Op-Ed by Phil D. Coffers
In 1932, the 8 largest utility holding companies controlled 73% of the market. This made it impossible for states to regulate utility companies – or protect the public – which led to the enactment of the “Public Utility Holding Company Act of 1935” to regulate the electric utility sector by either:
- Confining their operations to a single state or
- Limiting and regulating operations that crossed state lines
Each state was allowed a regulating agency – a public utilities commission (PUC) – to set rates, uphold rules, and protect the public. The act outlawed the highly leveraged, multi-level pyramids that holding companies used to hide losses and inflate stock prices higher than their actual value. Utility holding companies weren’t allowed to own foreign utilities or unrelated foreign companies. They were limited to a single purpose, integrated utility system, and not allowed to venture into ancillary projects, like telecommunication.
Keep it simple, stupid (KISS) is a design principle which states that designs and/or systems should be as simple as possible. Wherever possible, complexity should be avoided in a system—as simplicity guarantees the greatest levels of user acceptance and interaction.
In the early 1990s, a global plan emerged to deregulate the utility industry. This was referred to as “privatization” and proponents said it would benefit everybody – especially the public. Nope.
In 2005, The “Public Utility Holding Company Act of 1935” was repealed. Americans have basically become powerless against utility companies – especially in regard to utility “Smart” Meters and all the horrors that come with them. Activist Post is one of many that have reported about efforts against these meters – including by several states. There was also documentary produced about it in 2013 – Take Back Your Power – which was updated in 2017 and is free to watch online.
The Who, What, When, Where, Why, and How the public lost its protection…
Again, PUHCA of 1935 made sure that the states were the primary controlling body over the utilities, regardless of who owned and/or operated every aspect of the utility process from energy generation to customer service. One might say the act was sealed with a KISS.
Deregulation proponents – many of whom were at the top of the food chain – didn’t like this arrangement. After all, profits from private and municipal utilities usually went back to the community instead of to them. So they decided to label this arrangement as a monopoly and fought to have it discontinued. Deregulation proponents’ sales pitch that everyone would benefit from privatization was beyond outlandish since investor owned for profit companies were designed to make money for investors whether this benefitted the public or not. Regardless, they persisted and this eventually led to taking control over the utilities away from the states and it was déjà vu all over again…
Chapter 1: In 1992, President George H. Bush signed the National Energy Policy Act. This act created an exemption for nonutility wholesale electricity generators. It also allowed holding companies to own those exempt wholesale generators as well as to own foreign utilities.
Chapter 2: In 1996, under the Clinton administration, the Federal Energy Regulatory Commission, Order 888 and 889, opened up access to the power transmission grid in all states to all energy suppliers in the US.
Also The Telecommunications Act of 1996 allowed utility holding companies (that would otherwise be subject to PUHCA 1935 restrictions) to enter the telecommunications industry. (Aaaaaaaaahhhhhhhhh!)
Chapter 3: In 1997, additional legislation allowed holding companies to engage in the brokering and marketing of energy commodities as though they were a nonutility.
Some may remember how this backfired in 1996 when California became the first state to try utility deregulation. By 1997, Enron, in Oregon, and PG&E, in California, had launched one of the most audacious criminal enterprises since the Great Depression. Eventually some people went to jail and Enron ceased to exist. HOWEVER – the same scam continued throughout the country at the expense of American taxpayers. Another example includes when PG&E, Shell Energy and Enron created the New York Energy Providers Association (NESPA) in order to lobby New York’s Public Utility Commission.
Chapter 4: In 2005, President George W. Bush enacted the “Energy Policy Act of 2005” which repealed PUHCA 1935 in its entirety and removed state and local control of the transmission grid.
So the foxes had officially taken over the hen house AGAIN. Utility holding companies now could incorporate telecommunications and foreign companies could buy American utilities, and vice versa.
The 2005 legislation also introduced the concept of utility “Smart Meters” and referred to them as AMI meters. (Argh.)
Chapter 5: The “Energy Independence and Security Act of 2007” allowed for the entire framework – and funding – for the “Smart Grid” and utility “Smart” Meters. In 2007, Bush included the Smart Grid under the Department of Energy.
Chapter 6: In 2009, President Obama provided $3.4B in federal stimulus money to utility companies for the installation of the “Smart” Grid and utility “Smart” Meters. Companies gobbled it up – as well as raised customer rates – to install this crap everywhere despite the opposition and all the problems that came with these meters (including fires and explosions).
Simply put, current laws protect utilities, telecom companies, and all their greedy heartless bedfellows- NOT THE PUBLIC – and the beat down will go on until these laws are changed.
La dee da dee dee. La dee dad dee dah.