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Power Outrage

What's an irate ratepayer to do?

By Medea Benjamin


Editor's note: Last week, Gov. Gray Davis announced the formation of the state Public Power Authority, charged with lobbying for the construction of new power plants, finding new sources of alternative energy in the state, and encouraging consumers to conserve more electrical power. In addition, Davis said he will ask the state legislature to approve a multibillion-dollar bailout for Southern California Consolidated Edison, which critics contend is just the beginning of a much larger and even costlier public bailout for the state's bankrupt utility companies. Consumer rights advocates say enough is enough--it's time to give the power to the people.

I HAD LUNCH at St. Anthony's Church earlier this summer, where they give out hundreds of free meals every day. I sat next to John Dover, a part-time painter making $6.50 an hour, who told me his energy bill had gone up to $300 for the $1,000-a-month apartment he shares with a friend. The bill put him over the edge, and by July he was homeless. On the other side of me was Robert Harper, who works as a cook. When I asked Robert if he was affected by the energy crisis, he said the owner of the restaurant was trying to save money by turning off the kitchen fan, making his time at work hot and miserable.

Finally, across the table were two friends, Donna Miller and Betty Lewis. Donna was a heroin addict, and Betty was trying to get her friend into a methadone treatment center, but there is now a long waiting list due to state budget cuts. Donna, it appears, is another victim of the giant sucking sound of billions of dollars of state budget money going to the generator companies instead of to social services that would better the lives of the people of California.

My conversations at the lunch table reminded me of the concrete ways budget cuts and rising rates created by this crisis have devastated the working poor. And when ratepayers who live in the territory of the investor-owned utilities got socked this summer with the largest rate increases in this state's history, the impact worsened. This is especially true for larger households and for seniors who tend to stay home more and therefore use more electricity. Their bills have skyrocketed by up to 80 percent.

Sure, there are some programs run by the utility companies or the Salvation Army that offer some relief. But it is partial assistance and less than half of all eligible customers are enrolled in the programs.

It's not just low-income households that are hurting. Small businesses that squeeze by with a razor-thin profit margin are either going out of business or being forced to pass their increased costs on to consumers. As the summer has rolled on, more and more businesses have either gone under or moved out of the state.

Little wonder so many Californians are irate at being forced to pay for the gross mismanagement of the utility companies and the greed of the energy companies that are manipulating the supply of electricity, charging outrageous wholesale prices, and reaping exorbitant profits. While energy use since 1999 has increased by a mere 4 percent, profits of the energy companies have been astronomical. In the first three months of 2001, Houston-based Dynegy posted revenues of $14.2 billion, nearly triple the $5.3 billion reported in the same period a year ago. Enron's revenues from January through March nearly quadrupled to $50.1 billion, in contrast to revenues of $13 billion in the first three months of 2000. Compare this to the California Public Utility Commission definition of fair rates when it was regulating utility rates: cost plus 10-12 percent profit!

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Pilgrim's Progress: Medea Benjamin will speak at 4th annual Progressive Festival.

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IT IS OBVIOUS that since the onset of the crisis in May 2000, the Federal Energy Regulatory Commission failed to do its job of ensuring that wholesale electricity prices are "just and reasonable." We must pressure the legislators in Sacramento to pass a windfall profits tax. Or better yet, let's pressure Gov. Davis to use his power of eminent domain to take over plants that have been manipulating supply.

In addition to fighting for affordable rates, we need to build an energy system that is clean and green. It's time to wean ourselves from polluting fossil fuels and unsafe nuclear power, and instead shift massive resources into clean, renewable energy such as solar and wind. We are calling on the newly created California Power Authority to invest $2 billion in renewable energy. While this may have seemed like a massive sum a year ago, today, when we just signed long-term energy contracts worth $43 billion, $2 billion is a modest investment. We also need to support the Renewables Portfolio Legislation that is now wending its way through the Sacramento Legislature. This bill says energy wholesalers must sell at least 20 percent of their energy from renewable sources by the year 2010.

In the long term, if we want to break free of the yoke of the energy cartel and build a system of clean, affordable power, we must wrest control away from the corporations and put our energy system into public hands. More and more people are recognizing that energy is too precious a resource to be left to the vagaries of the market. They are also learning that public power is not a new or radical idea--it already exists in over 2,000 cities in the United States. Here in California, there are 31 public-power municipalities, including our largest city, Los Angeles, and our capitol city, Sacramento. These public-power entities have provided, on average, rates that are 20 percent lower than investor-owned utilities, and have run better programs supporting conservation and the use of renewable sources of energy.

If we truly want to put the needs of our people and the health of our environment before the greed of a handful of corporations, we must seriously organize. The good news is that this is starting. Consumer advocates, environmentalists, union members, representatives of religious organizations, and business owners are organizing throughout the state to take actions for a clean, affordable system under public control.


Medea Benjamin, the 2000 Green Party candidate for the U.S. Senate, is the founding director of the San Francisco-based corporate accountability group Global Exchange. She will be the keynote speaker at the Powershift rally for clean, affordable, public power to be held on the steps of the Capitol in Sacramento on Sunday, Sept. 9, from 2 to 6 p.m. For details, call 800/496-1994, ext. 251.

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From the August 30-September 5, 2001 issue of the Northern California Bohemian.

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