Wednesday, July 30, 2003
Senate Energy Bill Would Harm Electricity Consumers
Failure To Pass Crucial Amendments Would Make Enron-Style Problems More Likely
Washington, DC Adam Goldberg, a policy analyst in the Washington office of Consumers Union, the non-profit publisher of Consumer Reports, said the following today about the electricity provisions in the energy bill (S. 14) now under consideration in the Senate:
The Senates electricity provisions make Enron-style meltdowns more
likely. Protections that have been in the law for over six decades would
be wiped off the books, with no effective replacements being offered. It
makes no sense to repeal laws that help protect consumers from being ripped
off when reports on the California energy crisis are painting a startling
picture of widespread market manipulation and unethical practices that have
cost consumers billions of dollars. You would think that after the Enron
mess, Congress should be strengthening consumer protections, not wiping them
The Public Utility Holding Company Act (PUHCA) has worked to prevent consumer and investor abuses by putting a stop to complicated corporate structures, affiliate transactions and consolidations that prevent effective regulation.
These measures 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 without PUHCA, and would not have
been nearly as tragic had this law been fully enforced.
If there is another electricity crisis like the one California faced, consumers
would end up paying a heavy price, and the federal government wouldnt
have the tools it needs to stop it. A bad situation would become much, much
worse. Unfortunately, todays Senate votes make another crisis more
likely, not less
The Senate had an opportunity to protect consumers, but failed to do so.
These are bad provisions in a bad bill, and for consumers sake, we
can only hope that they dont make it into law.
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.