By Edward Shanahan
youíre not outraged, youíre not paying attention:
pain and suffering caused by the lies and criminal behavior of
the Enron Corp. has, at its root, when all other explanations
are exhausted - deregulation - the elevation by Republicans and
Democrats alike of the free market as the only legitimate arbiter
of national economic policy.
have deregulated the airlines, the banks, insurance companies,
radio, television and cable ownership, and finally the public
utilities - electricity, natural gas, and telecommunications services.
We have even deregulated the public school systems on the altar
of the marketplace.
free market for driving up rates and fees in all those areas,
or for leaving us without any service at all.
Goliath did not generate any energy itself, but simply bought
and sold through secret arrangements energy produced by others
and in the process built a deregulated house of cards out of overvalued,
but ultimately worthless, balance sheets and stock certificates.
When it collapsed so did the life savings of thousands of workers
and the financial well-being of communities and institutions that
bought into the Enron myth.
the federal regulators? On furlough from their posts, courtesy
of the government, which decided to let Wall Street take over
national energy policy.
our own little dirty and potentially risky deregulation story
closer to home. The Massachusetts Electric Co., if you havenít
noticed, is part of an entity called National Grid, which, it
turns out is a global corporation based in London, England.
purchase within the last two years of the New England Electric
Systems, which included Massachusetts Electric, the Eastern Utilities
Associates, plus its purchase of Niagara Mohawk in New York a
little more than a year ago, National Grid is the ninth largest
electric utility in the country. It also has half-a-million natural
a company it does not produce a single kilowatt of power. Under
deregulation, according to a report in the New York Times, National
Grid has sold all its power plants and now buys electricity from
various other producers.
about the experience of Bay State Gas. Co., the local provider
of natural gas to homes and businesses in Hampshire County and
the other key public utility for our communities. But, wait, Bay
State Gas is hardly local and, in fact, since 1999 our gas supplier
is actually called NiSource, the creation of years and years of
consolidations and mergers that, . according to company publicity,
actually traces its roots back to 1853 when the Fort Wayne (Ind.)
Gas Light Co. was organized.
a holding company - a more appropriately nefarious description
would be evil cartel - with headquarters in Merrillville, Ind.,
has hardly improved the lives of its recently acquired customers
in the Northeast, many of whom are probably still making payments
for gas they used last winter when energy costs were whipsawed
and then exploited by the deregulated companies until they impoverished
How is utility
deregulation, which took hold in Massachusetts in 1998, working?
Depends on who it was intended to benefit. The utilities are doing
just fine, but there is little evidence of any competition - which
was a goal - nor a ceiling on electricity or gas costs to consumers.
Last summer, of course, when it got hot, as happens in the summer,
customers were told not to use so much power, hardly a sophisticated
response by a multi-billion dollar global corporation. Thanks
National Grid for your concern, but why donít our monthly payments
provide for investment in plant and capacity so that when it gets
hot we can use our fans and air conditioning without fear of brownouts?
In the bad
old decades-long period of state and federal regulation, the utilities,
after public testimony and examination of balance sheets and capital
spending plans for power generation and distribution, were given
periodic rate increases that guaranteed the companies a fixed
return on their investment in exchange for expenditures by the
companies for capacity that could assure uninterrupted, affordable
power for the consumer. For several generations of Americans,
electric power was regarded as an essential public resource, not
to be subject to the whims of fast-buck entrepreneurs and greedy
regulation, which might possibly have been good for the customer
was determined to be bad for the corporations, because they were
left behind by the booming stock market. So the rules were changed;
the marketplace - otherwise known as deregulation - replaced regulation.
What is best for the company, its executives and stockholders
might was supposed to be good for the customer, but. surprise,
surprise, it wasnít. We recall the experience of the citizens
of California who a year ago could not keep up with the explosion
in the cost of electricity and also had to cope with brownouts
and shutdowns in what in peacetime once was regarded as an essential
the Congressional hearings, corporate finger-pointing, auditorsí
excuses, political payoffs, and employee lawsuits have been forgotten,
the utilities, like much of our national economic activity, will
remain unregulated because hardly anyone is talking about its
role in the economic mess that has engulfed us, brainwashed as
we are about the virtues of the free market.
as the marketplace remains the national God, we are doomed to
repetitions of the unfolding scandal of Enron. We had our pockets
picked by the Savings and Loan robbers, another deregulated catastrophe,
which locally produced the white-collar heist of the Heritage
Bank. Who paid for that unregulated disaster - employees and taxpayers.
Yet, we learned nothing from the experience.
more scandals are required before it finally dawns on us that
it is terrible public policy to let the fox into the chicken coop?
We can only imagine the scale of financial scandal - a few years
hence - that inevitably emerges from the charter school movement.