Month: January 2001

The Power Crisis: Naming Names

The local TV news has been milking the “power crisis” to the utmost, but with the usual superficiality that gives no information and names no names. While our TV news reporters are too busy fussing with their hair and makeup to dig for real facts, I’ve dug up a list of the companies that are making a killing, even as Seattle City Light begs the city council for double digit rate increases.

Dynegy Inc., a Houston company that sells power on the spot market, reported a 100% increase in profits during the fourth quarter of 2000.

Duke Energy Corp. is based in Charlotte, NC, but owns four California power plants that generate about 3,300 megawatts of power, enough to power half a million homes. Its earnings per share are up 17% over a year ago.

Reliant Energy, also based in Houston, owns five power plants in California.

Southern Energy/Mirant Corp. is headquartered in Atlanta, GA, and owns three California plants. It reported record earnings for 2000 that are up 12% over the previous year.

Powerex Corp. is the marketing arm of B.C. Hydro, which sells most of its power to utilities in British Colombia. However, Powerex reported that its earnings from US sales will exceed its earnings from BC sales for 2000.

And, finally, Enron Corp. sells an enormous amount of energy to California. Enron is also based in Houston and, unsurprisingly, says its 2000 income is up 32% over 1999.

You will have noticed that three of these companies–Dynegy, Reliant, and Enron–are based in Houston, George Bush Jr.’s old stomping grounds. Enron and its officers were his largest single source of campaign contributions last year. This should give you some idea of how Bush will address the power crisis. (Unless you have any doubts, Enron’s CEO Kenneth Lay sits on Bush’s energy transition team and attended his recent economic summit.) In addition, Southern Energy’s parent company donated $1.3 million to candidates in 2000, with $14,000 of that largesse specifically for George Bush, Jr.

Naturally, Bush announced last week that he would extend the price cap on wholesale rates charged to California–but only for a two-week period. After that, it’s back to a free-market free-for-all and obscene profits for his Houston buddies.

The question remains: given that the corrupt feds won’t do anything, what is the right solution for the power crisis?

Free market supporters say that consumer price caps should be removed, allowing bankrupt utilities to pass the inflated price of power down to you and me. This is the stupidest, most heartless piece of garbage I’ve ever heard. What they’re proposing is a permanent black-out that runs along on class lines: the rich and big businesses can have heat and electricity, while poor folks, small businesses, hospitals, schools, libraries, and government offices can sit in the dark. Believe me, the wholesale price won’t come down by itself, not for a long, long time. Building more gas-powered generators takes a while, and with the escalating price of natural gas, that form of energy won’t be cheap, either.

Governor Gray Davis has signed legislation that will bail out California’s bankrupt utilities with taxpayer money. Part of that bill involves the government buying power for the utilities to resell (since their credit is so bad now that they can’t purchase it themselves). He’s also spearheading a drive to re-purchase the power generators that were sold off during California’s stupid privatization drive, effectively reversing deregulation. At the end of the day, this will have been one hell of an expensive lesson for California’s taxpayers.

Here in Washington, Governor Locke announced a series of bills to deal with our own power crunch, with an emphasis on moving away from hydroelectric sources. Some of the bills are good, some not so good. For example, his notion of giving tax breaks to companies that want to build natural gas plants is flawed, because of rising natural gas rates … and, well, burning natural gas is cleaner than burning coal or handling nuclear waste, but it still produces nasty pollutants. One of his better ideas is to give incentives to companies to build solar and wind power generators. Last week’s sunny, dry, windy days are argument enough for this kind of solution.

Conservation drives, solar-powered appliances (if I can have a solar-powered hand calculator, why can’t I have a solar-power computer on my desktop?), generators that utilize gases from landfills and sewage processing plants, tidal power generators, fuel cells … the list goes on and on. We’re not lacking for solutions, only the will to implement them.

None of these technologies is “profitable” right now, which means the free market won’t touch them. We need another way to get to that future full of clean energy and conservation. Reversing the move towards deregulation is the first step.

One Planet – January 17, 2001

Israel’s Assassination Policy

As the Clinton administration hurries desperately to broker a peace deal between Israel and Palestine, Israel is undergoing its own political turmoil. Late last year the ultraconservative Likud party attempted to oust Israeli Prime Minister Ehud Barak and to persuade Benjamin Netanyahu to run in 2001 elections (Netanyahu was beating Barak in popularity polls by a large margin).

