The California Energy Crisis

BY:Juan Lopez| September 21, 2001

Speech given at the 27th National Convention of the CPUSA.

There are no words to describe the beauty of this Convention
— from Sam’s absolutely outstanding keynote
to the other excellent remarks, and the breadth
of the participation from our nation and from the world.

After a year of price gouging and record profits by the
energy monopolies, for the first time a few weeks back the wholesale rates
of natural gas and electricity magically went down sharply in California.

They attribute this to everything under the sun, including
milder weather.

But, this sudden change was brought about by a powerful
broad people’s movement, with street heat at its core, and the shift in
the political balance in Washington and the nation since Senator Jeffords
left the Republican Party.

Even Federal Reserve Chairman Alan Greenspan, the guru
of high finance and Wall Street, cautioned last week that California’s
energy problems are "worrisome" because they are contributing
to the downturn in the nation’s economy and to the drop in overall corporate
profit margins.

He then called for price restraint in the market.

Under mounting political pressure, including from some
Republicans backing a Senate bill establishing tough wholesale electricity
rate controls, the Republican-controlled Federal Energy Regulatory Commission
(FERC) recently moved to institute somewhat broader wholesale electricity
price controls throughout the West and to look into expanding refunds
for overcharges in California.

While continuing to press for greater deregulation and
energy monopoly profit margins exceeding pre-crisis levels, they are worried
about both the short- and long-range consequences of a political and economic
firestorm that they are having a hard time containing.

One of Bush’s new appointees to the federal regulatory
agency recently suggested penalties for any power generators proven to
be manipulating the market. But, last week, he added, "I think the
rhetoric is still pretty hot out there. Talking about a windfall profits
tax and expropriation of property…it’s not a great climate" for
investing in new plants in California.

But, it is more than rhetoric "out there."

In the California legislature, there is a bill under consideration
establishing a windfall profits tax on wholesale electricity rates.

Also, a measure just signed into law creates a state power
authority that helps finance new privately-owned power plants under state

But, more importantly, the new law authorizes the state
to build, buy and run power plants under the public ownership and control
of the state of California, including the taking over of profiteering
power generators through the use of eminent domain.

The windfall profits tax bill and the public ownership/eminent
domain aspects of the new state law emerged from a broad people’s front
that, at this time, generally sees these two as left pressure points on
the Bush administration and the energy monopolies, and as measures coming
into active play if all else fails in moderating wholesale natural gas
and electricity wholesale rates and in the return of billions of dollars
in estimated overcharges.

At this time, the main political focus in California is
on demanding a full refund of the $8.9 billion in overcharges. If the
newly imposed FERC price control measures do not work, it will likely
rekindle a congressional battle behind a tough wholesale electricity price
control bill now in the House and for re-introduction in the Senate of
the bill.

The Bush administration is blaming the Democratic governor
and state legislative leadership for policies leading to the high utility
consumer rates and the drain on the California budget in order to prepare
the political climate for a Republican comeback in California in the 2002

But a Los Angeles Times poll last week showed California
voters believe the governor is doing a better job than Bush on the power
problem by an almost 4 to 1 ratio.

Our Southern and Northern California Party districts are
very involved in the energy fightback, helping to stimulate the key demands
and building the protest actions up and down the state.

In the broad front on the energy fightback, the organized
labor movement in recent months has come out swinging, and has the clearest

Picking up on the idea of rolling blackouts that we experienced
a couple of months back, the California Labor Federation, working closely
with local labor councils, the union retiree groups and other social movements,
has organized a series of six rolling demonstrations starting with Oakland
last month and concluding with Los Angeles, demanding "Stop Rolling
The Oakland demonstration began at the federal building where the head
of the California labor movement blasted the energy monopolies and the
Bush administration, charging them with collusion.

California Labor Federation leader Art Pulaski called

* Federal energy price controls.
* Takeover of the pirate power generators that continue the profiteering
and price gouging, using the power of eminent domain.
* An excess profits tax now!

The large march and protest in Oakland ended at the Duke
power plant where, in a mock eminent domain takeover, the demonstrators
put up a proclamation declaring this the property of the people of the
state of California.

An excess profits tax, public ownership/eminent domain
and a full refund of overcharges to the state, advanced mass demands in
California, fit in the framework of an expanding and increasingly heated
national battle for tough wholesale electricity and natural gas price
controls and for stronger regulation at the national level.

Additionally, of the many states that have deregulated
the electricity market, the majority are reconsidering deregulation and
Nevada has repealed it.

Even some Republican politicians, worried about their
political fortunes in the 2002 elections, are being forced into the anti-Bush,
anti-ultra right camp on this or that issue, including some aspects of
the energy fightback.

Flexible and broad tactics, based on the united action
of millions, is needed more than ever.

We must help join the movements in the energy fightback
together with other movements, nationally and internationally.

It is possible to mold them together into a mighty all
people’s front that brings about defeats for the Bush administration and
the ultra right leading to and including the 2002 elections.

This is the prerequisite for moving to higher levels of



    Juan Lopez is chairman of the Communist Party in northern California and statewide coordinator. He has been a labor and community activist during the nearly forty years he's lived in Oakland, where he and his wife raised three children. He was formerly a member of the Teamsters union and a shop steward.

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