Dim Bulb

[Dave Farber <dave () farber net>]

> Date: Fri, 15 Aug 2003 13:13:45 -0700
> From: Severo Ornstein <severo () poonhill com>
>
>
> This just in from Znet.
>
> S.
>
> POWER OUTAGE TRACED TO DIM BULB IN WHITE HOUSE
>
> THE TALE OF THE BRITS WHO SWIPED 800 JOBS FROM NEW YORK, CARTED OFF $90
> MILLION, THEN TONIGHT, TURNED OFF OUR LIGHTS
>
> by Greg Palast
>
> I can tell you all about the ne'er-do-wells that put out our lights
> tonight. I came up against these characters -- the Niagara Mohawk Power
> Company -- some years back. You see, before I was a journalist, I worked
> for a living, as an investigator of corporate racketeers. In the 1980s,
> "NiMo" built a nuclear plant, Nine Mile Point, a brutally costly piece
> of hot junk for which NiMo and its partner companies charged billions to
> New York State's electricity ratepayers.
>
> To pull off this grand theft by kilowatt, the NiMo-led consortium
> fabricated cost and schedule reports, then performed a Harry Potter job
> on the account books. In 1988, I showed a jury a memo from an executive
> from one partner, Long Island Lighting, giving a lesson to a NiMo honcho
> on how to lie to government regulators. The jury ordered LILCO to pay
> $4.3 billion and, ultimately, put them out of business.
>
> And that's why, if you're in the Northeast, you're reading this by
> candlelight tonight. Here's what happened. After LILCO was hammered by
> the law, after government regulators slammed Niagara Mohawk and dozens
> of other book-cooking, document-doctoring utility companies all over
> America with fines and penalties totaling in the tens of billions of
> dollars, the industry leaders got together to swear never to break the
> regulations again. Their plan was not to follow the rules, but to
> ELIMINATE the rules. They called it "deregulation."
>
> It was like a committee of bank robbers figuring out how to make
> safecracking legal. But they dare not launch the scheme in the USA. Rather,
> in 1990, one devious little bunch of operators out of Texas, Houston Natural
> Gas,
> operating under the alias "Enron," talked an over-the-edge free-market
> fanatic, Britain's Prime Minister Margaret Thatcher, into licensing the
> first completely deregulated power plant in the hemisphere.
>
> And so began an economic disease called "regulatory reform" that spread
> faster than SARS. Notably, Enron rewarded Thatcher's Energy Minister,
> one Lord Wakeham, with a bushel of dollar bills for 'consulting'
> services and a seat on Enron's board of directors. The English
> experiment proved the viability of Enron's new industrial formula: that
> the enthusiasm of politicians for deregulation was in direct proportion
> to the payola provided by power companies.
>
> The power elite first moved on England because they knew Americans
> wouldn't swallow the deregulation snake oil easily. The USA had gotten
> used to cheap power available at the flick of switch. This was the
> legacy of Franklin Roosevelt who, in 1933, caged the man he thought to
> be the last of the power pirates, Samuel Insull. Wall Street
> wheeler-dealer Insull creator of the Power Trust, and six decades before
> Ken Lay, faked account books and ripped off consumers. To frustrate
> Insull and his ilk, FDR gave us the Federal Power Commission and the
> Public Utilities Holding Company Act which told electricity companies
> where to stand and salute. Detailed regulations limited charges to real
> expenditures plus a government-set profit. The laws banned "power
> markets" and required companies to keep the lights on under threat of
> arrest -- no blackout blackmail to hike rates.
>
> Of particular significance as I write here in the dark, regulators told
> utilities exactly how much they had to spend to insure the system stayed
> in repair and the lights stayed on. Bureaucrats crawled along the wire
> and, like me, crawled through the account books, to make sure the power
> execs spent customers' money on parts and labor. If they didn't, we'd
> whack'm over the head with our thick rule books. Did we get in the way
> of these businessmen's entrepreneurial spirit? Damn right we did.
>
> Most important, FDR banned political contributions from utility
> companies -- no 'soft' money, no 'hard' money, no money PERIOD.
>
> But then came George the First. In 1992, just prior to his departure
> from the White House, President Bush Senior gave the power industry one
> long deep-through-the-teeth kiss good-bye: federal deregulation of
> electricity. It was a legacy he wanted to leave for his son, the
> gratitude of power companies which ponied up $16 million for the
> Republican campaign of 2000, seven times the sum they gave Democrats.
>
> But Poppy Bush's gift of deregulating of wholesale prices set by the
> feds only got the power pirates halfway to the plunder of Joe Ratepayer.
> For the big payday they needed deregulation at the state level. There
> were only two states, California and Texas, big enough and Republican
> enough to put the electricity market con into operation.
>
> California fell first. The power companies spent $39 million to defeat a
> 1998 referendum pushed by Ralph Nadar which would have blocked the