Barak slyly chose to resign as Prime Minister, which forced early elections for February 2001. This made it legally impossible for Netanyahu (who lives in the U.S. and no longer has Israeli residency status) to run. But the Knesset passed a bill to change the residency status law to allow Netanyahu to run. Nevertheless, Netanyahu stepped down, leaving Ariel Sharon the major Likud candidate. Sharon has overtaken Barak in recent opinion polls. (Sharon, as you will remember, is the man whose paramilitary occupation of the Al-Aqsa mosque touched off the current round of Israeli/Palestinian fighting.)

Sharon kicked off his campaign last week with a declaration that the Oslo peace accords are dead. He vowed that, if elected Prime Minister, he would not allow any of the Israeli settlements in the West Bank and Gaza strip to be dismantled (Sharon was one of the main forces behind Jewish settlement construction after the 1967 war). He would not divide and share Jerusalem with the Palestinians. He has also proposed a ridiculous plan to connect the West Bank and Gaza strip with a tunnel, so Palestinians will never travel across Israeli territory again (this doesn’t address the question of what to do about all the Palestinians who work at minimum wage jobs in Israel). And thousands of right-wing Israelis showed their support for Sharon’s views last week in a massive rally in Jerusalem.

Meanwhile, Barak is losing support within his own party. Polls have shown that Shimon Peres is far more popular than Barak; as a consequence, Barak has sent Peres to meet with Arafat and US negotiators. Peres may soon replace Barak as candidate for Prime Minister in the February elections. In the midst of this political upheaval, Israeli Defense Forces (IDF) Chief of Staff Shaul Mofaz has come under fire from senior IDF field officers. They complain that in recent weeks IDF soldiers in the field are violating open-fire orders because of Mofaz. Said one IDF officer: “When the chief of staff meets with soldiers in the field and urges them to act forcefully in the conflict with the Palestinians, more than a few soldiers interpret these words incorrectly–as if they have permission to act violently toward the Palestinians or to shoot even in cases where the regulations forbid it.”

While it’s heartening to hear that senior field officers have qualms about the violence, they give Mofaz and other high-ranking military officers too much benefit of the doubt. It’s highly likely that Mofaz intends IDF soldiers to shoot as many Palestinian protesters as possible. The Washington Post reports that the Israeli government has confirmed its policy of “systematically targeting and killing Palestinians deemed to be a security threat”–including unarmed Palestinian activists and high-ranking members of Arafat’s Fatah organization, as well as dozens of innocent bystanders. “Members of the Knesset said Prime Minister Ehud Barak admitted during a recent meeting of the foreign affairs and defense committee that the government was conducting the assassinations, even as some members pressed him to stop the policy.”

Israel’s High Court of Justice has agreed to hear an appeal against the assassination policy. The case is being brought by Siham Thabet, the wife of Thabet Thabet, a prominent Palestinian peace activist who was gunned down in cold blood as he left his home on New Year’s Eve. Witnesses say that Thabet was unarmed and that IDF soldiers could have arrested him if they chose; instead, they used M-16s to assassinate him. Doctors found 15 bullet holes in his chest.

Thabet was well known for organizing dialogues between Israelis and Palestinians and he helped found the Palestinian Committee for Understanding and Reconciliation with the Israeli People. Many of the dialogues were held at his home. Israeli peace activists, who’ve known Thabet for over a decade, were extremely angry about his murder. They say 8 or 9 people have been killed this way, while Palestinian sources claim more than 20 killed by IDF assassins. –Maria Tomchick

Sources: “Sharon’s ‘Oslo is dead’ declaration confirmed by Likud,” Agence France Presse, 1/10/01; “Sharon suggests tunnel to connect Palestinian blocs,” Ha’aretz, 1/11/01; “Army chief urged to denounce all unauthorized shootings,” Ha’aretz, 1/11/01; “Israelis Confirm Wider Policy of Assassinations,” Washington Post, 1/8/01, page A1; “Israel’s ‘assassination policy’ on trial,” BBC News, 1/9/01; and “Assassinated: Ten targets of Israeli campaign,” The Guardian (UK), 1/11/01.

