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Apr 08, 2004 - 05:05 PM
Reliant on Unregulated Energy Companiesby Doug Heller
Today a federal grand jury indicted Reliant Energy for manipulating the California energy market as far back as June 2000. Reliant at one point charged the state $1900 per megawatt-hour of electricity, or about 6300% above historic energy prices. Of course, Californians have known since the first set of rolling blackouts that the private energy companies were using deregulation to cheat the state out of billions of dollars. So, while there may be some sense of vindication that an energy corporation has been formally charged, even a conviction will ring hollow until we get our money back.
In the meantime, ArnoldWatch has heard that the gov, who is currently on vacation in Hawaii, will begin to press his energy policy in coming weeks. There are some strong and unfortunate signs that the Governor maintains the view that our electric system should be put back in the hands of unregulated power companies like Reliant. It is rumored, for example, that Arnold will name Joe Desmond to be his energy advisor. Desmond is the CEO of an energy consulting firm that makes its money helping businesses contend with the "volatile energy markets," as his company (Infotility) website explains. Not surprisingly, as a member of the Silicon Valley Manufacturing Group, a lobbying group for hi-tech, Desmond has been an ardent advocate of legislation to maintain deregulation. Got to keep those energy markets volatile.
Rather than listening to energy executives, Arnold should look at the Reliant indictment as yet more proof that deregulation of electricity was a miserable failure. So instead of pushing for Energy Deregulation 2, he should focus on pushing federal regulators to get the billions of dollars in energy refunds that Californians are due from Energy Deregulation Disaster, Episode 1.
With the Reliant indictment (and an earlier guilty plea by an Enron trader and the taped recordings of other energy traders who laughed as they shut down power plants for profit, etc) as his fuel, Arnold should hop on a plane to Washington (is there a non-stop to DC on Aloha Airlines?) and call in the cash.
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