The Militant (logo) 
   Vol.65/No.10            March 12, 2001 
 
 
Marchers oppose rate hikes, 'bailout'
 
BY BERNIE SENTER  
SAN FRANCISCO--Chanting "No rate hikes, no bailout, public power now," 75 people marched in the rain to Pacific Gas & Electric Company's (PG&E) collection office on February 24.

Carolina Rodriguez, who joined the demonstration, has worked for 12 years as a janitor and is a member of Service Employees International Union Local 87. "I pay $300 a month for energy costs in my house. This is for only me and my daughter," she said.

"The president of Able Building Co.," Rodriguez explained, referring to her employer, "said that because of the energy crisis the company wants to save money by changing workers' schedules and laying people off. The president of our local union says because of the energy crisis workers need to make concessions and work with [California governor] Gray Davis. There is no democracy."

Rodriguez mentioned that she votes for the Democratic Party but disagrees with the bailout of PG&E, which the Democratic Party governor and the state administration are pushing. The demonstration was one of the few public protest actions in response to the government's moves to make working people pay for the bailouts of the state's two main utility companies, PG&E and Southern California Edison, which have gone nearly $13 billion in debt.

For the first time in more than a month, the utilities have not issued daily stage 2 or 3 energy alerts when reserves have fallen to dangerously low levels. But the crisis remains at the center of politics in the state. The steps by the government include relaxing air standards for the electric generation plants; long-term rate hikes, which will hit working people the hardest; the use of state funds to purchase electricity at sky-high prices from energy monopolies; and a massive $10 billion bond issue for long-term state purchases of electricity, arranged to insure the capitalist oil, gas, and electric companies keep raking in record profits.

In addition, Governor Davis announced February 23 that the state will purchase transmission lines owned by Southern California Edison for $2.76 billion, 2.3 times their book value. The state is also in negotiations with PG&E to purchase its power lines, but the insolvent company is holding out for more lucrative terms.

The bond offering will be the biggest state bond issue in U.S. history. The Los Angeles Times reported that more than half of the 26 financial firms hired by the state to oversee the bond offering have business ties to utility and energy companies. State Treasurer Phil Angelides said he does not believe the ties pose any actual conflicts of interest.

Meanwhile, PG&E scored a victory when federal regulators upheld an earlier decision allowing it to shield valuable assets from creditors in case of bankruptcy. In a practice known as "ring fencing," PG&E's parent company has insulated itself from $7 billion in debts accumulated by the utility. Dynegy Inc., a major power supplier, and the state of California accused the company of playing a shell game to protect its lucrative power-generating assets.

The parent company owns dozens of power-generating facilities nationwide and is a major supplier of natural gas to PG&E, which owes a large percentage of its debts to the parent company. Neither the state nor PG&E are saying anything about the fact that the utility paid billions of dollars in the last few years in dividends to stockholders and bondholders. One-third of the utility's cash flow in the first nine months of last year were channeled to the parent company.

In Washington February 26, Republican senator Frank Murkowski from Alaska presented a bill that would permit oil drilling inside the Arctic National Wildlife Refuge, located in that state. According to the New York Times, the legislation would also "promote production of natural gas, coal, and nuclear energy, and increase home-heating assistance for the poor."

Republican senator Trent Lott cast his support for the bill in nationalist terms, saying, "American dependence on foreign oil threatens our national security and our freedom." Murkowski added the goal of the bill was to reduce U.S. dependence on oil imported from "unstable nations," such as Iraq and Iran.

Bernie Senter is a member of United Food and Commercial Workers Local 120.  
 
 
Front page (for this issue) | Home | Text-version home