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CU: House Energy Bill is Anti-Consumer

Wednesday, April
9, 2003

Consumers Union
(202) 462-6262


WASHINGTON, DC – The House of Representatives begins consideration of a controversial energy bill on Thursday, April 10. Adam Goldberg, a policy analyst with Consumers Union, the non-profit publisher of Consumer Reports, made the following statement regarding H.R. 6, the Energy Policy Act of 2003.
“The energy bill now being considered by the House of Representatives is a failure on many fronts. The bill fails to adequately address America’s over-dependence on foreign oil. There is no meaningful increase in automobile fuel efficiency standards. Instead, we’re told that the solution to our problems is ‘drill, drill, drill.’ But there is no reason to permit oil drilling in an Alaskan wilderness area. It would do nothing to further our nation’s energy independence goals – the supply is too limited, the environment too fragile, and the cost too high.
“The bill fails to adequately support renewable energy. Despite the fact that recent developments have made renewable energy sources more economically viable, this bill doesn’t take advantage of important benefits like reduced energy costs, job creation, energy independence and environmental protection.
“But perhaps the biggest travesty is the fact that the energy bill would repeal the Public Utility Holding Company Act (PUHCA) – and with it nearly seven decades worth of effective, proven consumer protections. Since its passage in 1935, PUHCA has worked to prevent consumer and investor abuses by preventing complicated corporate structures, affiliate transactions and consolidations that prevent effective regulation. These protections are as important as ever, particularly in the aftermath of the Enron debacle, the mergers that have swept through the electric industry, and the collapse of meaningful competition in California and other states. This scandal would have been much worse but for the provisions of PUHCA, and would not have been nearly as tragic had PUHCA been fully enforced.
“Moreover, the bill tramples on states rights by creating new federal transmission siting authority. It would also expand Federal Energy Regulatory Commission (FERC) control over the actual transmission of electricity, further eroding the role that states have traditionally played in setting rates. And, the bill mandates “incentive-based transmission rates” that will increase costs for consumers by unjustly rewarding companies for transmission construction that they are already being well compensated for.
“Now is not the time to weaken federal oversight and provide a boon to companies like Enron that so abused the public’s trust. By adopting the electricity title in H.R. 6, the House would leave consumers, including small businesses, more vulnerable to market manipulations that will inevitably lead to higher prices and more blackouts. That’s quite a gift to companies that have cheated American consumers, and a thumb in the eye to those who were ripped off.”



Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers.