The Power Vampires
The Ghost of Ken Lay!
Sightings from The Catbird Seat
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June 21, 2007
Energy Companies Pay $84M
Forbes, Associated Press
Two power companies will pay $84 million to settle claims against them stemming from the 2000-2001 California energy crisis, the Federal Energy Regulatory Commission said Thursday.
PacifiCorp (amex: PPW.PR - news - people ), a unit of MidAmerican Energy Holdings Co. (otcbb: MDPWL.OB - news - people ), will pay $27.9 million to resolve charges that it manipulated the California and Pacific Northwest power markets in 2000 and 2001. MidAmerican Energy (other-otc: MDPWL.PK - news - people ) Holdings is a subsidiary of Berkshire Hathaway Inc. (nyse: BRKA - news - people )
In the second case, a unit of Houston-based El Paso Corp. (nyse: EP - news - people ) will pay $56 million to resolve all outstanding claims against it.
The California Attorney General's office and Public Utilities Commission, as well as other state agencies, have agreed to the settlements, FERC said.
"These settlements put us another step closer to finally resolving the lingering issues from the Western energy crisis and returning money to consumers," Commission Chairman Joseph T. Kelliher said. "Settlements, not prolonged and costly litigation, have given consumers more than $6 billion in refunds."
Shares of El Paso rose 22 cents to $16.88 in midday trading Thursday.
See also: Birds on the Power Lines
Date: Wed, 19 Jul 2006
Frm: "Greg Palast" <email@example.com>
Subj: Ken Lay's Alive!
KEN LAY'S ALIVE!
by Greg Palast
Don't check the casket. I know he's back. When I saw those lights flickering out at La Guardia Airport yesterday and heard the eerie shrieks and moans in the dark, broiling subway tunnels, I just knew it: Ken Lay's alive! We can see his spirit in every flickering lightbulb from Kansas to Queens as we head into America's annual Blackout season.
It wasn't always so. For decades, America had nearly the best, most reliable electricity system on the planet and, though we grumbled, electricity bills were among the planet's lowest. It was all thanks to Franklin Roosevelt and the Public Utility Holding Company Act which allowed for tough regulation of the power monopolies. They were told what they could charge, the maximum profit they could take and -- what I think about when the lights dim -- exactly how much they had to invest to keep the juice flowing.
But then, in 1992, a Texas oil man, George H.W. Bush, ordered to evacuate the White House by two-thirds of the US electorate, gave his Houston crony, Ken Lay, a billion-dollar good-bye kiss: Bush's signature authorizing deregulation of electricity.
But Lay's operation didn't pick up the really big bucks until after December 21, 1994, when the Enron chief wrote to the incoming governor of Texas, George W. Bush, asking the Governor-elect to grant him a special wish for Christmas:
"The Public Utility Commission appointment is an extremely critical one. We believe Pat Wood is best qualified…. Linda joins me in wishing you and Laura and the whole family a joyous holiday. - Sincerely, Ken."
And Georgie-Boy granted Kenny-Boy's wish, appointing Wood and thereby giving Texans an electricity regulator who stumped for Ken Lay's right to earn unlimited profits without any obligation to keep the lights on. Thus, by 1995, electricity deregulation had a foothold in the Lone Star state that would spread nationwide like Dutch Elm Disease.
But, unsatisfied with excessive profits, Lay and his team went for unconscionable profits, flickering the lights in California in the winter of 2000. "Let poor Aunt Millie … use candles," said one of Lay's minions as he deliberately schemed to engineer black-outs.
When the public reacted with anger, Bill Clinton, by a December 2000 executive order, ended Enron's right to trade power. Lay's response was, that month, through a lobbyist, to tell President-elect Bush to promote Lay's puppet regulator, Wood, to the Federal Energy Regulatory Commission.
Kenny-Boy wished it, and again, Georgie-Boy granted it.
Lay's hand-picked federal regulator Wood then kept the game going until, on August 14, 2003, the entire northeast, from Ohio to New York, went dark. Wood had to take the blame and resigned. Bush replaced him with Joe Kelliher, a regulator nominated by -- no points for guessing -- Ken Lay.
In the old, pre-Ken days of regulation, my fellow economists used to complain about something called the Averch-Johnson Effect. The A-J Effect was the result of regulations which gave companies incentives to gold plate the electricity system, making it way TOO reliable. Too much cash was spent on keeping the lights on.
