mark hertsgaard

Independent Journalist & Author

mark


Monopoly Power

Not many people, when they look back at the Enron scandal,
say, “That was fun, let’s do it again sometime.”

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But that’s what Congress is saying this week. Inside the energy bill
being readied for President Bush is a repeal of the Public Utilities
Holding Company Act.

The name isn’t sexy, Pook-ka for short, but this law helps keep the
lights on in households across America.

It empowers the federal government to regulate the ownership of electric
utilities.
Pooh-ka was passed in 1935 to enhance competition and prevent a repeat
of the merger mania of the 1920s.

That’s when three giant holding companies gained control of half of
America’s electric utilities and raided their revenues to finance risky
outside ventures.

The utilities were left holding the bag when those ventures failed.
Utilities that survived had to raise prices and cut services to
customers. Small investors were ruined.

Today, utilities are even more important. Our entire economy depends on
electricity and utility assets now amount to one trillion dollars.

But, amazingly, the media has given the act’s proposed repeal virtually
no news coverage. Maybe that’s because both the House and the Senate
favor deregulation and so agree on this move.

Advocates of repeal include investor Warren Buffett. He condemns it as
an outdated relic that discourages efficiency and raises prices.

But Buffett also has a personal interest in repealing the act. It would
give his Berkshire Hathaway holding company a green light for a
5-billion dollar utility merger.

The merger that would stretch from the Great Lakes to the Pacific but is
prohibited under current law.

Sound familiar? In the 1990s, mere partial deregulation allowed the
Enron thievery that tripled consumers’ bills and shafted investors.

Repealing this law now would lead to more mergers. That would leave the
nation’s electricity controlled by a few giant companies that could
impose monopoly prices and avoid such necessary investments as
maintaining the electricity grid.

We’ve seen this movie before, and it doesn’t have a happy ending.

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About Mark

Independent journalist Mark Hertsgaard is the author of seven books that have been translated into sixteen languages, including Bravehearts: Whistle Blowing in the Age of Snowden; HOT: Living Through the Next Fifty Years on Earth; and A Day in the Life: The Music and Artistry of the Beatles. He has reported from twenty-five countries about politics, culture and the environment for leading outlets, including The Guardian, Der Spiegel, Vanity Fair, The New Yorker, Time, Mother Jones, NPR, the BBC and The Nation, where is the environment correspondent. He lives in San Francisco.

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