much-vaunted construction of new plants will turn out to be irrelevant since those, too, are owned by the cartel.
One Point of Light. Our new President obviously fails to grasp what his energy advisors (a.k.a. the energy industry) are doing to California by refusing to order immediate refunds and price caps on the cartel, the regulation of which passed from the state to the federal government under deregulation. After California’s economy crashes in a Sarajevo-like collapse, the western states will follow — but by that time, the nation’s economy as a whole will be sliding into the morass. When the last of California’s thousand points of light wink off, the Bush Presidency will be finished, etched into history as the Herbert Hoover of his time. But that’ll be little consolation.
Push The Button. It’s time for all of us to face the facts. Sit down and think for a minute what California will be like with continuous rolling blackouts and the state’s treasury depleted. Think earthquakes; think Rodney King; think the depression. Hey, all you "free market" ideologues: your money will be worthless and none of your toys are going to work. There’s only one choice, and it’s to give the generators an ultimatum: forty-eight hours to refund overcharges and reduce rates to reasonable levels, or we will commandeer the power plants. Under established law, we need only pay the reasonable value of the plants — not a price based on their extortion — and we can offset against the price any illegal overcharges (there’s a minimum $6 billion right there). President Bush and his buddies have left us no choice but the unthinkable.
First Strike. Remember Paul Revere. The generators are coming. Now is the time to seize the plants, before the hot weather hits.
572 Days Until November 5, 2002