April 28, 2004
Lawmakers Should Not Resurrect Energy Bill
Statement of Public Citizen President Joan Claybrook
In what is yet another attempt by Republicans to force a bad energy bill down the country’s throat,
U.S. Sen. Pete Domenici (R-N.M.) has dredged up the bill – minus its tax package – and offered it as an amendment to the Internet tax bill. The third time is a charm, is what Domenici must be thinking. But for the sake of U.S. consumers, it should be three strikes and out – for good.
On Tuesday, most Senate insiders were declaring that there would be no movement on the energy bill until fall, but much can change in a day. Aside from a political process that warrants much criticism due to its questionable ethics and closed-door negotiations, the energy bill’s contents have great potential to severely damage consumers’ pocketbooks and the fragile economy.
Even without the $10.5 billion giveaways to the oil, gas, coal and nuclear industries – now attached to the corporate tax bill – and without the liability waiver for MTBE producers, the bill is still a bad deal for consumers. Of most concern is the proposed repeal of the Public Utility Holding Company Act (PUHCA), which industry insiders agree will result in massive consolidation of utility ownership, rather than the promotion of competition, as repeal advocates claim. Enacted in 1935, PUHCA has for nearly 70 years limited the investment of utility profits in unrelated business ventures, prohibiting expansion-minded corporations from using captured ratepayers to fund risky investment schemes that do nothing to improve service reliability or keep electricity rates low.
PUHCA also has prevented the creation of an oil, electric and natural gas cartel, since PUHCA prevents oil companies from owning electric and natural gas public utilities. Repealing PUHCA would therefore open up at least $1 trillion dollars worth of utility assets for purchase by any company, including oil companies. This includes $600 billion in investor-owned electric utility assets, $300 billion in municipal-owned electric assets and $100 billion in natural gas distribution assets. Repealing PUHCA would eliminate any effective method of limiting the size of such holding companies. It is therefore the largest dollar figure at stake in the bill, although the public has remained largely unaware of this.
If PUHCA is repealed, consumers will lose the ability to demand accountability from conglomerates that will acquire our essential public utilities and expand utility revenues without federal oversight. No responsible lawmaker should support this bill.