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UE ISSUES BRIEFING
Confronting the
Energy Profiteers

CONFRONTING
CORPORATE
POWER

Issue
Briefings:

Job Killing Free Trade Schemes: FTAA and 'Fast Track'

Defending Public Education

Tax Cuts for the Rich

Five Attacks on Working People (overtime pay, free speech, TEAM Act, 'Right-to-Work', Anti-Salting Bill)

• Confronting Energy Profiteers

Protecting Social Security

Campaign Finance Reform

RELATED:

Protect and Defend Social Security (UE Policy, 2000-01)

Stop the Southward NAFTA Expansion- No to the Free Trade Area of the Americas (FTAA) (UE Policy, 2000-01)

Stop the Attack on Public Education  (UE Policy, 2000-01)

Saving Social Security by Destroying It? (UE News)

Online Social Security Workshop

A Tale of Two Citizens (Capitol Hill Shop Steward)

Hands-Off Social Security! (UE Political Action)

Support Real Labor Law Reform

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Political
Action

UPDATE, SUMMER 2001

The Bush Administration has announced plans to drastically increase energy production as their so-called "solution" to our national energy crunch. This scheme does nothing about energy waste or price gouging by big corporations, and must be opposed as anti-consumer and environmentally destructive.


BACKGROUND

Consumption increased in the 1990s as energy prices fell or flattened out. The economic expansion also contributed to more use of gasoline, heating oil, natural gas and electricity.

With the gas lines and high prices of the 1970s and 1980s just a fading memory, our elected representatives at both the national and state levels did very little to reduce the dependency of our country on fossil fuels. Instead, however, politicians deregulated the energy industry from top to bottom. In California, for instance, the state legislature deregulated the electrical industry in 1996 by a unanimous vote of Republicans and Democrats!

During the 1990s, regulation of energy prices were virtually eliminated on fuel oils and natural gas, and the electricity industry was convulsed by a frenzy of restructuring that will ultimately lead to the removal of remaining price controls. And to top-off this man-made disaster, the energy industry has experienced an unprecedented wave of corporate mergers and consolidations, concentrating ownership of the energy industry as never before.

The unfortunate result of this deregulation debacle has been rapidly escalating prices for fuels and electricity due to monopoly price gouging and market manipulation, along with entire parts of our national electrical system that are on the verge of collapse. In California, the result is rolling electrical blackouts, bankrupt utility front companies, and the taxpayers and ratepayers left holding the candle.

Natural gas customers in the Midwest are likewise left with heating bills that have soared as much as 500% in one year, adding up to several thousand dollars in added heating costs.

CURRENT STATUS

The entire energy deregulation craze was largely pushed by Republicans, often with Democratic help. Politicians who opposed this fiasco were few and far between.

Although this serious crisis hits hard at the pocketbooks of working families, there have been few proposals so far to address the problem. Some lawmakers have promoted increased financial aid to seniors and the poor for high heating bills, which at least deals with the hardest-hit victims of the crisis.

Perhaps the only positive by-product of this mess has been the big setback dealt to unfolding energy deregulation schemes across the country.

UE POSITION

Our union played a leading role in demanding that the politicians address the energy crisis of the 1970s and 1980s, and we’ll do it again. UE correctly placed the blame for high prices and shortages on the politicians who refused or failed to challenge out-of-control corporate greed. Once again, working people are being victimized and endangered by the energy conglomerates, and we must demand a political solution to this national crisis.

TALKING POINTS

  • The Senate and House of Representatives must act quickly to stop the energy rip-off of working people. Several immediate actions must be taken to deal with this national crisis:

    1. Congress must pass legislation placing an indefinite moratorium on all further state deregulation of the electricity industry. Next, each state or regional deregulation scheme must be analyzed and reviewed for viability, with protection of the consumers put at the top of the list of priorities.

    2. Congress must investigate the corporate concentration of power within the energy industry, and question the U.S. Justice Department/Antitrust Division for its failure to question or review the avalanche of energy industry mergers over the past decade. An absolute five-year prohibition on additional energy company mergers must be imposed.

    3. Congress must pass an "Energy Industry Excess Profits Tax," taxing at a 100% rate all energy industry profits that exceed 110% of profits reported for the same periods during 1999.

    4. Proceeds of the "Excess Profits Tax" will be rebated to customers and ratepayers. A formula must be devised to ensure a proportional rebate to all who were gouged and over-charged. A massive program to assist working people in paying their gigantic and unforeseen energy bills must be initiated and adequately funded.

    5. Congress must investigate the extensive political contributions of the energy industry, and the impact that this may have had — or might still be having — on the behavior of elected officials regarding the energy crisis.

    6. Immediate price controls must be imposed, rolling back all prices for electricity, natural gas, gasoline, diesel fuel, heating oil, and other home heating fuels to levels not to exceed 110% of their peak levels during 1999.

    7. Congress must begin to devise a national energy policy, exploring and investigating long-term solutions to our dependence on fossil fuels, with an emphasis on the development of renewable and clean sources of energy such as solar and geothermal sources, with a renewed commitment to various conservation measures.

  • Take advantage of the opportunity during your Congressional appointment to tell your own story about sky-high energy bills. Although the energy crisis has hit harder in certain regions of the country, the effects of deregulation are not yet being felt in many areas — yet.

  • Can anyone tell us what the purpose of deregulation of the electrical industry was supposed to be? What was broken that needed to be fixed? Or was this just a classic case of big business spreading around campaign cash, talking up a mythical need for a mythical solution to a mythical problem, and then waiting for the prices to go up and the profits to roll in?

  • Does Congress intend to do something about the growing corporate merger wave in the energy industry? Ownership of the oil, natural gas, and electrical industries is far more concentrated today than it was in 1973, the year of the first oil crisis.

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