Re-Regulate Utilities

The dirty secret of the Aug. 14-15 blackout is that it demonstrates the failure of deregulation of our nation's electrical utilities.

In the 1990s public utilities persuaded many states to free them from regulations that had ensured reliable power at what the governments determined to be a fair rate of return. If deregulated, the industry promised, the wonders of the free market would result in cheaper electricity.

In practice, of course, the unregulated generating companies merged, limiting competition and laying off workers. Instead of investing in maintenance and repair of their plants and transmission lines, the corporations took advantage of their ability to manipulate prices to maximize profits. (See the California utility debacle of 2000-01, which cost Californians tens of billions of dollars.) With the ability to buy and sell electricity over long distances, the power grid, which was designed to supply local and regional needs, became overloaded but nobody was responsible for upgrading it.

Now industry officials have the gall to insist that the reason the lights went out over the northeastern US and parts of Canada was that transmission lines are still regulated.

Utilities want Congress to repeal the Public Utilities Holding Company Act, a New Deal law that prohibits companies from owning utilities in scattered parts of the country. Industry says deregulation would allow new capital to flow into utilities and the grid, but consumer advocates say it would concentrate the industry in a few powerful hands and enable a replay of Enron's shenanigans and the cartel-manipulated California energy crisis.

Lisa Gue, policy analyst of Public Citizen's Critical Mass Energy and Environmental Program, said the Senate's decision to pass the energy bill was a step backwards because it toes the line on key elements of the Bush administration's energy plan, including billions of taxpayer dollars in handouts to nuclear, coal and oil companies and deregulation of public utilities.

"Although deregulation is just one ingredient of the Republican-led energy plan, it is central to an ideology that promotes corporate profits over consumer protection, leaving millions of Americans with the likelihood of higher energy bills and even less corporate accountability," she said.

The energy bill also reauthorizes the Price-Anderson Act, which caps the liability of nuclear operators in the event of an accident or attack, thereby making taxpayers responsible for nuclear catastrophes.

The bill does nothing to increase the fuel economy of vehicles on the nation's highways. Instead it contains provisions that invite the industry to sue to delay increases in the fuel economy standard.

Congress should scrap the industry-drafted energy bill and follow the lead of Dennis Kucinich, who saved the Cleveland municipal power utility in the 1970s. Now he wants to force FirstEnergy of Ohio to do its job or lose its license to operate. If utilities can't provide a reliable grid, the federal government should take over -- and if necessary, states or municipalities should take over the incompetent or gouging utilities.

We Told You So

George W. Bush framed a guilty man last spring when he accused Saddam Hussein of threatening the US with weapons of mass destruction. Hussein was an evil dictator, we all agree, but he apparently was not involved in the 9/11 terrorist attacks. It made little sense to invade Iraq and alienate the Islamic world as well as key European allies when UN weapons inspectors ranging around Iraq were turning up little evidence of prohibited weapons programs.

Now postwar Iraq has become what many US intelligence officials had feared: a magnet for terrorist recruits. On Aug. 21, the US commander of allied forces in Iraq, Gen. John Abizaid, confirmed that terrorism has become the top security threat in Iraq, as foreign terrorists stream over the border to join forces with local guerrillas. Thousands are believed to have ventured over from Saudi Arabia, home of 15 of the 9/11 terrorists.

After the truck bombing of the UN mission in Baghdad, Secretary of State Colin Powell asked the UN to commit troops and money to assist the 139,000 US troops and 21,700 allied troops occupying Iraq, but only if the US gets to keep calling the shots. As expected, Security Council members France, Germany and Russia demurred. Without greater authority for the UN, the US and Britain will have to keep up the military and economic burden. You can hardly blame France, Germany and Russia after the vilification they took from the Bush administration last spring when they tried to stop the ill-considered invasion.

So we're spending a billion dollars a week on Iraq but the Army is having problems supplying the occupying force. Bradley fighting vehicles have sustained so much wear and tear in Iraq that the Army is months' short of replacements for the steel tracks on which they travel. Our troops report that they are short of water and some have to use confiscated AK-47 rifles because they don't have enough Army-issue M4s to go around -- but the troops prefer the Russian-style Kalashnikovs anyway, AP reports. And we've reopened Saddam's main political prison and we're hiring back members of his secret police.

Meanwhile, Osama bin Laden, alias "Osama bin Forgotten," remains at large, presumably on the western frontier of Pakistan. The British Guardian suggests that the Pakistani president, Gen. Pervez Musharraf, struck a deal with the US not to seize bin Laden after the Afghan war for fear of inciting trouble in his own country. And the Taliban is getting bolder in Afghanistan as western forces bunker down in Kabul.

With US troops taking casualties on a daily basis, we agree with Dennis Kucinich, who said Aug. 25, "Negotiations for an exit must begin now. The UN must take over management, accounting and distribution to the Iraqi people of Iraq's oil profits. There must be no privatization of the Iraqi oil industry. The UN must handle the awarding of all contracts for the rebuilding of Iraq so that there can be no more sweetheart contracts for companies like Halliburton. Additionally, a transition from UN control to self-determined governing structure by and for the Iraqi people must be planned.

"It was wrong to go into Iraq. It is wrong to stay in Iraq. Let's support our troops by bringing them home."

California Follies

Our 9/1/03 editorial suggested that Gray Davis resolve the California recall by quitting. It was our belief, relying on published reports, that his resignation would stop the recall and allow Lt. Gov. Cruz Bustamante to serve out the unexpired term as governor. However, according to Rick Hasen of Loyola Law School in Los Angeles, California Elections Code section 11302 states, "If a vacancy occurs in an office after a recall petition is filed against the vacating officer, the recall election shall nevertheless proceed." If voters recall Davis, Bustamante would become governor only until the winner of the recall election was certified.

Bustamante could still become governor, as a Los Angeles Times poll published Aug. 24 reported him leading with 35% support, l3 points ahead of movie star Arnold Schwarzenegger. TPP columnist Arianna Huffington scored 3% and Green candidate Peter Camejo drew 1%, the same as Hustler magazine publisher Larry Flynt. But recall is not certain, as 50% of likely voters favored recalling Davis but 45% of likely voters were opposed to the recall. So turnout will be the key.

We still think California voters should vote not to recall Davis, who is not responsible for the poor economy or the state's budget shortfall. But they should vote for Bustamante in case the Republican-engineered recall is approved.

Honest Republican Stuns GOP

A tip of the hat to Alabama Gov. Bob Riley, who boasted as a congressman that he never voted for a tax increase and was elected governor on a promise not to raise taxes, but he has seen the light and he proposes to raise state taxes by a record $1.2 billion with a revamp of the state's tax system.

Normally we're not fond of politicians who break campaign problems but at least Riley flipped for a good reason: He seized on a $675 million budget deficit as an opportunity to right historic wrongs. He says the state should act to improve schools funded at the nation's lowest level per child and to lift the tax burden from poor people, who pay income taxes starting at $4,600 a year for a family of four while out-of-state timber companies pay $1.25 an acre in property taxes. The changes would move Alabama from 50th to 44th in total state and local taxes per capita, he says.

"I'm tired of Alabama being first in things that are bad and last in things that are good," Riley was quoted by the Washington Post. Alabama's tax code is written into its constitution, so Riley's proposal, which passed the legislature in June, will go before the voters Sept. 9. The resulting campaign has become a battle literally for Alabama's soul. The born-again Baptist governor is telling voters that their tax system, which imposes an effective rate of 3% on the wealthiest Alabamians and 12% on the poorest, is "immoral" and needs repair. "When I read the New Testament, there are three things we're asked to do: That's love God, love each other and take care of the least among us," Riley told the Post. That's more like the New Testament we read than the one George W. Bush seems to refer to. -- JMC

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