Power Providers’ Profits Skyrocket
* Re “Power Crisis Generates Windfall for Suppliers,” Dec. 27:
Let me see if I can recap for those who haven’t really been paying attention. The large electrical producers donated huge sums of money to California legislators to get electricity deregulated. Electricity is deregulated and California sells its own power-generating units to private businesses that shut down plants, call it a shortage and quadruple the price.
Consumers in the state, except those in municipalities smart enough to pass on deregulation, are gouged. Legislators are silent. Power providers are recognizing windfall profits far exceeding estimates. And now the governor of our state says that we all have to be part of the solution to a problem created by greedy power providers and stupid legislators.
Gov. Gray Davis stated, “I’m not going to let these generators making eight and nine hundred percent [profits] . . . unduly drive California to its knees.” I suppose what that means is that the cost of cleaning up this mess will be passed on to consumers after the appropriate hearings are held, and these unscrupulous generators will then duly drive California to its knees.
We are, after all, a nation of laws. Republicans understand that. They deregulate (i.e., get rid of laws controlling industry, such as the savings and loan industry and now the power industry) and then use the remaining laws to force ordinary people to pay for the resulting mess. I can’t wait to see what we will be legally called upon to pay for next so that rich corporations can escape from pesky legal obligations.
Shouldn’t we be going to the source of the problem for high electric rates? Why isn’t anyone going after the private-generator carpetbaggers? They knew they could come in and nab a windfall; why didn’t anyone else?
I am a believer in free markets--less government intervention and lower taxes. But isn’t the present extremely high megawatt-hour cost (an unnecessary cost that is only lining the pockets of the out-of-state generators and nothing more) essentially a tax, one that is levied by corporations instead of a government? We had better start looking at it in this light. Unnecessary taxes, unnecessary profits; both immoral.
Your Dec. 21 editorial and Dec. 23 article suggest that the Los Angeles Department of Water and Power has avoided high electricity prices through brilliant management and foresight. Ignored are the slew of taxpayer subsidies that enable the DWP to obtain cheap federal electricity and to profit from its resale into the expensive California market. The DWP, for instance, receives electricity at 2 cents per kilowatt-hour from the federal Bonneville Power Administration and the Western Area Power Administration, and it sells that same federal power into the electricity-starved market for more than 20 cents per kilowatt-hour. It doesn’t take a management genius to profit from this scam.
The government-owned DWP also doesn’t pay taxes, and it even is allowed to issue bonds that are exempt from federal taxation, providing an enormous competitive advantage over private power companies that pay taxes and borrow on the open market. Perhaps The Times, rather than praising the DWP’s management, should question the fairness of taxpayer subsidies to one particular utility.
DICK MUNSON, Exec. Dir.
Re “L.A.'s Latest Luminary,” Dec. 23: DWP manager David Freeman gets (takes?) much of the credit. Isn’t this the same guy who, upon being appointed the DWP’s general manager, berated former members of the DWP management for never finding an energy source they didn’t want to buy or at least invest in? And now he wants to take credit for the favorable situation that the department is in!
Instead, he should publicly apologize for demeaning the previous management, which had the foresight to prepare for the unexpected.
WILLIAM R. BOEHMKE
Big Bear Lake
So, “Consumers (Are) Bitter as They Await Electricity Price Hikes,” eh? (Dec. 24). Awww, poor babies. If the American public had gotten off its collective duff in 1973 (remember the oil embargo?) and insisted on a comprehensive energy development program, we wouldn’t be in this fix. If American voters had demanded that the hidden cost subsidies for oil and nuclear fuels (cleanup costs, health-impact costs, etc. now paid for by the taxpayer and general public) be fully factored into the front-end cost of a gallon of heating oil, for example, alternate energies would have suddenly become much more cost-competitive and/or cheaper by comparison. And the marketplace could well have moved toward developing more renewable sources of energy, thereby avoiding the present crunch. And think of where we’d all now be if American voters had demanded full-scale government support for energy research and development.
Once this “crisis” passes, once again nothing will be done to plan for a more energy-sensible future. Absolutely nothing.
We recently passed a large playing field equipped with many bright lights for night play fully alight, with not a single soul in the park. At earlier times I questioned the economy of such action, but in the face of our power crisis it is unconscionable. There must be ways to see that the fields are fully lit when needed but to save the thousands of kilowatts when the fields are empty.
I applaud the availability of lighted recreational areas for the public’s use at night, but keeping these fields fully lighted at all times, even when unused, is absolutely wrong.