Today's (7/21/99) Wall Street Journal reports on how the U. S.
government is muscling Indonesia to protect the profits of U. S. power
companies such as Mission Energy, a subsidiary of Edison International,
parent of Southern California Edison.
Which way do you root on this one? If the strong-arm job is
successful, you will get out of paying your share of the $805 million in
loans and political risk guarantees for Edison given by OPIC and the
Export-Import Bank. To say nothing of being spared your share of $400
million in political risk insurance for CalEnergy.
On the other hand, if the strong-arm job fails, the coal-fired plant
will be kept off-line until the deal is re-worked. If Edison doesn't
get to run the plant for a long enough time we cut global warming.
Beyond that, you can feel better about the economic justice of the
thing.
The deal between Mission, as reported in today's Journal, is for an
initial bus-bar price of 8.6 cents per kWh!!! This is at the power
plant, not the customer's home, where the price would be higher.
Isn't there any shame at Edison's headquarters in Rosemead,
California? There is an average price of 6.3 cents over thirty years of
this contract. This is for the output of a coal plant in a country
where people make very little. These were sweetheart deals at the time
of signing, but of course the Indonesian currency has since dived and
there is no way these prices can be paid without a crushing burden on
the Indonesian people.
Are we going eventually to send in the US military to make people
pay their electric bills? Or will it be sufficient to give the
Indonesian military enough money to keep the riots down and keep
Edison's share price up?
An advisor to the current president of Indonesia says Indonesia
"simply doesn't have the money" to cover the contracts and fears social
unrest should tariffs be quickly increased.
Global Exchange and others have turned the spotlight on Nike and
other manufacturers who pay workers very little in so-called Third World
countries. And those campaigns have had some effect -- possibly
improving wages and working conditions. Perhaps the energy advocate
community should point out to Congress the shameless exploitation by US
energy companies, backed by the muscle of the U. S. government, of
people in Indonesia.
Read the story, and the remarkable piece of journalism about these
contracts some months ago in the Wall St. Journal. Sorry I don't have
the date of that story at hand. If one of you can remind me of that
date I would appreciate it.
Gene Coyle