One Planet – January 3, 2001

Two Viewpoints: Palestinian & Israeli

It’s hard to get a good understanding of what’s happening right now in the Middle East from following the US press. We’re inundated with the Israeli viewpoint and given some complaints from Palestinian negotiators removed from all context. Most of the coverage is of the violence–the bulk of it from Israeli military sources.

Below I’ve quoted three writers at length; the quotes are from articles that have appeared in the foreign press.

Amira Hass is a reporter for Ha’aretz, a Jerusalem daily newspaper; she’s virtually the only Israeli correspondent who lives among Palestinians, interviews them regularly, portrays the conditions of their daily lives, and reports on Palestinian issues. In her many articles, Hass had denounced the fact that Palestinians are subject to checkpoints and must get special permits to travel in and out of East Jerusalem and between

the West Bank and Gaza Strip, while Israeli Jews can travel wherever they wish, including on lands expropriated from the Palestinians. Hass has also documented that Palestinians are subject to water rationing in the summer, while Jewish settlers are not. Said Hass, in an article from Le Monde (reprinted in the Manchester Guardian Weekly, 12/28/00, p. 19): “Palestine has not suffered the horrors of Chechnya, but there has been a form of apartheid here for 33 years, and the Oslo accords did nothing to change that.” She goes on: “My hair stands on end when 40,000 people are cooped up at home for a month like animals.” In October, Hass wrote a scathing editorial on the curfew in Hebron; on October 31, the Israeli army responded by partially lifting the curfew. On November 1, she wrote: “How perfectly natural that 40,000 persons should

be subjected to a total curfew for more than a month in the Old City of Hebron in order to protect the lives and well-being of 500 Jews … and that Palestinian children … should be imprisoned and suffocating day and night … while the children of their Jewish neighbors are free to frolic.”

Alain Gresh, a French correspondent, recently wrote an analytical piece for Le Monde Diplomatique, entitled “Fighting for a proper peace” (12/8/00, p. 8). In this extended quote, he gives more information on the Palestinian position than any 50 articles from the New York Times or the AP newswire: “Day after day new settlements gnaw away at Palestinian land. They receive special protection in the form of thousands of Israeli soldiers, endless checkpoints at which Palestinians are routinely humiliated, and bypass roads reserved for settlers. In short their very existence makes any idea of a viable, sovereign, independent state seem like pie in the sky. “Israeli Prime Minister Ehud Barak, like each of his predecessors, approved

new housing–$500m was earmarked for settlements in the 2001 budget–even as he was declaring his wish to sign a lasting peace between the Israeli and Palestinian peoples… “These settlements, all within territory which in international law is unquestionably Palestinian, encapsulate the most explosive points of friction in the new Intifada. For its first message is clear: Israel must choose between peace and settlements–settlements that the International Criminal Court statutes, adopted in Rome in July 1998, described as a war crime… “In all events, the political objectives of the Palestinian leadership and the intifada are the same: the return of all the land seized in June 1967, including East Jerusalem. No more, no less. [Footnote: The Palestinian negotiators at Camp David did, however, accept the idea of an exchange of territories. If Israel wanted to annex lands with the highest concentration

of settlers, they should cede an equivalent amount to the Palestinian state.] The Palestinians say they have made a historic compromise by giving

up 78% of historic Palestine, and they refuse to give up more. So they are invoking international law–United Nations security council resolution 242 of 22 November 1967 and recognition of the Palestinians refugees’ right of return–plus a new mechanism for negotiations. As Marwan Barghouti, one of the key figures in the uprising, explains, there is a need to end Washington’s monopoly of the talks and to hold a ‘semi-international conference,’ mainly under UN auspices, in which the major powers and Israel, Palestine, Syria and Lebanon would take part… “Palestinian organizations and insurgents make the same answer to Israeli demands to end violence: there can be no return to the situation before 28 September, when the clashes began, because it was precisely that situation which created the conditions of the current explosion.” Linda Grant is a British novelist who has visited Israel several times recently to research her latest book When I Lived In Modern Times, recently published by Granta. She wrote an opinion piece for the

Manchester Guardian Weekly (11/2/00, p. 22), in which she described the attitudes of Israelis towards the Palestinians: “The first, and easiest to explain is the mentality of the religious right.

