Calif. consumers forced to pay for energy crisis
May 25, 2001 | Page 4
Dear Socialist Worker,
When the power crisis first hit California in January, Gov. Gray Davis was talking tough. But actions speak louder than words.
Davis received more than half a million dollars in campaign contributions from power companies--and they've been getting their money's worth. He recently signed long-term contracts with power generators that will lock in rates for the next 10 years. But these rates are twice what was being paid last year--and will cost the state $40 billion.
Davis has kept the exact details of the contracts secret, and last week we found out why. They contain a clause that allows generators to raise their rates if the price of natural gas goes up.
The problem is that these same power generators have been manipulating the price of natural gas by withholding supplies. It was also revealed this week that 25 percent of generation capacity was kept offline by power generators during the most recent round of blackouts.
Meanwhile, the Public Utilities Commission pushed through another 40 percent rate hike. And despite the fact that industrial users consume 65 percent of the power in California, Loretta Lynch--the head of the Public Utilities Commission--admitted that it's residential consumers who will be made to pay.
"[Lynch] was aware that residential users are being asked to carry a high proportion of the load, but said efforts to force industrial users to pay higher rates ran into political opposition," according to the San Francisco Chronicle.
We need to fight to take the profit out of a public service like power generation.
Brian Belknap, San Francisco