As the cost of electricity continues to grow, so does the magnitude of the power industry’s deceptions, which still sticks to its same lame excuses for the outrageous rate hikes.
But as more information surfaces, it is becoming abundantly clear that the energy cartels are being anything but truthful. A recent report issued by the California Public Utilities Commission and the state Electricity Oversight Board found there was “evidence of questionable behavior” and “gaming” by power producers and distributors, warning that our current energy woes were “only the first manifestations of problems in our electricity system.”
The cartels insist the price hikes are due to increases in power usage by our high-tech, cyberized society and summer air conditioning demands, as well as increases in the cost of natural gas, now the preferred fuel for generating electricity.
What they don’t tell us can be found in reading obscure reports issued by the federal government. For instance:
– Overall growth of electricity use in the United States has declined in recent years, not grown. According to the federal Energy Information Administration’s Annual Energy Outlook 2000 report, U.S. electricity consumption growth is projected at 1.2 percent through 2010. That’s down from 6 percent in the 1960s. The projection included the growing use of computers and other office equipment.
– The decline in consumption growth rate and competition under deregulation was predicted to lower electric rates for California residential, commercial and industrial users by 2 to 3 percent each year.
– However, energy consumption growth worldwide is expected to be 76 percent higher in 2020 than it was in 1997, according to the EIA. Most of this growth is found in Asia and Latin America. The EIA also points out that energy companies in the United States are becoming global conglomerates, either bought up by foreign companies or buying overseas firms. That means less local control, oversight and access to one of our society’s most crucial commodities.
– EIA calls 1999 a “banner year” for energy-related mergers and acquisitions, with a record 26 electricity M & As; announced. A loosening of the Federal Energy Regulatory Commission (FERC) antitrust policies is responsible.
– Energy conglomerates tout mergers as a way to produce savings that can be passed on to consumers. However, a December 1999 EIA study of recent energy mergers showed this wasn’t necessarily true. The study of two recent mergers showed they provided no benefit to consumers and actually hurt stockholder shares prices , not to mention they also reduced competition.
– Many mergers involve the convergence of electric companies and natural gas firms. According to the EIA, “many electric utility holding companies are merging with natural gas companies that specialize in production, processing, pipeline operation and storage.” Nearly all U.S. natural gas transmission companies have merged with electricity companies, according to EIA.
– Many of these mergers, according to the EIA, were approved by FERC with little review or consideration over the impact. Two years ago, natural gas companies began an industrywide reduction of production in order to drive up costs. Electric utilities blame this price increase, in part, for the hike in electric rates. They don’t mention their parent companies own the gas producers, too.
– San Diego Gas & Electric perpetuates the lie they have no control over the cost of electricity since, under deregulation, they only buy the power from producers and pass it along to consumers at cost. But SDG & E; is owned by Sempra Energy, a holding company that also owns generation facilities. Not surprisingly, Sempra recently reported a 34 percent increase in profits, an increase helped significantly by its ownership of electric generation and natural gas companies.
(Under seige by ratepayers and local officials, Sempra CEO Stephen Baum announced last week his support for further wholesale price caps on electricity.)
More than a century ago, the railroads used their hegemony over commerce to price gouge and profiteer. They were reined in by antitrust regulation.
Today, our nation’s experiment with energy deregulation, particularly in San Diego, has shown the power industry to be no more mature or disciplined than the railroads of the late 1800s. With investigations now probing their questionable activities, it may be only a matter of time before the energy industry finds itself rolling down the same regulatory tracks.
