Taxpayer Boondoggles, More Deregulation = Higher Prices, Taxes
The Bush-Cheney energy plan will make things worse for beleaguered Californians, who are facing an economic and public health catastrophe this summer as a result of deregulation, a California-based citizen group said today.
“California’s facing a catastrophe because a handful of energy companies have seized control of our electricity supply under deregulation, and have been manipulating the supply of electricity to create artificial shortages and maximize their profits,” said Harvey Rosenfield, president of the non-profit Foundation for Taxpayer and Consumer Rights. “The federal government could stop this assault and order rate reductions and refunds of overcharges. Instead, the Bush-Cheney plan calls for more deregulation, massive tax breaks for energy companies and the construction of multi-billion dollar boondoggles like nuclear power, all of which will benefit the same energy companies that are holding California hostage.”
With Bush-Cheney Plan, Crisis History Repeats Itself
FTCR noted that the last energy “crisis” to strike America was inspired not by supply shortages but by greed — of the OPEC nations, which in the 1970s used their control of petroleum supplies to create shortages and massive price hikes. American energy companies took advantage to profit from their resources as well. In response, the U.S. Congress passed a then-staggering multi-billion dollar billion package of tax breaks and grants to the energy industry to build power plants that would manufacture “synthetic fuels.” These plants ultimately became taxpayer-funded boondoggles, while nuclear power, hailed by the energy industry as a source of clean energy, turned out to be prohibitively expensive and a public health threat.
Ironically, California’s 1996 deregulation law required ratepayers to pay off over $20 billion of the California utility companies’ bad debts, most of which were incurred by the utilities as cost-overruns in construction of nuclear power plants in the 1970s.
“California’s economy, health and safety, and the quality of life in the Golden State are threatened by the skyrocketing energy prices inspired by deregulation. The Bush-Cheney plan not only does nothing to protect us against the energy cartel, it calls for more deregulation, higher taxes and prices.”
“In the last energy crisis, a handful of nations in the Middle East created a cartel to exploit their control over energy supplies; two decades later, a handful of energy companies from the Southern United States have created a cartel to exploit their control over our electricity supply,” said Rosenfield. “The only solution to the current crisis is to break the cartel: to bust the Texas-based OPEC.”