In the past month I have read time and again the assertion that the Jews stole the Palestinians’ country. To Orthodox Jews the facts are the exact opposite. They have the deeds to the country. You probably have a copy in your home. Take it down from the shelf. It’s the first part you want, the Old Testament, and the first chapter, Genesis, which contains the world’s first recorded real estate deal: ‘And I will give unto thee and to thy seed

after thee, the land wherein thou art a stranger, all the land of Canaan, for an everlasting possession.’ And if you want to know where that is, here

are the ground plans, the map: ‘Unto thy seed have I given this land, from the river of Egypt unto the great river, the river Euphrates.’ “As far as Orthodox Jews are concerned they are bunkered down in a tiny portion of what is rightfully theirs. As for how they defend what they have, and get their rightful due, the God of the Old Testament who visited 10 plagues on the Egyptians, including the slaying of the firstborn, is beyond the jurisdiction of Amnesty International… “On the first three of my visits to Israel, before last year’s elections, the Orthodox were what everyone wanted to talk about. The religious right had assumed too much power and was interfering in the everyday lives of secular and moderately religious Israelis … in opinion poll after opinion

poll about 70% of Israelis said repeatedly that they believed there would be a Palestinian state. They didn’t necessarily say they supported it, but they agreed on its inevitability. “And here, I came to think, was the heart of the Israeli mentality. Ordinary Israelis are sick of wars, sick of sending their teenage sons to the army, but they are deeply insecure about whether they can risk peace. It isn’t the memory of the Holocaust that drives them; it is the memory of more than 50 years of Arab nations telling them they will “drive the Jews into the sea.” The Israeli terror is that in delivering the justice to the Palestinians that the world demands, they may be signing their own death warrants … As though looking into a fairground distorting mirror, the world sees Israel as a giant, a monster–but the Israeli sees a tiny, cowering figure, the puny kid walking to school, tormented by bullies. He needs to make himself stronger, not weaker… “…The ugly truth, I think, is that what Israelis feel for the Palestinians is contempt, that they are losers, and this instinct is built into the founding ideals of the first Zionists. “Deep in the Jewish psyche is the legacy of cutting your losses, moving on,

reinventing yourself to survive. Deep in the Arab psyche is attachment to the land, to patience and endurance.”

The Free Market Sucks (Our Energy)

You’ve already received your first electricity bill for the winter and, damn, it’s high. Sure, it’s a little colder this year than last year, but that’s not the reason for the big increase. You can blame that on the free market.

Energy utilities have always operated under several layers of regulation to ensure an even distribution of power to everyone at all times. Not everyone pays the same price–large businesses often broker deals with energy companies that ensure them cheaper rates than you or I pay–but everyone usually pays a reasonable rate. Likewise, everyone has access to heat or lights with a simple flick of a switch; we don’t suffer brown-outs or rolling blackouts, like some areas of the Third World. This is accomplished under the oversight of the Federal Energy Regulatory Commission, whose sole responsibility is to regulate energy supply. The FERC falls under the Department of Energy.

But the Department of Energy and the FERC have long been under attack by oil, gas, and coal-extracting companies and power-generating firms. They don’t like it that a government agency can limit their profits. Under heavy lobbying, some legislators have begun to discuss downgrading the DOE from its cabinet-level position.

There are two levels to the power industry. There are power-generating companies–those firms that produce power by burning gas, oil, or coal or through hydroelectric dams, nuclear power plants, windmills, solar cells or other sources–and power-delivery companies (usually referred to as utilities), whose main role is to buy power from the power-generating companies, resell it to the public, and deliver it to your home or business. Some companies, like our local Puget Sound Energy, can do some of both, but for the most part companies specialize in one or the other.

Power-generating companies sell their power on the wholesale market to utilities and large, commercial customers, like Boeing and Kaiser Aluminum. Often these sales involve long-term contracts of several years duration with fixed prices, but not always. Sometimes, to meet extra demand because of a cold winter or very hot summer, utilities have to buy extra power on the “spot” market, at a price that’s higher than their contractual price.

Contracts between power-generating companies and utilities are governed by regulations, and utilities are limited in how much they can charge their customers. Rate increases have to be approved by state regulatory bodies. But power purchased on the spot market is not regulated. The spot market functions like a free market: anyone can buy from anyone else, and the price fluctuates according to demand. Until recently, the spot market has been small, and the prices reasonable, but deregulation has changed that.

