Friday, October 14, 2005

Burn, Baby, Burn!

There’s an interesting commercial running on Chicago television these days. An announcer says that a few years ago, politicians in California seized control of electricity production and held down the price of energy — while, the “true cost” of electricity kept rising. The abbreviation “ICC” and the name “Com Ed” appear on the screen, apparently as parts of newspaper articles. According to the commercial, power shortages and skyrocketing prices hit California because the politicians ignored independent experts. The announcer warns his listeners that Chicago doesn’t need a California-style crisis.

Perhaps not surprisingly, the commercial is completely misleading. In reality, the problem was Com Ed’s fuel supplier, Enron. Enron energy traders engineered the crisis to drive up prices and make money. Office telephone conversations recorded by Enron and finally disclosed in 2004 made it abundantly clear exactly what happened. (An audio file of two C.B.S. broadcasts is available upon request.) To create blackouts and brownouts, Enron figures periodically ordered generators to be shut down. They talked about stealing millions of dollars per day; and they laughed about poor, old “Grandma Millie”:

…now she wants her f**king money back for all the power you charged right up — jammed right up her a** for f**king $250 a megawatt hour.

And when wildfires threatened power transmission lines, Enroners were cheering for the fires. “Burn, baby, burn!” one trader said. “That’s a beautiful thing.”

Enron and the Justice Department tried to prevent release of the Enron tapes. Lawyers for Enron claimed the recordings merely proved that traders sometimes talked like Barnacle Bill the Sailor. But the recordings leave no room for doubt. An extensive, corporate criminal conspiracy defrauded the public of hundreds of millions — perhaps billions — of dollars. And not just in California, but along the entire west coast. The perpetrators knew precisely what they were doing. When the racket was exposed, they talked about cleaning up their act and trying to avoid jail time.

A number of Enron figures faced charges, including C.E.O. Kenneth Lay, a major contributor to George Bush, Junior’s political campaigns. In 2000, there was talk of Lay being appointed Secretary of Energy in a Bush administration; but the collapse of Enron buried Lay’s chances of a career in public service.

So, what is the commercial really about? The ad displays a website address:

Unfortunately the website is rather vague about Consumers Organized for Reliable Electricity (CORE). CORE is a group of businesses, organizations and individuals, otherwise undefined, who support a competitive marketplace and economic development. CORE will reach out to “key policymakers” to facilitate “a unified and effective impetus for progress.”

Supporting progress is admirable, but defining progress is problematic. Click on CORE’s link to taking action and you learn nothing. Instead, you find a form to fill out so you can become a CORE member, presumably to receive information later about the organization you just joined. You can download a CORE brochure with another membership application, but you still won’t find out about CORE’s objectives.

Deregulation was sold in California as a way to get government off the back of business — to unleash the power of the market to reduce costs and increase efficiency. Deregulation achieved exactly the opposite result.

Public utilities must be regulated because your Grandma Millie, on a fixed income, still needs electricity; and my Uncle Eugene needs heating oil for his home. Make no mistake. The champions of deregulation know what they’re doing. They’ve been spouting the language of deregulation for so long, however, that we sometimes forget why regulations were instituted in the first place. The reason is simple. There are thieves in the world. There are even thieves who wear suits and run big companies.