A DISASTER FOR SAN DIEGO: DEREGULATION OF ELECTRIC UTILITIES -- (House of Representatives - September 06, 2000)

[Page: H7246]


   The SPEAKER pro tempore. Under a previous order of the House, the gentleman from California (Mr. FILNER) is recognized for 5 minutes.

   Mr. FILNER. Mr. Speaker, I rise tonight to tell my colleagues about a tragic situation going on in San Diego, California. Like all of my colleagues, I went home at the beginning of August for a work period in our district, but what I found in San Diego was a disaster, and not a natural disaster but a man-made disaster, a disaster made by a few companies who are willing to put the whole quality of life of San Diegoans at risk for their own profit; a disaster that did not affect only a few people, but affected all of the residents of San Diego County, 2 1/2 million people.


[Time: 19:30]

   What was the basis of this disaster? San Diego is the first area in California to fully deregulate the electrical utility industry, to fully deregulate, which means that San Diegans pay the market price for electricity. The market price is determined by the few generators of electricity who control the power grid into San Diego.

   So what was the result of this deregulation, a deregulation which was supposed to bring competition and lower the cost? It doubled and then tripled the cost of electricity in just 3 months. In just 3 months, if they were a resident in San Diego County, their bill went up from $45 to $50 to $100 one month and $150 the next month. If they were a small business struggling to get by, their $800 bill went up to $1,500 in one month and then went up to $2,500 the next month.

   How could they stay in business with those increases in prices?

   Hospitals, libraries, youth centers, schools, the military, all of their budgets thrown into turmoil. And what was the reaction of people? Rebellion. Many people just tore up their bills.

   Elected bodies in San Diego County said they are not going to pay the doubled or tripled price, they are going to pay only what they paid the year before, because they knew their costs were not determined by a supply-and-demand function but by price gouging and manipulation of the market.

   Rallies were held. Demonstrations took place. Political figures at the city, county, State level tried to begin to solve this problem. The State legislature acted earlier this week by putting a cap on the retail price of electricity, a cap on the retail price. But what the State legislature did was merely put a Band-Aid on a bleeding city. Because that price was just deferred to a later time. It was not refunded. It was deferred. And the people who would have to pay that price were not the folks who gouged San Diegans to begin with, but the actual consumers who were the victims of this price gouging.

   We must go beyond what the State of California's legislature did. The Federal Government must act and can act. The wholesale price of electricity can be set by the Federal Energy Regulatory Commission. And this Congress should direct that commission, known as FERC, to in fact roll back the wholesale price of electricity to the price that was paid before deregulation in which people had made profits and good profits at that price; and yet they were charging and are now charging prices double, triple, quadruple, five times what they were before deregulation.

   I have a bill, my colleagues, called the Help San Diego Act: Halt Electricity Price Gouging in San Diego and Halt it Now.

   The people in San Diego cannot survive the doubled and tripled prices of electricity rates. Small businesses are going under. Seniors are having to make choices between using their air conditioning or paying for their food or medical prescriptions.

   I ask my colleagues to look closely at San Diego, a little dot on the southwest corner of our Nation, because we are the poster children for the future. The rest of the State of California will soon be deregulated. Many of my colleagues in their States have deregulation bills in their legislatures. This House has deregulation bills in front of it. This deregulation cannot work, my colleagues, when a basic commodity is controlled by a few monopoly corporations.

   The San Diego example makes it clear the consumer must be protected if this kind of policy is going to be pursued.

   Deregulation in California took place without consumer protection. It took place in an atmosphere of monopoly control of a basic commodity. My city was in danger of dying economically. We have stopped it temporarily with State legislative action. But the Federal Government must act now. FERC must roll back the wholesale price of electricity retroactively.

   The people, the companies, who forced these unconscionable rates on the citizens of San Diego should pay the price and not the consumers, the victims themselves.

   My colleagues, look closely at San Diego. Your city may be next.