Well, gone are the days of the A-J effect. The gold-plating is gone -- but not the gold. Under regulation, power sellers were limited by law to a profit of about 9%, what the law called a just and reasonable return. Now, the profits can be -- and are -- unreasonable, unjust and just out of sight.
For example, one company, Entergy, owns a nuclear plant in New York called, Indian Point. They get to charge for nuclear power as if it were produced by oil -- that is, they charge New York City residents at a price effectively set by OPEC, prices boosted by the war in Iraq.
Not surprisingly, Entergy today reported a record rake-in of profits from their nuclear business. No 9% limit for these good old boys. On top of that, the power company is relieved of all obligations to keep the lights on in New York City.
… And in New Orleans. The same company supplies all of the electricity in the City that Care Forgot. Under deregulation, they hadn't gold-plated the system; they hadn't even water-proofed it. Last year, when the levees burst and the city flooded, Entergy simply turned off the lights and declared their New Orleans subsidiary bankrupt. Leaving New Orleans in the dark was a profitable decision. The company reported a 23% leap in earnings for the third quarter of 2005, the period including Hurricane Katrina, a profit boost they attributed to "the weather."
Hey, are these guys droll, or what?
This year, Entergy's profits have stayed up in the clouds, no doubt helped by the cash the company saved by not bothering to restore electricity to a large number of their customers in New Orleans --who remain in the dark even today.
By now, you've got to ask: after the profiteering from Katrina, after the California power scandal of 2000, after the Great Black-out of 2003, even after the hand-cuffing of Ken Lay, why are we still under a deregulation regime that Ken Lay seems to rule from the grave?
Why is it that we're still at the mercy of power vampires?
The answer, in part, is that the bloodsucking is a bi-partisan feast. Entergy, the New Orleans nuclear company, is well defended in the US Senate by their former lawyer, Hillary Rodham, who now protects them under her new alias, Senator Clinton.
Ken Lay's gone, but the ghost of Ken Lay -- the marauding ghoul called deregulation -- stays to haunt us.
For more on Ken Lay, Entergy, New Orleans and the politics of power, read Greg Palast's just-released New York Times bestseller, "ARMED MADHOUSE: Who's Afraid of Osama Wolf?, China Floats Bush Sinks, the Scheme to Steal '08, No Child's Behind Left and other Dispatches from the Front Lines of the Class War." (Penguin Dutton 2006.)
Palast is also co-author of a treatise on the power industry, "Regulation and Democracy" with Jerrold Oppenheim and Theo MacGregor (United Nations ILO 2000/Pluto UK 2002).
Go to www.GregPalast.com
January 13, 2005
HECO under fire at hearing
By Deborah Adamson, Honolulu Advertiser
Residents voiced their concerns to state officials last night about Hawaiian Electric Co.'s proposed 7.3 percent rate increase, bringing up issues ranging from its effect on the elderly and the poor to better scrutiny of how the utility would spend the money.
"Where will the elderly and the poor be able to get the extra 7.3 percent?" said Caron Wilberts of Kaimuki. "It really would hurt the people of Hawai'i — 7.3 percent out of the elderly's Social Security is a great increase."
About 65 people attended the public hearing before the state Public Utilities Commission at the auditorium of Kaimuki High School. The commission is considering HECO's proposal to increase rates and will render a final decision within 10 months....
Honolulu users already pay one of the highest electric rates in the country, about 14.4 cents per kilowatt hour. The average rate nationwide is about 8 cents per kilowatt hour, according to the U.S. Department of Energy.
HECO filed for a rate increase in November, the first such request by the company since 1995. The utility said the higher rate, which is expected to bring in $74.2 million in additional revenue, is necessary to meet growing electricity demands across O'ahu as the economy improves....
HECO would formally request a 9.9 percent base rate increase, but that amount includes the transfer of an existing surcharge for conservation programs to the base rate. So the net increase on electric bills would be 7.3 percent.
Kenwynn Goo, a Kailua resident, bristled at the request for the rate increase.
"Why should HECO actually implement a rate increase?" he said at the hearing. "HECO had revenues of $410 million in the third quarter of 2004 and net income was also up by 28 percent to $26.2 million."
To support his assertion that HECO doesn't need to raise rates, Goo cited public comments made by Robert Clarke, chief executive of HECO parent Hawaiian Electric Industries, that a robust economy in Hawai'i should increase the utility's revenues.
"If Hawaiian Electric's own chief executive is making a statement that he foresees increased revenues collected due to a robust economy ... then HECO doesn't need a rate increase," Goo said.
