Today a federal grand jury
indicted Reliant Energy for manipulating the California energy market
as far back as June 2000. Reliant at one point charged the state $1900
per megawatt-hour of electricity, or about 6300% above historic energy
prices. Of course, Californians have known since the first set of
rolling blackouts that the private energy companies were using
deregulation to cheat the state out of billions of dollars. So, while
there may be some sense of vindication that an energy corporation has
been formally charged, even a conviction will ring hollow until we get
our money back.
In the meantime, ArnoldWatch has heard that the gov, who is currently
on vacation in Hawaii, will begin to press his energy policy in coming
weeks. There are some strong and unfortunate signs that the Governor
maintains the view that our electric system should be put back in the
hands of unregulated power companies like Reliant. It is rumored, for
example, that Arnold will name Joe Desmond to be his energy advisor.
Desmond is the CEO of an energy consulting firm that makes its money
helping businesses contend with the "volatile energy markets," as his
company (Infotility) website explains. Not surprisingly, as a member of
the Silicon Valley Manufacturing Group, a lobbying group for hi-tech,
Desmond has been an ardent advocate of legislation to maintain
deregulation. Got to keep those energy markets volatile.
Rather than listening to energy executives, Arnold should look at the
Reliant indictment as yet more proof that deregulation of electricity
was a miserable failure. So instead of pushing for Energy Deregulation
2, he should focus on pushing federal regulators to get the billions of
dollars in energy refunds that Californians are due from Energy
Deregulation Disaster, Episode 1.
With the Reliant indictment (and an earlier guilty plea by an Enron
trader and the taped recordings of other energy traders who laughed as
they shut down power plants for profit, etc) as his fuel, Arnold should
hop on a plane to Washington (is there a non-stop to DC on Aloha
Airlines?) and call in the cash.