SO FAR, RELIANT ENERGY has paid $525 million to settle government claims that it gouged electricity consumers during the Great Grayout of 2000–2001. The company also faces federal criminal charges for gaming the market, even though federal regulators encouraged them to do precisely that. To date, companies like Enron and El Paso Corp. have paid a total of $5.29 billion to the state of California for manipulating supplies to increase demand and price. The total gouge by the energy industry was more than $12 billion, but ratepayers will be lucky to see a fraction of that as PG&E, Edison International and Sempra Energy are receiving the pig's share of Attorney General Lockyer's puny settlements.
Out with the old gang, in with the old gang.
One of the loudest advocates for energy deregulation before the meltdown was Michael R. Peevey, who was president of Edison International until he left in 1993 to start the nation's largest energy provider, NewEnergy Ventures Inc. Peevey went on to run True Pricing Inc., a company marketing energy information software and hardware. He is now the president of the California Public Utilities Commission (CPUC), having survived a mini-scandal last fall after a fellow commissioner accused him of influence-peddling.
Peevey may or may not be corrupt, but he was sure wrong about deregulation. "Everybody's rates will go down," he said in 1999, even as Edison International was looking to double San Diego's rates. Now, having seized control of the state's regulatory apparatus with Gov. Schwarzenegger's blessing, Peevey is pushing for increased deregulation. He is also campaigning to compel utilities to hook customers up to Internet-controlled "smart meters" that will monitor demand in real time. While factories and office buildings might benefit from intelligent metering, sweltering homeowners could be fined for flipping on the AC on a hot afternoon.
Peevey's partner in making a bad situation worse (for residential consumers, not for energy companies) is Joe Desmond, who was recently appointed chairman of the California Energy Commission (CEC) by Schwarzenegger. Before Desmond went on the public payroll, he was CEO of Infotility Inc., based in Boulder, Colo. Infotility sells smart-meter technology, which eliminates the need for live meter readers. Since 2001, Infotility has participated in two smart-meter testing programs funded by the CEC. At a CEC workshop in February, the plutocratic-sounding Desmond remarked that most people are not intelligent enough to understand their own utility bills. Presumably, the meters are smarter.
Peevey's CPUC and Desmond's CEC--in partnership with True Pricing and Infotility--are exploring ways to allow a demonstrably sticky-fingered industry to control supply and demand. But the utility companies are not terribly keen on fronting the $3 billion that the meters are projected to cost, even though the money can be recouped (and then some!) by raising electricity rates. CPUC commissioner Susan P. Kennedy believes that rushing ahead with smart-meter connections now, using current telecommunications technology, will waste an opportunity to connect smart meters to electrical power lines later, when the utilities inevitably start shooting broadband into house sockets. Whatever the technique of hookup, Peevey and Desmond intend to watch every electron you use, instantly reporting data to energy traders who will be free to manipulate the market in ways never dreamed possible by the relatively low-tech golems at Enron and Reliant.
Don't look to newly installed CPUC commissioner John Bohn to put the brakes on smart-meter mania. Bohn is a member of the Council on Foreign Relations in New York. He sits on the executive committee of the U.S. Chamber of Commerce. He owns GlobalNet Venture Partners, which invests in information technology startups. The firm's website boasts that its clients will have "an opportunity to extract significant value from a combination of key relationships in the government, private sector, international markets and information technology."
The smart-meter scheme caught the attention of Senator Nell Soto, D-Pomona. Soto is sponsoring a bill to require the CPUC to financially justify its proposed order that utilities spend billions of consumer dollars to force-feed spy bots to the public. Additionally, the Utility Reform Network is sponsoring a ballot initiative in the November election (should Arnie's insane PR stunt proceed) that will rein in the smart-meter scamola. The initiative will also roll back deregulation of what its authors term an "ill-conceived experiment that led to rolling blackouts, supply shortages and market manipulation, resulting in billions of dollars in excessive prices being borne by California ratepayers."
That should be a slam-dunk "yes" vote for anyone who has not been fatally hypnotized by the Sleazenator. Hmmm. Maybe we need smart chips installed inside our heads.
From the August 24-30, 2005 issue of the North Bay Bohemian.
© 2005 Metro Publishing Inc.