Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Support Our Annual Fund Drive! We only shake you down once a year, but when we do we really mean it. It costs a lot to keep the site afloat, and our growing audience, well over TWO million unique viewers a month, eats up a lot of bandwidth — and bandwidth isn’t free. We aren’t supported by corporate donors, advertisers or big foundations. We survive solely on your support.
FacebookTwitterGoogle+RedditEmail

Report: Cal Energy “Crisis” Was A $71 Billion Hoax, And It’s Not Over

by Alexander Cockburn And Jeffrey St. Clair

“It Wasn’t a Shortage, It Was a Shakedown” Report: Cal Energy “Crisis” Was A $71 Billion Hoax, And It’s Not Over

Santa Monica, CA. –The Foundation for Taxpayer and Consumer Rights (FTCR) issued the first comprehensive review of the California energy crisis today, exactly one year after the first rolling blackouts hit California. Using government and industry data, the 58 page report, entitled “Hoax: How Deregulation Let the Power Industry Steal $71 Billion From California,” shows that the California electricity system did not fail according to the laws of supply and demand, as it has been widely portrayed.

The California energy crisis, instead, was a hoax — orchestrated by a power industry freed from price regulation — that will cost $2,200 for every Californian. For nearly a year, the energy industry, state officials and President Bush claimed there was a shortage of energy in California. But the crisis suddenly disappeared late last spring after Governor Gray Davis committed the state to spending at least $43 billion for energy over the next twenty years.

The report shows that the power industry manufactured blackouts and threatened more of them as tools to gain unprecedented profits and overpriced, long-term contracts during the crisis. The report also warns that unless the state of California regains control of its electricity supply, and makes it publicly accountable, additional artificially-created crises will occur in the immediate future.

“The energy crisis was a hoax, set up by deregulation, to suck billions of dollars out of the state,” said Harvey Rosenfield and Doug Heller of FTCR, a non-profit, non-partisan research and advocacy group based in California. “The utilities, energy companies and power traders backed deregulation because they knew it would be a license to steal. Once freed of state scrutiny — once the cop was off the beat — they held the state hostage until we agreed to pay their demands. When they stole as much as they thought they could get away with, the ‘crisis’ mysteriously disappeared — leaving the people of California stuck with the tab.”

“It wasn’t a shortage, it was a shakedown,” FTCR said.

Among its findings, the report shows that:

The rolling blackouts, which occurred on generally low-demand days, were not caused by a shortage of power plants, but by energy companies looking to maximize their prices and profits. Throughout late 2000 and 2001, when prices skyrocketed, California used less electricity than prior years, in which prices were stable and there were no blackouts. Californians overpaid $8.5 billion for electricity between January and October of 2001 alone — and will overpay at least another $20.5 billion over the next decade. While the U.S. entered a recession during the first half of 2001, power companies, such as Enron, Duke and Reliant, reaped unprecedented windfalls.

The crisis suddenly ended — without the predicted summer blackouts — not because of Californians’ conservation, mild weather or new power plants, but because the energy industry had achieved its goals, and was facing investigations and legislation that threatened to “kill the goose that laid the golden egg”: deregulation.

More Crises Unless Deregulation Ended

The report concludes with a series of policy prescriptions including the development of a long-range plan for a hybrid energy system that is part private and part publicly-owned power, and well regulated. The study also calls for regulatory and statutory changes that will save consumers billions of dollars, such as a retroactive ban on “direct access,” a re-allocation of the electricity rate structure and the formation of a Consumer Utility Board.

CONTACT: Doug Heller – 310-392-0522 x309

Jeffrey St. Clair is editor of CounterPunch. His new book is Killing Trayvons: an Anthology of American Violence (with JoAnn Wypijewski and Kevin Alexander Gray). He can be reached at: sitka@comcast.net. Alexander Cockburn’s Guillotined! and A Colossal Wreck are available from CounterPunch.

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine

minimag-edit

September 28, 2016
Eric Draitser
Stop Trump! Stop Clinton!! Stop the Madness (and Let Me Get Off)!
Ted Rall
The Thrilla at Hofstra: How Trump Won the Debate
Robert Fisk
Cliché and Banality at the Debates: Trump and Clinton on the Middle East
Patrick Cockburn
Cracks in the Kingdom: Saudi Arabia Rocked by Financial Strains
Lowell Flanders
Donald Trump, Islamophobia and Immigrants
Shane Burley
Defining the Alt Right and the New American Fascism
Jan Oberg
Ukraine as the Border of NATO Expansion
Ramzy Baroud
Ban Ki-Moon’s Legacy in Palestine: Failure in Words and Deeds
David Swanson
How We Could End the Permanent War State
Sam Husseini
Debate Night’s Biggest Lie Was Told by Lester Holt
Laura Carlsen
Ayotzinapa’s Message to the World: Organize!
Binoy Kampmark
The Triumph of Momentum: Re-Electing Jeremy Corbyn
David Macaray
When the Saints Go Marching In
Seth Oelbaum
All Black Lives Will Never Matter for Clinton and Trump
Adam Parsons
Standing in Solidarity for a Humanity Without Borders
Cesar Chelala
The Trump Bubble
September 27, 2016
Louisa Willcox
The Tribal Fight for Nature: From the Grizzly to the Black Snake of the Dakota Pipeline
Paul Street
The Roots are in the System: Charlotte and Beyond
Jeffrey St. Clair
Idiot Winds at Hofstra: Notes on the Not-So-Great Debate
Mark Harris
Clinton, Trump, and the Death of Idealism
Mike Whitney
Putin Ups the Ante: Ceasefire Sabotage Triggers Major Offensive in Aleppo
Anthony DiMaggio
The Debates as Democratic Façade: Voter “Rationality” in American Elections
Binoy Kampmark
Punishing the Punished: the Torments of Chelsea Manning
Paul Buhle
Why “Snowden” is Important (or How Kafka Foresaw the Juggernaut State)
Jack Rasmus
Hillary’s Ghosts
Brian Cloughley
Billions Down the Afghan Drain
Lawrence Davidson
True Believers and the U.S. Election
Matt Peppe
Taking a Knee: Resisting Enforced Patriotism
James McEnteer
Eugene, Oregon and the Rising Cost of Cool
Norman Pollack
The Great Debate: Proto-Fascism vs. the Real Thing
Michael Winship
The Tracks of John Boehner’s Tears
John Steppling
Fear Level Trump
Lawrence Wittner
Where Is That Wasteful Government Spending?
James Russell
Beyond Debate: Interview Styles of the Rich and Famous
September 26, 2016
Diana Johnstone
The Hillary Clinton Presidency has Already Begun as Lame Ducks Promote Her War
Gary Leupp
Hillary Clinton’s Campaign Against Russia
Dave Lindorff
Parking While Black: When Police Shoot as First Resort
Robert Crawford
The Political Rhetoric of Perpetual War
Howard Lisnoff
The Case of One Homeless Person
Michael Howard
The New York Times Endorses Hillary, Scorns the World
Russell Mokhiber
Wells Fargo and the Library of Congress’ National Book Festival
Chad Nelson
The Crime of Going Vegan: the Latest Attack on Angela Davis
Colin Todhunter
A System of Food Production for Human Need, Not Corporate Greed
Brian Cloughley
The United States Wants to Put Russia in a Corner
Guillermo R. Gil
The Clevenger Effect: Exposing Racism in Pro Sports
FacebookTwitterGoogle+RedditEmail
[i]
[i]
[i]
[i]