investor owned utilities (IOU)

Edited by Satoko Kishimoto and Olivier Petitjean - Transnational Institute, June 2017

You would be forgiven, especially if you live in Europe, to think that public services are by nature expensive, inefficient, maybe even somewhat outdated, and that reforming them to adapt to new challenges is difficult. It would seem natural to assume – because this is what most politicians, media and so-called experts tell us continuously – that we, as citizens and users, should resign ourselves to paying ever higher tariffs for services of an ever lower standard, and that service workers have no choice but to accept ever more degraded conditions. It would seem that private companies will inevitably play an ever larger role in the provision of public services, because everything has a price, because politicians have lost sight of the common good and citizens are only interested in their own individual pursuits.

This book, however, tells a completely different story. Sometimes it may feel as though we are living in a time when profit and austerity are our only horizons. In reality, below the radar, thousands of politicians, public officials, workers and unions, and social movements are working to reclaim or create effective public services that address the basic needs of people and respond to our social, environmental and climate challenges. They do this most often at the local level. Our research shows there have been at least 835 examples of (re)municipalisation of public services worldwide in recent years, some of them involving several cities. In total there have been more than 1600 cities in 45 countries involved in (re)municipalisation. And these (re)municipalisations generally succeed-ed in bringing down costs and tariffs, improving conditions for workers and boosting service quality, while ensuring greater transparency and accountability.

Read the text (PDF).

By Various - June 20, 2016

This document is an example of an actual "Just Transition" agreement hammered out through negotiations after years of organizing by environmental organizations and dialog with unions. While it's no doubt far from perfect, it still represents a starting point for similar campaigns elsewhere, and like a union contract, it's the product of negotiations following struggle. To secure better deals, the unions and ecological movements need to keep organizing and building their collective power.

Read the report (PDF).

Greg Palast and Robert Bryce interviewed by Amy Goodman - Democracy Now, May 16, 2006

[in 2001] California was plunged into an unprecedented energy crisis. Rolling blackouts shut down parts of the state. Power bills soared. It turned out that at the center of the crisis was Enron — although the company’s role wasn’t fully understood at the time. We play excerpts of audiotapes that proved Enron asked power companies to take plants offline at the height of the California energy crisis–in order to make more money.

AMY GOODMAN: In California, the state’s former governor Gray Davis praised the jury for convicting Ken Lay and Jeffrey Skilling. David said, quote, "Given the way Enron ripped off California, I think the jury did an excellent job. I take some solace in the fact that Lay and Skilling be will send some time in prison," he said. Six years ago, California was plunged into an unprecedented energy crisis, rolling blackouts shut down parts of the state, power bills soared. It turned out that at the center of the crisis was Enron, although the company’s role wasn’t fully understood at the time. Two years ago, lawyers involved in a lawsuit in Washington state obtained audio tapes that proved Enron asked power companies to take plants offline at the height of the California energy crisis, in order to make more money. In one taped phone call, an Enron employee celebrated the fact that a massive forest fire had shut down a transmission line carrying energy into California, causing the price of energy to rise.

By Larry Everest - Z Magazine, April 2001

By Jessie Muldoon and Todd Chretien - International Socialist Review, February-March 2001

THE LIGHTS are out in California. Rolling blackouts have cut electricity to millions. Only this time, it's not the San Andreas Fault that's to blame. It's the free market.

A year ago, electricity cost roughly 3.5 cents per kilowatt-hour on the wholesale market. Today, that same amount costs upward of 40 cents. Why? Back in 1996, energy companies and big businesses showered millions of dollars on California politicians, convincing them to vote unanimously to "deregulate" the publicly owned and managed state electrical utility system. The state would no longer set prices and supervise the industry. In exchange, the energy companies promised Californians lower prices and cleaner power brought on by free-market competition.

Instead, a handful of energy profiteers have made a killing, while millions of Californians suffer higher rates and the harmful effects of power outages. The results of the power crunch have been devastating to ordinary people. Nathaniel Goodwin, who is 73, has emphysema and needs an electrical oxygen concentrator to breathe. As rolling blackouts spread across California, he stocked up on crackers and peanut butter, arranged for a battery-powered backup, and hoped for the best. "I live by myself and I've got to have my oxygen," he told a reporter.¹

"We've got elderly folks with arthritis who have to have heat. Many of them have medical devices they need to live and no one knows what will happen when the electricity is turned off," said Marie Harrison, a community leader in the Bay View Hunters Point district of San Francisco, which is predominantly Black.²

The utility companies claim that hospitals and fire stations will not be affected by the blackouts, but two hospitals--Valley Convalescent Hospital in Watsonville and Community Medical Centers in Fresno--suffered outages. Across the state, workers are paying the price for deregulation. California Steel Industries of Fontana, the largest steel plant on the West Coast, sent 400 workers home without pay because of skyrocketing electrical costs. The Miller Brewing Company plant in Irwindale laid off its whole workforce for a week without pay.3

Schools have lost power or have been forced to cut back on heat, leaving tens of thousands of children shivering in the dark. Contrary to popular belief, temperatures during California winters often hover between 40 and 50 degrees, and few buildings have proper insulation. Meanwhile, the crisis shut down some of California's biggest oil refineries, which could quickly lead to a substantial hike in prices at the pumps. A dairy farmer put it this way: "This problem has the potential to be substantially more devastating than any earthquake we've seen."4

One economist estimated that the state lost $1.7 billion in wages, sales, and productivity in just one week of blackouts.5 And there is no end in sight. The Independent System Operator (ISO), the state-appointed agency that controls the California power grid, warned that Californians should get used to rolling blackouts for at least the next two years.6

This article explores how deregulation and the free market are behind the crisis, and why we should fight for public power as a solution.