Bailout Watch #69 – Aug 27, 2001

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

Bailout Watch #69 – Aug 27, 2001

Hunkering Down. The battle for billions of ratepayer dollars has been raging in Sacramento for months now, but a new front opens today when citizen volunteers with the Oaks Project open the doors to THE WAR ROOM in Sacramento. Prepared to meet legislators eye-to-eye and to challenge the lobbyists’ checkbooks with voter power, the troops will move up to the State Capitol to be the Bailout Watchdog. Equipped with the facts and in pursuit of justice, this band of volunteers will be identified by their yellow and black arm bands (extras are available if you’re in for a fight) and will be meeting with Legislators and reporting the politicians’ bailout votes back to the districts. If you’ll be in Sacramento, or can join the Bailout Watchdog for a day or two, contact The War Room at (310) 403-0284.

Dereg for Dummies. This is an occasional series that explains basic facts and concepts associated with the electricity crisis. In this installment: The "under-collection" myth.

1. AB 1890 froze rates at prices 50% higher than the national average at a time that electricity costs were falling. The result of setting rates artificially high: a massive, unwarranted transfer of cash from ratepayers to the utilities.

2. Any "under-collection," or debt, that the utilities may have developed as wholesale rates skyrocketed is dwarfed by the multibillion-dollar overcharge that ratepayers were forced to pay.

3. The reason the utilities’ costs rose in the first place is that the independent power producers engaged in gouging and market manipulation. A bailout would reward the gougers and unfairly burden ratepayers.

Crooks and thieves perceived as crooks and thieves. They’re known collectively as the Cartel. They’ve been called pirates, gougers, profiteers, and other epithets. They’re the independent power companies who have charged outrageous rates for power and who plunged the state into darkness when it suited their political goals. Now, according to the Sacramento Bee, those companies are launching a campaign to undo their "image problem" (read: public awareness of their misdeeds). Sacramento is already packed with industry lobbyists working to influence our elected representatives. Now the power producers want to pollute the airwaves and defile the pages of your local newspaper with energy industry propaganda. Expect to read/hear a lot of "We do good stuff," and not much about how those companies manipulated the electricity market and caused blackouts by staging a power shortage. But while the power companies are focusing on their image, our elected officials need to focus on the disastrous series of events that earned the companies that image, and to take steps to ensure that California will no longer be vulnerable to energy company abuses.

Reality Bites free-market zealotry. The pro-deregulation forces have long relied on the promise of lower rates for consumers as deregulation’s selling point. And convincing lawmakers and regulators to fall for that argument was relatively easy before anyone knew anything about deregulation. But now that the results are in, the free market ideology is falling flat. One of the continuing consequences of California’s deregulation fiasco has been to warn other states of the perils that result from turning over the power industry to private profiteers (See Bailout Watch #37). Arkansas, Alabama, Montana, New Mexico, North Carolina and Oklahoma have slowed their deregulation efforts after watching California take a fall. Nevada, to its credit, has halted deregulation completely. But with so much money at stake, don’t expect the energy companies to simply retreat from their attack on consumers; in fact, energy industry reps are using workshops and roundtables around the country to spread their propaganda. The California disaster, after all, was a godsend for the energy companies.

Join FTCR’s Blackout Brigades.

Judgment Day
435 Days Until November 5, 2002

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