Ken Lay's Alive! by Greg Palast

[Guest guest]

Wed, 19 Jul 2006 19:24:09 -0400

" Greg Palast " <palast

Ken Lay's Alive!

 

 

 

 

KEN LAY'S ALIVE!

by Greg Palast

Wednesday, July 19, 2006

 

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

http://www.GregPalast.com.

 

Media requests to interviews(at)GregPalast.com