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Emboldened, President Bush Will Push To “Enronize” Nation’s Electricity System

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With Control of Congress, Republicans Plan More Deregulation


Santa Monica, CA– Consumer advocates fear that President Bush will push for further energy deregulation in the wake of Tuesday’s Republican take-over of Congress, according to consumer advocates with the non-profit, non-partisan Foundation for Taxpayer and Consumer Rights (FTCR). Post-election news reports (Wall Street Journal 11/7, e.g.) indicate that energy will be among the President’s top priorities with the new congress and consumer advocates expect that the stalled Energy Policy Act of 2002 will be revived to further deregulate the nation’s electricity generation and transmission systems while ignoring the lessons of Enron and the California energy crisis.

“The Bush energy plan had always been straight from Enron‘s playbook, and the President is still listening to Enron even after it collapsed in disgrace,” said Doug Heller, senior consumer advocate with the Foundation for Taxpayer and Consumer Rights. ” The President is dead-wrong if he thinks that Tuesday’s vote signals a shift in the public mood about corporate behavior and oversight of energy companies. Americans will not soon forget what Enron and the energy industry got away with in recent years, and the public will reject politicians who think that it’s now ok to return to business as usual.”

According to FTCR, at the heart of the energy proposal will be a repeal of the Public Utilities Holding Company Act of 1935 (PUHCA), which protects the public against powerful monopoly utilities. A repeal of PUHCA would open the door for the consolidation of unregulated power companies, leaving regulators virtually powerless to stop market abuses. After gaining an exemption from PUHCA in 1994, Enron was able to dominate power markets virtually unchecked. Instead of strong barriers to anti-competitive behavior and high-risk gambles by energy companies, the Bush plan relies on the alleged efficiency of the unregulated marketplace and the honesty of big energy corporations, both of which have proven indefensible in recent years.

The Bush energy policy, outlined in the 2001 National Energy Plan and developed by Vice President Cheney after secret meetings with Enron officials, also seeks to expand “market-based rates” for electricity. This is the same electricity pricing scheme that allowed power companies to overcharge Californians by billions of dollars during the energy crisis of 2000 and 2001. In January, FTCR issued a 58-page report entitled HOAX: How Deregulation Let the Power Industry Steal $71 Billion From California documenting the devastation caused to consumers and taxpayers when the state of California deferred to the Federal Energy Regulatory Commission’s (FERC) “market-based rates” system. FTCR’s Hoax report is available at http://www.consumerwatchdog.org

“Consumers across the nation will face a California-style disaster if power companies are allowed to charge unregulated prices for electricity. Electricity is too vital to the public safety and economy to leave in the hands of unregulated power companies, as President Bush proposes. The Enron scandal and the California energy crisis demonstrate the need for more oversight of the energy system, not less. The American people know that our energy system must be carefully regulated, and President Bush and the Republican Congress must set out to protect consumers ahead of the energy companies,” said Heller.

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Consumer Watchdog
Consumer Watchdoghttps://consumerwatchdog.org
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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