Public Utilities: Among the Greediest of Corporations (Part 1 of a Series on Corporate Greed)

Have you looked at your utility bill lately? I mean, really looked at it? Sure, the first thing we all see is the amount due column, which inspires plenty of grumbling. But read the itemization. Look at all those extra taxes and fees. They add much padding to the bottom line—and to the bottom line of the utility corporation as well.

Did you know that a good many of these so-called ‘taxes’ often do not, in fact, end up being transferred to the government coffers? Parent companies end up writing off their subsidiaries, who in turn don't pay the taxes they appear to owe. Additional fees deliberately misnamed either as taxes or fees, have been lobbied for by the utility itself: they go right into the utility's bank account, inflating their own net profit. The end result of this money shufflle is that you, the consumer, have been charged more than once for the services provided.

When you pay your monthly utility bill, be assured that a large portion is earmarked for these special-interest expenditures intended to benefit the utility, and not to improve your service.

This is not easy to track down, but it can be done so obliquely with a bit of research. Here in California, P.G. and E., according to the Senate Office of Public Records (via the Center For Responsive Politics), is at the very top of the list for lobbying expenditures. Their spending for 2010? An obscene $45,460,000!

Northern California’s utility giant, P.G. and E. began back in 1852 as the San Francisco Gas Company. The early supplies of gas for cooking and lighting were by means of gasification from coal (rather than the natural gas we now use). As this technology was further studied and implemented, more start-up companies came into existence. By 1905, there were 5 different companies that then merged and became Pacific Gas and Electric. By 1952, the number of buy-outs and mergers had added up to 520 different gas and electric suppliers consolidated under the P.G. and E. mantle.

Gradually, P.G. and E. became a monopoly provider of power for Northern California, much as Southern California Edison did for the lower half of the state.

Despite so-called "regulating agencies," rates have skyrocketed over the years, far out of proportion to other price increases. From my parent's average P.G. and E. bills between 1946 and 1950 of $5.70 per month to our current average bills of $250 is a whopping 4,286% increase. By contrast, a loaf of bread or quart of milk has gone up "only" 1,400% in the same period. This not a small increase, but contrasted against the rise in utilities, you see a 206% higher rate of increase for the utilities.

It is unconscionable.

(Please note: I am terrible at math. To insure my figures are accurate, I used an online percent increase calculator. You may find it useful or helpful for your own research, and can find it here):

http://www.marshu.com/articles/calculate-percentage-increase-decrease-percent-calculator.php

The bigger a company becomes, the less responsive it is to its consumers. In the case of these utility giants, termed as ‘legalized monopolies,’ the consumer has nowhere else to turn for gas and electric service.

The much-touted solar conversions are outrageously expensive, and therefore unavailable to most consumers. The break-even point, (averaging 20 years as promoted by the industry sales force), is likely to be beyond the remaining life expectancy for many.

Wind turbine power is another alternative energy source available, in principle, to get “off the grid” and obtain electrical power for free. Again the equipment is prohibitively expensive for the majority of people. Additionally, the consumer must be located in an area with sufficient wind on a consistent basis. If that criteria is met, there are hurdles to be jumped in the form of city and county zoning regulations. Beyond that, wind turbines, seen so gracefully turning on wind farms in the hills near freeways, are not so nice up close and personal. They are noisy. It would be like having an idling helicopter right outside your door. Unless you live on a property with massive acreage where the turbine can be located an acre or two away from your house, it is not a practical idea for the masses.

The Mission Statement of the California Public Utilities Commission (CPUC) :

” The California Public Utilities Commission serves the public interest by protecting consumers and ensuring the provision of safe, reliable utility service and infrastructure at reasonable rates, with a commitment to environmental enhancement and a healthy California economy. We regulate utility services, stimulate innovation, and promote competitive markets, where possible, in the communications, energy, transportation, and water industries.”

In this author's opinion, these statements, in a very generous assessment, at least stretch the truth. In point of fact, these agencies seem to be created to better serve the profits of the utilities themselves. I am not alone in making such a charge of the fox guarding the hen house.

Worse, many utility corporations have been caught in outright fraud, which, if committed on such a scale by you or I, would result in a conviction for felonious grand larceny.

One such incident involves the current touting of so-called “green energy” and the forced implementation of fluorescent light bulbs. The small ones for lamps and ceiling lights in household fixtures are referred to as “compact fluorescent lights,” or CFLs.

P.G. and E. had a program in place to make these (very expensive) new bulbs available to California consumers at a discount. What happened?

According to the consumer watchdog organization, T.U.R.N. (The Utility Reform Network), here’s exactly what happened:

“A program funded by customers permits PG&E, SDG&E and SoCal Edison to sell the bulbs at a discount. The reduced-cost CFLs are supposed to conserve energy and reduce our state's need for expensive new power plants. But utility greed and mismanagement have resulted in the bulbs being sold out-of-state, providing little direct benefit to the consumers who pay for the discount.”

Excuse me? "A program funded by consumers..." For this sham of 'going green,' we are forced to pay twice? Since these CFLs are now mandated by law, the old style incandescent bulbs are no longer being manufactured. I smell collusion and kickbacks.

These fluorescent bulbs are advertised as taking less energy to operate and as lasting over twice as long as a 'regular' (incandescent) bulb. Neither is true.

They supposedly put out as much light for lower wattage, hence the supposed 'energy savings.' Perhaps young eyes cannot tell the difference in illumination, but older eyes can. The older you get, the more and brighter light you need to see well.

Just like "low-flow" faucets, (because of the reduced water pressure), the water must run longer to get the job done, ergo, no actual savings are realized. The same is true of the so-called "energy efficient" CFLs. There is a lower level of light output, so more or higher wattage bulbs must be used; say "bye-bye" to any true savings.

Also, they do not last over twice as long, as claimed in the ads and on packaging. In fact, we have had to replace these bulbs almost twice as often, meaning they actually last only half as long as standard ones! These claims, then, are false advertising and propaganda, pure and simple.

CFLs are expensive, as well: up to $5.00 per bulb, as opposed to about that amount for a 2 or 4 pack of standard incandescent bulbs. That makes for a further dip into the consumer's wallet, whether or not it appears on the actual utility bill.

This article from Utility Consumers Action Network (UCAN) breaks down the utility bill line items, but if you pay close attention, you will immediately notice that various 'line items' have been singled out for specific charges on your bill. These are the 'double-dipping' charges. In other words, they are supposed to be part of the normal cost of doing business, and are already included under the basic charges for gas and electricity.

Now, it seems to me, with all the promotion of reduced consumption, whether mandated or voluntary, there is no need to assess charges for increased consumption. Something is very wrong, here.

Adding to the insult of the double, triple and quadruple-dipping into the wallet of the utility consumer is the practice of money wasted on advertising.

Why does a monopoly need to advertise? We see advertisements for P.G. and E. in many areas: billboards, TV, print media and online. None of this comes cheaply. Advertising is, in fact, very expensive. We are captive consumers. This money would be better spent on lowering our rates than on pointless advertising and propaganda campaigns.

It may or may not be technically illegal, but it is most certainly unethical.

© 2-20-11 Liz Elias 

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