"HECO's absolute power is corrupting absolutely."...
For more, GO TO > > > I Sing The Hawaiian Electric
The Mirant Corporation
Mirant CorporationAtlanta, GA, United States (NYSE: MIR)
Mirant Company Description
Mirant (pronounced MEER-uhnt) is trying to keep up its energy levels during difficult times. A top North American wholesale energy marketer, Mirant operates power plants with about 17,520 MW of primarily fossil-fueled capacity, mainly located in the US. It markets electricity, natural gas, and other commodities and provides gas transportation and storage services in North America.
Mirant emerged from bankruptcy protection in 2006. As part of its restructuring, the company has sold its power distribution utility in the Philippines, and is selling its utility in the Caribbean.
In 2006 Mirant bid to buy NRG Energy for $8 billion, but the offer was rebuffed.
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MEET M. MICHELLE BURNS
M. Michele Burns, age 50, is chairwoman and chief executive officer of Mercer. Ms. Burns joined MMC as executive vice president on March 1, 2006, assumed the position of chief financial officer of MMC on March 31, 2006 and moved to her current position with Mercer on September 25, 2006.
Prior to joining MMC, Ms. Burns was executive vice president and chief financial officer since May 2004, and chief restructuring officer, and chief financial officer since August 2004, of Mirant Corporation, an energy company, following the company’s bankruptcy filing in 2003.
Prior to joining Mirant, she was executive vice president and chief financial officer of Delta Air Lines, Inc. from August 2000 to April 2004. She held various other positions in the finance and tax departments of Delta beginning in January 1999. Delta filed for protection under Chapter 11 of the United States Bankruptcy Code in September 2005.
M. Michelle Burns, currently a director of Wal-Mart Stores, Inc. and Cisco Systems, Inc., she previously served as executive vice president.
For Wal-Mart Stores, Inc.:
Cash Compensation (FY December 2006)
Latest FY other long-term comp. $945,832
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In 2006, Wal-Mart was 67th most profitable corporation (profits divided by total revenue), behind retailers Home Depot, Dell, and Target, and ahead of Costco and Kroger. For the fiscal year ending January 31, 2006, Wal-Mart reported a net income of $12.178 billion on $344.992 billion of sales revenue (3.5% profit margin). For the fiscal year ending January 31, 2006, Wal-Mart's international operations accounted for about 20.1% of total sales. As of Mar 06, 2008, net sales for the 4-week period ending Feb 29, 2008 was $29.1 billion, up 8.9% from the previous year's results.
Wal-Mart is governed by a fifteen-member Board of Directors, which is elected annually by shareholders. S. Robson Walton, the eldest son of founder Sam Walton, serves as Chairman of the Board. Lee Scott, the Chief Executive Officer, serves on the board as well. Other members of the board include Aída Álvarez, James Breyer, M. Michele Burns, James Cash, Roger Corbett, Douglas N. Daft, David Glass, Roland A. Hernandez, Allen Questrom, Jack Shewmaker, Jim Walton, Christopher J. Williams, and Linda S. Wolf.
Notable former members of the board include Hillary Clinton (1985–1992) and Tom Coughlin (2003–2004), the latter having served as Vice Chairman. Clinton left the board before the 1992 U.S. Presidential Election, and Coughlin left in December 2005 after pleading guilty to wire fraud and tax evasion for stealing hundreds of thousands of dollars from Wal-Mart. On August 11, 2006, he was sentenced to 27 months of home confinement, five years of probation, and ordered to pay $411,000 in restitution.
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FOR EVEN MORE POWER VAMPIRES, GO TO...
Aloha, Harken Energy!
Birds on the Power Lines
British Petroleum: Buzzards in the Pipelines
The Carlyle Group: Birds that Drink from Cesspools
Dirty Gold in Goldman Sachs
Dirty, Dirty Politics & Bishop Estate
Googling for the Ghost of Ken Lay
I Sing the Hawaiian Electric
The Secret Lives of Duke and Dusty
The Story of Enron
The Mating of Chevron-Texaco
The Myth & The Methane
Marsh & McLennan: The Marsh Birds
Marsh & McLennan’s Putnam Investments
The Nature Conservancy
The Nuclear Nests
Citigroup: Vampires in the City
Vultures up to their necks in Tesoro Petroleum
What Price Waterhouse?
William Simon Says
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Last Update August 18, 2008, by The Catbird