Under FERC regulations, Washington State utilities are required to sell excess power generated in the summertime down to California utilities to power their air conditioners. In the wintertime, California utilities are supposed to sell their excess power back to us to run our heaters. This year, however, that neat equation completely broke down.

As you can probably guess, most of our “excess” power is produced by river water flowing through hydroelectric dams. But our dry summer and autumn left us with almost no excess power to sell to California. This left California’s three major power companies in a bind; they were forced to buy enormous amounts of power on the spot market, driving up the price. To push the price even higher, California power-generating companies took a lot of their power plants off line for “unscheduled maintenance”; consequently, they made out like bandits, selling extravagantly expensive power from a few generators. Spot prices, which have hovered around $20 to $30 per megawatt hour in recent years have shot up to as high as $5,000 per megawatt hour this year, and have hovered at the $500 to $1,000 range for days on end.

This is driving California’s three major utility companies to the edge of bankruptcy and is straining the pockets of Washington utilities, too. Washington power-generating companies, which now have a good supply of water behind their dams, are not eager to sell power to California utilities that don’t have the cash to pay. Earlier this month California declared an unprecedented Stage Three alert, when its power reserves fell below 1.5%, leaving the state on the brink of brown-outs.

The FERC stepped in and put a $150 price cap on energy sold in California. Washington utilities immediately protested, because prices have remained much higher here. Energy Secretary Bill Richardson has ordered Washington power plants to sell power to California utilities, regardless of their ability to pay, and this could make Washington prices climb even higher. Meanwhile, the California Public Utility Commission voted to sharply raise electricity rates in California to pay the more than $8 billion debt run up by California utilities buying power on the spot market.

Clearly, in California the free market has made billionaires of power-generating companies at the expense of the public. Free market promoters like to say that deregulation solves all problems and leads to better service and cheaper prices for everyone. That’s bullshit. More than half the states in the US have made some moves towards a deregulated energy market. A study done in March by the DOE shows that the power-generating companies and utilities in these states are more focused on their profit margins than on service, and power distribution has suffered as a consequence.

Forget California for a moment and let’s look in our own backyard. Rising power rates have forced a number of manufacturing companies to close down portions of their operations; these companies (Georgia-Pacific, Boeing, Equilon, Tesoro, and others) thought that the onset of deregulation would make prices fall. Instead of signing long-term, fixed-rate contracts, they decided to buy all of their power at spot rates. Now they can’t afford to pay power bills that have run as high as $60,000 per day.

Sure, it was a stupid move on their part to believe the free market rhetoric. But let’s not be smug; deregulation effects us, too. Seattle City Light has to buy a portion of its power on the spot market, particularly in the winter. Because of an increase in population and the high energy demands of the high-tech industry, that need is increasing, and our rates will increase accordingly.

In the meantime, local power generation won’t expand quickly enough to meet the need. Dryer summers and the need to spill water over dams (or dismantle some of them) to save endangered salmon will constrain hydroelectric sources. Who will build coal-fired and gas plants that may have to stand idle for most of the year, except for during the dry season? And do we really want these polluting sources of energy? If anything, there’s a crying need for more regulation, including a push to build clean energy sources, like windmill farms and solar generators.

Instead, we have criminal companies like Kaiser Aluminum, which is in a unique position to benefit from the whole deregulation boondoggle. Kaiser, you will remember, is the company that locked out its steelworkers in an effort to break the union. Kaiser is also one of a few aluminum companies that buys the bulk of the power generated by three Snake River dams that environmentalists want to breach. Kaiser has a sweet deal with the Bonneville Power Administration (BPA); its fixed contract allows it to continue to buy power at $22.40 per megawatt hour. A Kaiser company accountant figured out that Kaiser could make upwards of $52 million by laying off its workers and paying them reduced salaries, closing down the plant, and reselling its power back to the BPA at spot rates. This is piratical. No one should be able to steal money like this–but trust a company owned by Charles Hurwitz (who’s happily making a killing logging California’s last old-growth redwood trees) to take advantage of your need to heat your home in the winter.

Hurwitz is a free-market winner; you and I are the free-market losers. This energy deregulation madness needs to stop now and be reversed as soon as possible.

Powered by WordPress & Theme by Anders Norén