BAILOUT WATCH: Keeping an eye on the energy industry and the politicians
Bailout Watch #38 – May 04, 2001
Duke Energy meet Chuck Quackenbush. When you send a politician a secret note that says you’ll give him money if he halts investigations into your company, it might be considered a bribe. Whether Duke’s effort was improper can only be determined by law enforcement, but we’re wondering why Duke Energy was so secret about their proposed "solution" to the crisis they have helped create. (Once the memo was leaked, Duke issued a news release on it and stuck it up on its web site as if it was an important contribution to public policy in California. Nice try). Since Duke Energy is fairly new to California, it may not be familiar with another situation in which lawsuits were dropped and investigations into corporate malfeasance were suppressed in exchange for a secret "settlement." Last year, dirty deals with insurance companies provoked state and federal investigations, cost former California Insurance Commissioner Chuck Quackenbush his job and got several people indicted. Duke: you’re not trying to turn Davis into a Quack, are you?
Sec. Of State (and Governor hopeful) Bill Jones has got to make up his mind. In a letter to Co-President Dick Cheney, Jones offers some reasonable and consumer-oriented solutions to the energy crisis, but his plan shows symptoms of internal ideological conflict. For example, he calls for the development of "State- or locally-owned ‘Peaker Plants,’" which would provide back-up power in times of shortage, but he also rails against public power, saying that "California should not be in the energy business — period." Well, which is it? On the one hand, Californian Jones recognizes that the unregulated, private marketplace will not provide sufficient supply and the state needs to step in to protect the reliability and affordability of our energy system. On the other hand, Ideologue Jones succumbs to the corporate fantasy that the government should never intercede in the free market, let alone play a competitive role in the production and sale of a commodity. Or, Jones may simply like "lemon socialism" — government takes the risk by building the expensive "peakers," while letting the private guys reap the rewards. Jones denounces "socializing the delivery of power," apparently forgetting that deregulation got us into this mess and has forced the state to buy power. Finally, Jones calls for state-backed loans to rescue the utilities — better than the bailout the Governor has proposed, of course, but how does Jones square that with his "let’s get the government out of the power business" position?
Mickey MOU(se). Another question: do we really want an unaccountable state agency with no expertise — the DWR — cutting secret deals with energy generators on way over-priced long-term contracts under the advice of private consulting firms who stand to profit from the related bond sales? We’ve seen how bad deregulation is, so why aren’t we insisting that the state’s power purchase activities be overseen and scrutinized by the Public Utilities Commission, rather than treated like private transactions in a private market? The Gov.’s MOU with Edison requires transfer of regulatory authority to DWR. Why are legislators bleating about DWR secrecy instead of using their constitutional authority and duty to review the contracts? Give the Gov. five days to hand ’em over, then repeal DWR’s authority to exist. Congressional committees oversee super-secret agencies like NSA without leaks. Or is the Gov. afraid that if lawmakers knew the truth, they would shut the program down anyhow?
550 Days Until November 5, 2002