Bailout Watch #49 – May 31, 2001

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BAILOUT WATCH: Keeping an eye on the energy industry and the politicians

Bailout Watch #49 – May 31, 2001

Businesses for the Bailout? Looks like those business leaders who have been lobbying in support of an Edison bailout (see BW#45) might have their wish granted: the latest trial balloon from Sacramento is to force only the largest customers of Edison to pay $5 billion to bail out the utility. There’s some superficial appeal to such an arrangement; after all, the largest users of electricity heavily lobbied for the 1996 deregulation law, and have been its principal beneficiaries. So, if they want to become forced investors in Edison and PG&E, why not let them…. BUT NO. WE’RE AGAINST IT ANYHOW. First of all, Edison got itself into this mess; why should anyone be forced to rescue them? Second, businesses will just pass-through the bailout in the form of higher prices to consumers. Third, we hear that while the high-tech community may be willing to pay the bailout, other big users aren’t on board. Finally, and most important, we see this as a strategy by legislators to quietly open the door to a bailout; once it’s underway in the legislative process, with business lobbyists no doubt fiercely opposing the deal, ratepayers will end up getting stuck with the tab, as usual. Bait and Switch. Sound familiar? Remember how the PUC at first said that the bulk of the recent 40% rate hikes would fall on big businesses, not consumers? But then the Big Boys stepped in, got Governor Give Away to make a few calls, and, sure enough, residential and small business ratepayers get socked with most of the increase. Nope. We’re not buying it.

NorCal lawmakers push for SoCal rate hikes. Here’s something that is starting to annoy us: the legislators working hardest on proposals that would require Edison’s ratepayers to pay billions — equivalent to another 40% increase — to bail it out are from northern California . They’re not going to have to live with their handiwork, should they succeed. Nor would they be accountable to the voters whose rates they so blithely wish to jack up on behalf of the politically-generous utility company. We think they ought to at least pay a visit to the people whose pockets they intend to pick again, just like their colleagues did in 1996. In case they don’t, we’ll definitely want to pay them a visit. They are: John Dutra (D-Fremont 916-319-2020) and Joe Nation (D-San Rafael 916-319-2006). Visit them at the California Assembly website.

Dump it in Bush’s backyard. The nuclear industry is simply beside itself, now that Bush-Cheney are offering to resurrect it from the dead. There are quite a few serious reasons why this method of boiling water became extinct in the 1980s. One is that it’s ridiculously expensive. Another is that it produces nuclear waste, which is toxic for millennia. Update for the post-Three Mile Island generation: nuke waste been a huge issue since — surprise — people do not want to raise their families within the radioactive plume radius of a plant undergoing meltdown. Only three sites in the U.S. accept even the less-harmful low-level radioactive waste…. one of which won’t be where President Bush lives. The Texas Legislature has killed a bill to create a new nuclear waste dump in Texas, the Wall Street Journal reports. But heh, its no biggie for the industry: its DC lobbyist characterized nuclear waste as "one of those nagging issues on the periphery" of the nuclear power debate.

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