June 23, 2005
If Senate Passes Flawed and Costly Energy Bill, It Will Fall Victim to Corporate Interests
Statement by Joan Claybrook, President, Public Citizen
Tonight’s likely passage by the Senate of an energy bill that repeals a vital consumer protection statute and hands billions of tax dollars over to the fossil fuel and nuclear industries, will prove to the American public that it cares more about rewarding business interests than protecting consumers, who will predictably suffer from higher energy bills and corporate abuse enabled by this legislation.
While the bill (S. 10) includes some significant provisions promoting energy efficiency and renewables, it ultimately sells out consumers by repealing the Public Utility Holding Company Act (PUHCA) and by heavily subsidizing old-style polluting industries. This bill will have passed without a single minute of debate on the electricity title, which includes PUHCA repeal. Yet, repeal of this law carries enormous repercussions. It advances the destructive path of deregulation, which has already proven to be a huge failure in many states, and encourages the same type of corporate wrongdoing that gave us Enron and the California energy crisis.
Public Citizen has repeatedly attempted to educate lawmakers on the consequences of repealing this essential consumer and investor protection, which limits utilities to investing profits in utility-related businesses and keeps the electric industry localized. PUCHA has protected ratepayers and utility investors for 70 years and kept electricity reliable, stable and affordable.
Repeal of PUHCA will mean a tidal wave of mergers in the utility sector that will result in higher costs for electricity consumers and leave state regulators with little or no ability to oversee huge interstate utilities. In addition, non-utilities, such as oil companies and banks, will be free to own and control electric and natural gas utilities. The interests of huge, multi-state and international conglomerates as utility owners will replace – for the first time since 1935 – the interests of consumers and investors.
The bill also fails to address the most effective means of decreasing our dependence on foreign oil and curbing vehicle emissions: mandatory improvements in fuel economy for the nation’s fleet of motor vehicles. Lawmakers should jettison this bill, because it is bad medicine for consumers, the environment and the economy.