Sunday :: Oct 5, 2003

Is That Your Hand On My Wallet, Or Are You Just Glad To See Me, Arnie?

by pessimist

There has been a lot of speculation concerning the motives for the candidacy of Arnold Schwartznegger for the California Governorship. According to Greg Palast, there is more here than meets the eye.

Whether through serendipity, or because some female clerk was groped by Arnold and now wants a payback, Palast received 34 pages of internal Enron memos detailing a meeting Ken Lay had with a group of media honchos, investors, and corporate CEOs which included Arnold and junk-bond king Michael Milken, among others. Former Mayor Dick Riorden was also at this 17 May 2001 meeting, which may explain why Gray Davis went after him so savagely in the 2002 primary. Former gubernatorial candidate Bill Simon was also invited, but did not attend, according to a set of internal Enron emails released by The Foundation for Taxpayer and Consumer Rights (available as a .pdf file through their web site - click on the link in the article to download).

One of the topics allegedly discussed at this meeting (according to Palast) was a lawsuit filed by California Lieutenant Governor Cruz Bustamonte against Enron, among other electrical power "providers", with the aim of reclaiming excess energy charges of $9 billion dollars of Your Money. As the case looks good against Enron, et al, the deregulation cartel called in some political favors from the Bush (mis)Administration to try to block the recovery award. And as they are the Best Government Corporate Money Can Buy, the Bushishtas came up with a plan where the cartel would pay back about 2 cents on the dollar. This works out to less than $1.50 of Your Money per California citizen!. Total. About as valuable as the average citizen's Federal tax cut.

So why isn't this a done deal? According to Palast:

Problem:  the slap-on-the-wrist refunds won't sail if the Governor of California won't play along.  Solution:  Re-call the Governor.

New Problem:  the guy most likely to replace Davis is not Mr. Musclehead, but Cruz Bustamante,  even a bigger threat to the power companies than Davis.  Solution:  smear Cruz  because -- heaven forbid! -- he took donations from Injuns (instead of Ken Lay).

According to an article in the The San Diego Union-Tribune on Sep 20, 2003 (available here), in 2004 Californians will pay an average of about $91 of Your Money per megawatt hour for electrical power. As most residences are billed for KILOwatt hours (kwh), this changes the price to about $.091 cents/kwh. For reference, it would take a kilowatt to run your average computer for about 3 hours.

From Department of Water Resources figures, California uses about 49 million megawatts per year at a total cost of about $4.5 billion dollars. This works out to well over $1000 of Your Money per year for each citizen of the state, or over $80 of Your Money a month.

Back in 1997 , the last year of energy regulation in California, the average price for electricity was $29.20 of Your Money per megawatt hour. The typical residence paid $.0292/kwh. Thus, this is an increase of over 300% in price. At this 1997 price, the projected power usage for 49 million megawatts would be about $1.43 billion. This means that Californians will pay $3 billion of Your Money more next year than if regulation were still in force. This means that you will spend several hundred dollars more of Your Money for electricity, certainly more than the best Federal tax refund checks sent out this summer.

Recent spot prices of electricity in weeks have been between $35 and $50 of Your Money per megawatt hour ($.035 to $.05/kwh), according to San Diego Gas & Electric, a subsidiary of Sempra Energy. Most residential utility customers are billed at least $65 of Your Money per megawatt hour ($.065/kwh), however, to pay for crisis-related costs. This includes $873 million of Your Money paid next year for 2001 power purchase bond charges.

Here's where some more of Your Money goes: (SD Union-Trib)

The total $5.4 billion in crisis-related costs next year is "a shocking reminder of how devastating the crisis was and continues to be," said Douglas Heller of the Foundation for Taxpayer and Consumer Rights in Santa Monica.

Heller said he factored in the expected costs of the long-term power contracts when he authored a study in 2002 that estimated the total cost of deregulation to the state would be $71 billion. That total included $22 billion the consumer advocate said was paid to utilities during the attempt to make the transition to a deregulated market.

That's a lot of Your Money!

Sempra is one of the companies with whom California has been unable to renegotiate their $6 billion energy contract, the largest such hung energy contract renegotiation deal. This fact lends some weight to those who seek to recall Gray Davis for failed leadership. And if an allegation of a donation of $100,000 from Ken Lay to Gray Davis is true, then Davis certainly has shown poor judgement to accept money from a company pushing to deregulate California energy markets.

[Before Davis supporters blast me, I am against the recall.]

In addition, both the Federal Energy Regulatory Commission (chaired by one of Ken Lay's recommended minions) and a state court have upheld the Sempra deal, but California is appealing the decisions.

Sempra has said it will agree to new terms if they are beneficial to both sides. A Sempra spokesman stated that the agreement with California is providing power at about $67 of Your Money per megawatt hour ($.067/kwh), measuring by current fuel prices. At the time the contracts were signed in 2001, state officials predicted they would cost residents an average of $70 of Your Money per megawatt hour ($.07/kwh). DWR spokesman Oscar Hidalgo said the state's costs under the long-term power contracts, some of which run until 2012, are expected to decline in coming years, but warned that expectation could be upset if the price of natural gas were to rise. Recent reports indicate that prices will rise due to shortages and increased demand. Natural gas is burned to produce electricity and many of the contracts require the state to pay for that fuel.

Remember what George W. Bush likes to tell people when he talks about tax cuts - "It's Your Money". So why are we supposed to allow people like Ken Lay to get away with keeping "Your Money" through higher charges when we demand that governments return "Your Money" to us through lower taxes?

So where does Arnold (remember him?) fit into this nefarious scheme? According to Palast:

Once Arnold is Governor, he blesses the sweetheart settlements with the power companies.  When that happens, Bustamante's court cases are probably lost.  There aren't many judges who will let a case go to trial to protect a state if that a governor has already allowed the matter to be "settled" by a regulatory agency.

So think about this.  The state of California is in the hole by $8 billion for the coming year. That's chump change next to the $8 TRILLION in deficits and surplus losses planned and incurred by George Bush.  Nevertheless, the $8 billion deficit is the hanging rope California's right wing is using to lynch Governor Davis.

Yet only Davis and Bustamante are taking direct [action] to get back the $9 billion that was vacuumed out of the state by Enron, Reliant, Dynegy, Williams Company and the other Texas bandits who squeezed the state by the bulbs.

But if Arnold is selected, it's 'hasta la vista' to the $9 billion.  When the electricity emperors whistle, Arnold comes -- to the Peninsula Hotel or the Governor's mansion.  The he-man turns pussycat and curls up in their lap.

I asked Mr. Muscle's PR people to comment on the new Enron memos -- and his strange silence on Bustamante's suit or Davis' petition.  But Arnold was too busy shaving off his Hitlerian mustache to respond.

$9 BILLION of Your Money total - almost $300 of Your Money per citizen of California. Can you AFFORD to let Enron, et al, select your governor for you?

pessimist :: 4:34 PM :: Comments (1) :: Digg It!