Already setting the stage for the "recession," aka Great Depression, so
sagely "predicted" by Republican President George W. Bush.
KEY FIGURE IN CALIFORNIA'S POWER CRISIS HAS BUSH'S EAR
by Phillip Matier & Andrew Ross
San Francisco Chronicle, 17 January 2001
One powerful name to keep an eye on during this energy
crisis is Kenneth Lay, chairman and CEO of Texas-based Enron
Corp., and a close buddy and contributor to President-elect
George W. Bush.
Enron has been one of the prime movers behind California's
energy deregulation and continues to be a significant player in
the state as an energy marketer.
And Lay was on hand last week when Gov. Gray Davis met with
government regulators and energy providers to try to work out a
solution to the state's energy crisis. Billions of dollars are at
stake -- and consumers could end up holding the bag.
All this comes amid speculation that Lay will serve as the
new president's key adviser on energy policy -- even being
described as a "shadow" energy secretary. In fact, Lay had been
widely mentioned as the possible energy chief until Bush's recent
nomination of Spencer Abraham.
"The governor knows (Lay) has Bush's ear, and we know where
he's coming from," says Davis' press secretary, Steve Maviglio.
"He's the head of a billion-dollar corporation that's owed a
significant amount of money (from the utilities) -- it's no
secret," Maviglio said.
And how about Lay's long political and financial ties to
Bush?
For starters, Enron -- which posted revenues of more than
$40 billion in 1999 -- was the single largest contributor to
Bush's presidential campaign, giving no less than $555,000,
according to published reports.
Lay even sent top executives a memo on his personal
stationery asking them to contribute $1,000 each to the Bush
campaign, says the New York Times.
And according to the Washington-based Center for Responsive
Politics, Lay -- along with Enron President Jeffrey Skilling --
each contributed $100,000 to Bush's forthcoming inaugural.
But the Lay-Bush connections run deeper than money.
Lay hired two of Bush's father's Cabinet members and family
confidants -- James Baker and Robert Mosbacher -- after they left
office.
And just last April, Lay played host to George W. and his
dad at the Houston Astros' first home game at the team's new
stadium . . . Enron Field.
Three weeks later, according to Tongue Magazine, Lay joined
George W. in Washington for a Republican fund-raiser that brought
in a staggering $21.3 million, easily the biggest one-night haul
for any political party in history.
What's more, the magazine reports, the Bush campaign
borrowed Enron's corporate jets eight times last year to fly
aides around the country, although the cost of the trips was
later reimbursed as required by law.
And what did Enron get out of the deal?
Well, Lay has repeatedly asserted in interviews that there
is no quid pro quo in his relationship with Bush.
"Ken Lay and Enron have consistently stood for open access
to energy ... markets," company spokesman Mark Palmer told us
yesterday. "What that means is for the marketplace to determine
how a scarce resource is allocated."
So it was no surprise when Lay showed up for last week's
energy negotiations, first in Washington and then later in Los
Angeles, to push the energy marketers' case.
"He's a skilled negotiator," said one source who followed
the debate. "He argued for the state to swallow the bitter pill
and pony up."
How much money are we talking about?
"Let's just say," says the source, "a calculator doesn't
have that many zeros."
STATE OF SHOCK: Last week, Davis was working on his State of
the State address -- this week he's got his lawyers working on a
possible state of emergency.
"It could range anywhere from an emergency appropriation to
buy power to moving to use eminent domain to take over power
plants," said spokesman Maviglio.
And that's why lawyers over at the attorney general's office
have been going over contingency plans.
It all comes down to this question: At what point is the
"public health and safety" at risk?
"Clearly," Maviglio said, "blackouts would set those wheels
in motion."
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On Enron (above), that particular corporation has almost a monopoly not
on oil (Bush's OTHER friends have that) but on natural gas, which just
"coincidentally" fuels most of the plants that provide "wholesale"
electricity -- which in turn is sold at a profit --since deregulation of the
industry was approved (by a Republican governor), around a FIVE HUNDRED
PERCENT profit-- to California's electrical "retailers," big
multi-billion-dollar utilities like Pacific Gas & Electric -- which in turn
provides the general public with that electricity --at the very highest rate,
despite daily and seasonal fluctuations in what electricity costs PG&E.
Someone is raking in OBSCENE profits at every level of the energy
utilities foodchain, and Enron --working backwards from effect to cause-- is
one of the few places where that buck STARTS.
Is it a coincidence, then, that only DAYS before the inauguration of
Republican President George W. Bush, Californians are suddenly faced with a
DAILY and even HOURLY threat of having their electricity shut off, which
could result in conditions approximating a major earthquake, CONTINUOUSLY?
UNLESS taxpayers consent to a minimum DOUBLING or TRIPLING of their utility
bills ...(Call it EXTORTION.)
For that matter, is it just a coincidence that the US economy is
suddenly now, a week before Inauguration Day, having the rug pulled out from
under it, first in those metropolitan areas such as California that voted
DEMOCRAT --AGAINST Bush-- in the presidential election? (Payback is a bitch,
isn't it?)
And just a coincidence that Silicon Valley CEOs in Al Gore's high-tech
entourage suddenly, embarrassingly, find themselves unable to run their
computers without that low-tech power supply, electricity, fueled by gas, a
cousin of OIL? "New Economy," meet the OLD economy, still in the hands of
the Elder Bush's powerful friends ..
_____________________
Chronology of Calif.'s Power Crisis
.c The Associated Press
A timeline of key events in California utility deregulation:
1996: Gov. Pete Wilson signs legislation to open California's electricity
market to competition.
1998: Utilities begin taking steps to divest themselves of power generation
plants. Rates they can charge consumers are capped until the utilities
complete that task, expected in 2002.
1999: San Diego Gas & Electric becomes first California utility to
deregulate, allowing it to lift the price cap. Within a year, customers'
bills triple as the utility passes on high wholesale power costs.
2000:
May 22: The California Independent System Operator, manager of the state
power grid, declares the first of 36 Stage Two alerts, when power reserves
drop below 5 percent.
June 15: Rolling blackouts in San Francisco affect thousands. The blackouts
are caused by slim power supplies due to several Northern California power
plants shut down for maintenance.
Aug. 2: Gov. Gray Davis calls for investigation into possible price
manipulation in wholesale electricity market.
Sept. 7: State regulators approve plan for San Diego customers that caps
their rates for three years.
Dec. 7: ISO declares first Stage 3 emergency as power reserves fall below 1.5
percent. Conservation efforts avert rolling blackouts.
Dec 15: The Federal Energy Regulatory Commission approves a flexible rate cap
plan, but allows power suppliers to charge utilities more if they can prove a
higher price is warranted.
Dec. 26: Southern California Edison sues FERC, alleging the agency failed to
ensure that wholesale electricity is sold at reasonable rates.
2001:
Jan. 4: State regulators approve emergency rate hikes of 7 percent to 15
percent for customers of SoCal Edison and PG&E, who say they have lost
billions of dollars because they cannot pass on high wholesale costs to
customers. They later warn of bankruptcy and layoffs.
Jan. 11: ISO declares Stage 3 alert, but stops short of ordering blackouts.
Energy Secretary Bill Richardson extends emergency order requiring
out-of-state companies to sell power to California.
Jan. 16: ISO declares Stage 3 alert as several plants report a shortage of
natural gas needed to operate. Edison says it doesn't have the money to pay
$596 million it owes this week.
Jan. 17: ISO orders the first rolling blackouts of California's electricity
crisis. The outages affect several hundred thousand customers in northern and
central California. .
