BAILOUT WATCH: Keeping an eye on the energy industry and the politicians
Bailout Watch #87 – Jan 31, 2002
Gray Davis for Governor? Apparently the Gov, with new polling info coming into his campaign office each day, is looking for a way to reduce utility rates for voters (ahem, that is, consumers) in August or September, just in time for the election. How would he finagle this Summer Surprise? The inside line says that Davis will leverage budget reserves for the long-delayed $12.4 billion bond sale, bringing in truckloads of cash that would be applied to California electricity costs, providing relief from the outlandishly high long-term power contracts that the Governor signed last year. Thus, the Governor borrows money, which ratepayers will repay for two decades, to give them a temporary rate decrease. (This is exactly what Cal. lawmakers did in 1996, creating a phony 10% rate reduction to mislead voters when the politicians passed deregulation.) Even though electric bills would still be higher than is reasonable, and even though this price-cut would be temporary, Davis will no doubt make a big announcement proclaiming final victory in the energy debacle (ahem, until after you vote me back into office).
Loretta Lynch for Judge? It’s true that Public Utilities Commission President Loretta Lynch went back on her promise not to use rate increases to subsidize utilities, going around state law in order to bail out Edison in federal court and offering PG&E a similar deal in federal bankruptcy court. Many in Sacramento now believe that Ms. Lynch and the PUC are set to approve a rate agreement — a pact to allow the Calif. Department of Water Resources (DWR) to remain free of public scrutiny as it manages the state’s energy system. With the PUC apparently ready to hand over regulatory authority to the unaccountable Department of Water Resources, one has to wonder, after Pres. Lynch publicly and vociferously opposed this "agreement" many times, what she is getting in return for this latest in a series of capitulations to Governor Davis. Some Capitol sources say that there is a Judicial nomination in the works.
Accountants for Deregulation? Why would Arthur Andersen, one of the nation’s largest accounting firms, lobby Congress to allow big energy companies to be held unaccountable? According to the San Diego Union Tribune and the Center for Public Integrity, Andersen spent millions lobbying federal lawmakers on energy deregulation issues throughout the late nineties. Why does an accounting firm care about electricity issues? Maybe that’s why Enron paid Andersen tens of millions of dollars in non-audit related consulting fees over the years. From shredding regulations to shredding documents, Andersen is a full service accounting firm. With accountants lobbying against accountability, profession-wide reform is needed to safeguard America’s books.
Ken Lay, Acting Vice President. Vice President Cheney has repeatedly denied, on principle, he insists, access to any information regarding his secret meetings with former Enron CEO Ken Lay and staff. He has also denied time and again that the Administration has done anything to help Enron despite Ken Lay’s financial largesse toward George Bush and the Bush campaign. All of which is going to make it difficult for Cheney to explain why the National Energy Policy that his clandestine energy team published last May reads like a clip-and-paste job from a policy wish-list memo handed to Cheney by Ken Lay at a meeting one month earlier and unearthed by the San Francisco Chronicle yesterday. And while Ken Lay was writing U.S. energy policy, the Vice-President was doing everything he could to keep that information off the books. Sounds like he’d fit in real well at Enron. The memo is available at consumerwatchdog.org.