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Sunday, Jul 21, 2024

Editorial—No heroes in the electricity rate scandal

Last week’s lukewarm response of the Federal Energy Regulatory Commission (FERC) to San Diego’s electricity crisis should not surprise anyone. FERC, after all, was one of the leading culprits in developing a deregulated energy industry that allows the kind of price gouging we’ve seen this summer.

Nor should it surprise anyone that the Congressional hearing also held last week by the House Commerce Subcommittee on Energy and Power did little more than pass the buck to FERC. Congressional lawmakers, too, are ultimately responsible for the power debacle; Congress approved deregulation at the federal level.

There are no heroes in this scandal. None at all.

For the past four months, politicians and so-called regulators at both the state and federal levels have been tossing responsibility for the outrageous profiteering of the power industry back and forth like a political grenade with the safety pin pulled, each hoping the inevitable blast will occur in someone else’s lap.

State lawmakers who approved deregulation put the blame at the doorstep of the California Public Utilities Commission (CPUC). CPUC commissioners, however, claim deregulation took responsibility for overseeing electricity rates out of their hands and gave it to FERC.

Under federal law, FERC has the responsibility to ensure electricity wholesale rates are “just and reasonable.” But don’t expect the federal commission to act justly and reasonably. FERC is little more than a way station for energy industry officials between private industry jobs, and has stubbornly been pressing energy deregulation at all levels despite early warning signs of its impracticality.

As reported here last month, FERC washed its hands of any responsibility over local energy rates two years ago when what was tantamount to a dress rehearsal for our current crisis took place in the Midwest. So it wasn’t surprising FERC commissioners last week went back to the wash basin and repeated their Pontius Pilate routine.

FERC Chairman James Hoecker repeatedly told the House panel his commission had no power to extract illegal profits from power producers and refund the money to consumers.

FERC Commissioner Curt Herbert Jr. seemed to have been asleep during all the testimony about power industry price gouging. With a touch of Alice-In-Wonderland logic, Curt insisted the excessively high electricity rates in San Diego were due to government imposed wholesale price caps and insisted the caps be removed entirely.

After the two hearings, only one FERC commissioner conceded energy rates were not just and reasonable. His three fellow commissioners remained mum.

The Congressional response was just as disappointing. Three local House members ,Reps. Brian Bilbray, R-Imperial Beach; Bob Filner, D-San Diego; and Duncan Hunter Hunter, R-El Cajon , lent their support to a bill introduced by Filner calling for refunds to electricity consumers. However, fellow committee member Rep. Joe Barton, R-Texas, said there would be no support for the bill in Congress, leaving the federal response completely up to FERC.

During both hearings, the testimony of energy industry officials bled with insincerity. Here were the very executives who wrote the state’s deregulation law, lobbied for its passage, oversaw its execution and made millions in profits from its loopholes feigning innocence and pleading for relief.

No heros there, either.

At the state level, recently passed laws placing temporary caps on electricity rates amount to only Band-aid remedies. They fail to get to the roots of the problem, roots that lay snarled and entangled in the legislation state lawmakers passed establishing deregulation.

In fact, at no time over the past four months has there been a single mea culpa from any of the people responsible for imposing this economic disaster on us. At no time has anyone taken responsibility for a deregulation scheme that was poorly conceived and foolhardy in its execution.

True relief from energy price gouging won’t come to San Diego or the state until those responsible for this debacle admit their failure and take steps to correct a system was designed in its infancy to be manipulated by the energy cartels. Only by admitting that energy deregulation in this state is a failure can we start rebuilding our economic infrastructure.

But first, someone has to stand up and take responsibility.

, Martin Hill


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