[A-List] California Energy Crisis Was a $71 Billion Hoax - FTCR (fwd)

[Andre Gunder Frank <franka@xxxxxxx>]

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                    ANDRE  GUNDER  FRANK
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---------- Forwarded message ----------
Date: Thu, 17 Jan 2002 16:47:50 PST
From: shniad@xxxxxx
To: shniad@xxxxxx
Subject: California Energy Crisis Was a $71 Billion Hoax - FTCR

http://www.consumerwatchdog.org/utilities/rp/rp002169.pdf

Date: Thu, 17 Jan 2002 15:11:22 -0500
From: Ratepayer Revolt 
To: utilities@xxxxxxxxxxxxxxxxxxxx
Subject: FTCR Report: The California Energy Crisis Was a $71 Billion Hoax
Sender: owner-utilities@xxxxxxxxxxxxxxxxxxxx

The Foundation for Taxpayer and Consumer Rights (FTCR) issued the first
comprehensive review of the California energy crisis today, exactly one year
after the first rolling blackouts hit California. Using government and
industry data, the 58 page report, entitled "Hoax: How Deregulation Let the
Power Industry Steal $71 Billion From California," shows that the California
electricity system did not fail according to the laws of supply and demand,
as it has been widely portrayed. The California energy crisis, instead, was
a hoax ­ orchestrated by a power industry freed from price regulation ­ that
will cost $2,200 for every Californian.

The report is available at
http://www.consumerwatchdog.org/utilities/rp/rp002169.pdf

For nearly a year, the energy industry, state officials and President Bush
claimed there was a shortage of energy in California. But the crisis
suddenly disappeared late last spring after Governor Gray Davis committed
the state to spending at least $43 billion for energy over the next twenty
years. The report shows that the power industry manufactured blackouts and
threatened more of them as tools to gain unprecedented profits and
overpriced, long-term contracts during the crisis. The report also warns
that unless the state of California regains control of its electricity
supply, and makes it publicly accountable, additional artificially-created
crises will occur in the immediate future.

"The energy crisis was a hoax, set up by deregulation, to suck billions of
dollars out of the state," said Harvey Rosenfield and Doug Heller of FTCR, a
non-profit, non-partisan research and advocacy group based in California.
"The utilities, energy companies and power traders backed deregulation
because they knew it would be a license to steal. Once freed of state
scrutiny ­ once the cop was off the beat ­ they held the state hostage until
we agreed to pay their demands. When they stole as much as they thought they
could get away with, the 'crisis' mysteriously disappeared ­ leaving the
people of California stuck with the tab."

"It wasn't a shortage, it was a shakedown," FTCR said.

Among its findings, the report shows that:

* The rolling blackouts, which occurred on generally low-demand days, were
not caused by a shortage of power plants, but by energy companies looking to
maximize their prices and profits. 

* Throughout late 2000 and 2001, when prices skyrocketed, California used
less electricity than prior years, in which prices were stable and there
were no blackouts. 

* Californians overpaid $8.5 billion for electricity between January and
October of 2001 alone ­ and will overpay at least another $20.5 billion over
the next decade. 

* While the U.S. entered a recession during the first half of 2001, power
companies, such as Enron, Duke and Reliant, reaped unprecedented windfalls. 


* The crisis suddenly ended -- without the predicted summer blackouts -- not
because of Californians' conservation, mild weather or new power plants, but
because the energy industry had achieved its goals, and was facing
investigations and legislation that threatened to "kill the goose that laid
the golden egg": deregulation.

More Crises Unless Deregulation Ended

The report concludes with a series of policy prescriptions including the
development of a long-range plan for a hybrid energy system that is part
private and part publicly-owned power, and well regulated. The study also
calls for regulatory and statutory changes that will save consumers billions
of dollars, such as a retroactive ban on "direct access," a re-allocation of
the electricity rate structure and the formation of a Consumer Utility
Board.