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Dear CAC Supporter,
Please take time to read the enclosed letter which addresses federal energy legislation now before Congress and the U.S. Senate. It is critical that the anti-consumer provisions in the proposed legislation (S. 517) be removed before passage of the bill. Congress has been debating energy legislation for some time. Contrary to the hopes of pro-consumer advocates, the legislation has taken a turn for the worse. The same energy industry players, who gouged ratepayers and gutted the pension funds of thousands of Americans, have dominated the energy debate in Congress. Long-standing consumer protections in federal law would be repealed if the energy industry is successful. This result would only serve to threaten ratepayers and investors even more. Moreover, the legislation envisions federalizing important aspects of electric utility regulation which have traditionally been the domain of state jurisdiction. Taken together, these so-called “reforms” would make it increasingly difficult for the public to participate in decisions vital to property owner and ratepayer interests. In addition, elimination of consumer protections and states rights in the area of utility regulation would make it equally difficult for CAC to adequately represent you on regulatory matters. In short, the changes in federal law proposed in the electricity provisions of the federal energy legislation are not only designed to enhance the price-gouging potential for irresponsible energy companies, they are anti-democratic as well. Fortunately, environmental, consumer and even business groups are now opposing these provisions. But time is of the essence. Please write or call your Congressperson and U.S. Senators Richard Lugar and Evan Bayh today. Ask them to work with their colleagues to oppose and remove the electricity provisions of the proposed federal energy bill, S. 517. Let them know that we need more government oversight of energy companies now more than ever. The events of the past year demonstrate that repealing critical consumer protection provisions in federal law at this time would be highly irresponsible and detrimental to ratepayers and to the economy as a whole.
A Letter from Our Executive Director
Citizens Action Coalition of Indiana September 25, 2002 To the Indiana Congressional Delegation: I am writing to express the opposition of the Citizens Action Coalition of Indiana to including an electricity title in the energy bill now being considered by the House-Senate conference committee. The Citizens Action Coalition is Indiana’s largest consumer advocacy organization, with over 300,000 members and contributors statewide. It has steadfastly supported federal electricity legislation that would protect consumers, decrease dependence on fossil and nuclear power, and increase reliance on renewable resources and energy efficiency. The nation is learning more and more about the market power and gaming which electricity traders used to manipulate the California market – costing consumers billions of dollars. Top executives of many of these same companies manipulated their own books for personal financial benefit – costing their employees both jobs and retirement savings and destroying the investments of their shareholders. It would be utterly irresponsible to allow such companies and executives to operate with even less oversight and fewer restraints in the future than they have in the recent past. Yet that is exactly what is currently being considered in the conference committee on H.R. 4, the Securing America’s Future Energy Act. The electricity provisions in the Senate-passed energy bill would be tremendously harmful to consumers, workers, and investors. The alternative adopted last week by the House conferees and now being offered to the Senate conferees would be even worse. Language on both sides now would repeal the Public Utility Holding Company Act (PUHCA), which has benefited consumers, workers and investors for over six decades by protecting them from mega-mergers that raise prices and eliminate jobs, and outlawing insider dealing that cheats the vast majority of investors. Repealing PUHCA would mean less competition and higher prices for consumers and industries, fewer jobs for workers, and more risks for investors as utilities consolidate and finance in ways that were prohibited before. It would also mean weaker oversight of electric companies by the federal government, thereby overwhelming state regulation which will have much greater difficulty overseeing holding companies with service territory and power plants scattered across the country. Indeed, the House proposal would eliminate the Federal Energy Regulatory Commission’s merger review authority entirely. That means Enron-like disasters and meltdowns like those in the western electricity market in 2000 and 2001 would become more likely. All of this has come to into sharp public focus since the Senate passed its version of the energy bill. The scope and degree of misconduct in the electric industry already disclosed has reached historic proportions. The public is outraged by what it has learned so far. There will certainly be more revelations as investigations into the rampant misconduct continue. And there will be more indictments to fuel public anger and more details of the wrongdoing to inform corrective public policy. The current rush to pass energy legislation that removes a key protection, PUHCA, while adding other provisions leading to federalizing electric utility regulation, goes exactly in the wrong direction. One thing is now clear: Weakening the rules that govern the electricity industry and cutting back on regulatory oversight and enforcement is not the appropriate response by Congress to this still developing scandal and resulting public outrage. As bad as the situation has become, without PUHCA restrictions – limited though they are – and FERC regulatory authority – belatedly exercised though it was – the debacle would have been much worse. The lessons from deregulation in telecommunications and natural gas, where federal regulatory systems similar to that now proposed for electricity currently prevail, is both instructive and distressing. Just this week, Qwest has announced another $1 billion in writeoffs due to improper accounting of “capacity swaps” and other financial maneuvers, while FERC’s chief administrative law judge has found El Paso Pipeline guilty of manipulating the natural gas supply to the southern California market, the match that lit the California electricity market explosion. Please let the conferees know on behalf of your constituents that now is not the time to weaken time-tested protections for consumers, workers and investors, or to eliminate necessary federal oversight for an industry that provides electric service essential to our people and our nation. Even more than in gas and telecommunications, interruptions in supply or skyrocketing rates for electric power can literally be a matter of life and death. Instead, Congress should be trying to find out just how and why the industry has acted so badly, and plug the gaps and loopholes that have been so shamelessly exploited. Congress should abandon the electricity title until the consuming, working and investing public can be assured of receiving more protection, not less against industry abuses. Sincerely,
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