> de-reg scam. Another $37 million was spent on lobbying and lubricating
> the campaign coffers of legislators to write a lie into law: in the
> deregulation act's preamble, the Legislature promised that deregulation
> would reduce electricity bills by 20%. In fact, when San Diegans in the
> first California city to go "lawless" looked at their bills, the 20%
> savings became a 300% jump in surcharges.
>
> Enron circled California and licked its lips. As the number one
> life-time contributor to the George W. Bush campaign, it was confident
> about the future. With just a half dozen other companies it controlled
> at times 100% of the available power capacity needed to keep the Golden
> State lit. Their motto, "your money or your lights." Enron and its
> comrades played the system like a broken ATM machine, yanking out the
> bills. For example, in the shamelessly fixed "auctions" for electricity
> held by the state, Enron bid, in one instance, to supply 500 megawatts
> of electricity over a 15 megawatt line. That's like pouring a gallon of
> gasoline into a thimble -- the lines would burn up if they attempted it.
> Faced with blackout because of Enron's destructive bid, the state was
> willing to pay anything to keep the lights on.
>
> And the state did. According to Dr. Anjali Sheffrin, economist with the
> California state Independent System Operator which directed power
> movements, between May and November 2000, three power giants physically
> or "economically" withheld power from the state and concocted enough
> false bids to cost the California customers over $6.2 billion in excess
> charges.
>
> It took until December 20, 2000, with the lights going out on the Golden
> Gate, for President Bill Clinton, once a deregulation booster, to find
> his lost Democratic soul and impose price caps in California and ban
> Enron from the market.
>
> But the light-bulb buccaneers didn't have to wait long to put their
> hooks back into the treasure chest. Within seventy-two hours of moving
> into the White House, while he was still sweeping out the inaugural
> champagne bottles, George Bush the Second reversed Clinton's executive
> order and put the power pirates back in business in California. Enron,
> Reliant (aka Houston Industries), TXU (aka Texas Utilities) and the
> others who had economically snipped California's wires knew they could
> count on Dubya, who as governor of the Lone Star state cut them the
> richest deregulation deal in America.
>
> Meanwhile, the deregulation bug made it to New York where Republican
> Governor George Pataki and his industry-picked utility commissioners
> ripped the lid off electric bills and relieved my old friends at Niagara
> Mohawk of the expensive obligation to properly fund the maintenance of
> the grid system.
>
> And the Pataki-Bush Axis of Weasels permitted something that must have
> former New York governor Roosevelt spinning in his wheelchair in Heaven:
> They allowed a foreign company, the notoriously incompetent National
> Grid of England, to buy up NiMo, get rid of 800 workers and pocket most
> of their wages - producing a bonus for NiMo stockholders approaching $90
> million.
>
> Is tonight's black-out a surprise? Heck, no, not to us in the field
> who've watched Bush's buddies flick the switches across the globe. In
> Brazil, Houston Industries seized ownership of Rio de Janeiro's electric
> company. The Texans (aided by their French partners) fired workers,
> raised prices, cut maintenance expenditures and, CLICK! the juice went
> out so often the locals now call it, "Rio Dark."
>
> So too the free-market cowboys of Niagara Mohawk raised prices, slashed
> staff, cut maintenance and CLICK! -- New York joins Brazil in the Dark
> Ages.
>
> Californians have found the solution to the deregulation disaster:
> re-call the only governor in the nation with the cojones to stand up to
> the electricity price fixers. And unlike Arnold Schwarzenegger, Gov.
> Gray Davis stood alone against the bad guys without using a body double.
> Davis called Reliant Corp of Houston a pack of "pirates" --and now he'll
> walk the plank for daring to stand up to the Texas marauders.
>
> So where's the President? Just before he landed on the deck of the Abe
> Lincoln, the White House was so concerned about our brave troops facing
> the foe that they used the cover of war for a new push in Congress for
> yet more electricity deregulation. This has a certain logic: there's no
> sense defeating Iraq if a hostile regime remains in California.
>
> Sitting in the dark, as my laptop battery runs low, I don't know if the
> truth about deregulation will ever see the light --until we change the
> dim bulb in the White House.
>
> -----
>
> Palast is the author of the New York Times bestseller, "The Best
> Democracy Money Can Buy" (Penguin USA 2003) and the worstseller,
> "Democracy and Regulation," a guide to electricity deregulation
> published by the United Nations (2003, written with T. MacGregor and J.
> Oppenheim).  See Greg Palast's award-winning reports for BBC Television
> and the Guardian papers of Britain at www.GregPalast.com. Contact Palast
> at his New York office: media () gregpalast com.

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