Energy companies hold consumers hostage

Published on

PRI – Marketplace (6:30 pm EST)

DAVID BROWN, anchor: The klieg lights were burning brightly in a congressional hearing room today as lawmakers sat down to bicker about the big blackout. Sparks flew as Democrats accused Republicans of holding a reliable energy grid hostage to a broader energy agenda that includes new drilling in the Arctic. Republicans claimed the whole energy picture needs complete rewiring. Commentator and consumer activist Jamie Court says if energy companies get their way, consumers will be the real hostages.

JAMIE COURT: The truth is that unregulated energy companies will never deliver reliable energy, and that’s because they’re paid more when energy is scarce and unreliable. But energy companies don’t want us to know that. Instead they’ll demand complete deregulation to keep Broadway lit and operating rooms open. It’s called blackout blackmail. Ken Lay’s colleagues in the energy industry will be calling for erasing environmental standards for power plants, scrapping state price controls and doing away with the so-called patchwork of state regulations that they say keeps the grid from operating smoothly. They’ll tell us that the antiquated transmission system is the fault of a negligent society, not a greedy market. So, by their logic, society, not corporations, should pay.

How do I know all this? Because I fought the same blackout blackmail in California. Once state controls over the price and supply of electricity were eliminated, Enron devised schemes with names like Death Star and Get Shorty to create the appearance of shortages and make electricity more costly. Californians paid tens of billions of dollars in overcharges as blackout blackmail because producers could demand any price to keep the lights on. Just like California, most of the states impacted by the East Coast blackout were deregulated, and these states cut back on grid maintenance to save money.

Independent power system operators, those folks who manage the electricity load, now tell us that long-distance power trades made possible by deregulation overburden the grid. Electricity is a necessity of life that shouldn’t be hostage to the vicissitudes of the market, so Congress should be demanding stronger public controls and legal obligations for delivering reliable energy, not the reverse. Why should the public spend at least $50 billion to build a superhighway for corporations that will collect the tolls and make more money by misdirecting the traffic? In Los Angeles, this is Jamie Court for MARKETPLACE.

BROWN: Commentator Jamie Court is the author of “Corporateering: How Corporate Power Steals Your Personal Freedom and What You Can Do About It.”

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

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases