PG&E Ripoff: Return of the Robber Barons
According to Webster’s unabridged dictionary, a Robber Barons is:
- An American capitalist of the latter part of the 19th century who became wealthy through exploitation (as of natural resources, governmental influence, or low wage scales)
- A business owner or executive who acquires wealth through ethically questionable tactics.
In 1996, in a unanimous bipartisan vote, the California politicians, amply funded by the energy cartels, “deregulated” the power industry. Immediately after deregulation was passed, the energy cartels formed “parent corporations,” which acquired most of the assets of the former companies. For example PG&E Company became part of PG&E Corporation and the President and Chief Operating Officer of PG&E Company became the President and Chief Operating Officer of PG&E Corporation—with tens of billions in revenues.
PG&E Corporation markets energy services and products throughout North America through its National Energy Group and owns Pacific Venture Capital, LLC. This restructuring freed most of the PG&E Company assets from regulation.
Thus freed, the energy cartels have reverted to their natural “Robber Baron” instincts. And so has Governor Gray Davis and the state legislature . The governor and the legislature have worked out a scheme to give these robber barons billions in tax dollars for a bailout, while at the same time imposing a 40percent rate hike on consumers!
Those who are gouged the most, and who can afford it the least, the working people of California, are literally being extorted by the energy monopolies with the active collusion of the state government.
After PG&E blackmailed and tortured the public with intermittent blackouts, the California Public Utilities Commission (PUC) approved a 40 percent increase in monthly utility bills to feed the insatiable drive for profits by the energy cartels. The decision by the PUC was against the recommendations of the PUC Administrative Law Judge Walwyn. In his 75 -page decision, he properly noted that: “Since April 1998, ratepayers have paid billions of dollars in excess of market costs to support recovery of utility transition costs.” These rate increases did not satisfy the wants of the energy cartels.
Since deregulation, over $40 billion dollars in profits and other assets have been transferred to PG&E Corporation.
Yet, on April 6, the PG&E Company filed for bankruptcy! Claiming that it cannot pay its debts to its parent corporation, totaling $9 billion dollars, this is nothing more than another power play by the corporation for further bailouts and rate increases.
Everyone in California knows there is no real power shortage. The real reason for the rolling blackouts is that the energy companies are refusing to send power unless they can charge the maximum price the market will bear.
Thanks to the state government’s open collaboration with the robber barons, the end result for working people will be fewer public funds for schools, hospitals and other needed programs because the money will have gone to the great energy give-away.
It’s time to stop the robber barons.
We should organize and demand:
- No Bailouts, No Rate Increases! Reduce the rates to pre-crisis levels. The companies that created this crisis must not profit from it!
- End regressive power rates — whereby the rich and the corporations pay less for power! Since energy has become essential for everyday living, everyone has a right to power! Rates should be progressive and be based on income with no charge for households with less than $50,000 per year income! Make the Robber Barons pay back what they stole. Tax their profits 100%! Power for use—not for Profit!
- Open the books of all companies that supply or sell energy to California. The people of California have a right to know how they are being ripped off!
- State Take-Over of Electricity. The State of California must utilize eminent domain powers to seize ALL privately-owned energy generation plants and distribution grids and run them as a Public Power Authority to insure a steady power supply. (This means seizing the assets of the power companies and corporations!) The $40 billion that the energy companies have ALREADY stolen is more than enough compensation.
- Democratic Control of the State Power Authority. The new State Power Authority must be run by representatives democratically elected by power workers and the public. The capitalist politicians have betrayed us in this crisis. The only solution is direct democratic control; that is, control by the workers who produce the power and the entire working class are the ones who should be running the power system. We urge trade unions and community organizations to adopt resolutions embodying the basic points advocated here.
In California, we will work together with anyone fighting this blackmail to arrive at a common set of demands that unites all working people and serves notice to the energymonopolies and the government that we refused to be ripped-off.