Thursday, September 12, 2013




          For the 47th time in the last 10 years, an out-of-state electricity generating company has just agreed to repay big bucks to Californians for overcharges during the power crunch of the early 2000s.

          The question now is whether consumers will see much of the $750 million British Columbia Hydro and its Powerex division agreed to cough up.

          Despite newspaper headlines and television news teasers saying customers of Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric will get significant credits on their electric bills, that is not certain.

          “Our press release was deliberately vague about who actually will get the money because that will still have to be decided by the state Public Utilities Commission,” said a spokesman for Attorney General Kamala Harris, who negotiated the latest settlement.

          A look at what happened with past settlements (in all, 60 out-of-state companies bilked Californians out of more than $10 billion during the crisis of 2000-2001) shows why there’s plenty of reason for uncertainty about who will get the $273 million in cash BC Hydro will pay and the $477 million in credits it will issue.

          During the first five years of restitutions, more than $6 billion was recovered from Texas- and Oklahoma-based companies like Enron, Reliant Energy, Mirant Energy and the Williams Cos., but almost none of that money found its way to this state’s 12 million-plus electric customers, business and residential.

          Rather, those settlements took the form of renegotiated long-term power contracts or cancellation of past debts owed to the generators by Edison, PG&E and SDG&E. When then-Attorney General Bill Lockyer and the Federal Energy Regulatory Commission boasted that the settlements might lower future power rates, it came as cold comfort to customers still paying the bumped-up prices. Rates here are still higher than in all but seven other states, so it’s hard for consumers to see any benefit from the early big-money repayments.

          Smaller settlements followed, with pretty much the same pattern – most of the money has been used for almost anything but repaying the victimized people and businesses.

          A classic example was last year’s $120 million settlement from NRG Energy Inc. for the part it and the bankrupt former generator Dynegy played in the power crunch. To be paid over four years, that agreement sees NRG (which seven years ago bought Dynegy’s interest in two California power plants) spending 80 percent of the money on a network of electric-car charging stations along major highways and in the state’s biggest cities.

          Consumers, then, are getting pennies back on the many dollars Dynegy stole from them, while NRG ends up owning a chain of charging stations for the convenience of people who can afford to buy electric cars – most costing far more than the average vehicle. It's a classic way of taking money paid mostly by average folks and using it to convenience a corporation and the wealthy, all clothed in pious environmental rhetoric.

          No one has ever explained why that money shouldn’t have gone straight back to consumers.

          Then, when BP Energy paid an $18 million settlement, money from the former British Petroleum went into “an account to be designated by the California Department of Water Resources.” None of that cash found its way back to the pockets of anyone you know.

          Now comes the BC Hydro settlement, the largest in several years. Harris bragged in her press release that it “brings long-awaited compensation to California ratepayers for Powerex’s conduct.”

          But it remains to be seen whether customers will see even a few pennies of compensation. Considering the sorry record of the utilities commission in passing out money from previous settlements, it would not be wise to bet on consumers getting much, if any, of this new cash and credit, when simple justice demands they should get it all.

    Email Thomas Elias at His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit

No comments:

Post a Comment