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.