COLD NIGHTS

by Takuya Arai/PNN (edited by Dee Gray)

Currently, I share a house with four other students like myself. As well, on most days there are six or seven more people in our house at any given time because we invite our friends over. Mine is a large household. Since PG&E started charging more for their utility services, we have not been using the gas heater, even for cold nights. Our dishwasher has been unused for weeks. Despite our efforts, the energy bill has kept mercilessly increasing. Everytime I open the PG&E bill, I feel like I am receiving a graded exam from my professor.

For low-income people, increased energy costs pose the serious threat of losing access to the basic necessities of life. On March 27, as California residents’ discontent heightened, Medea Benjamin from Global Exchange, a non-profit organization based in San Francisco, protested against the approval of the 46 percent rise in electricity prices at the State Public Utilities Commission in San Francisco. Medea Benjamin ran for the U.S. Senate in the last election as a Green Party candidate. Although dealing with the energy crisis was not her agenda, she is now actively involved in it.

The office of Global Exchange is on Mission Street in San Francisco. Unlike the other parts of the city, the Mission District is filled with the liveliness and vitality of the Latino community. I noticed that there were more people on the street than in other parts of the town and there were different generations of people, such as little kids, young couples, people at work carrying stuff, mothers with babies, and elders on the street. Despite its geographical proximity to my house, I felt like I had come to Latin America.

The sophisticated arrangement in the office and the multi-racial working environment of Global Exchange impressed me. The receptionist told me that I could sit on the sofa to wait for Medea Benjamin, who was in a meeting. When she came out ten minutes later, I did not recognize her. She looked a lot smaller than the picture I’d seen of her in the New York Times. We both sat on a big comfortable couch and introduced ourselves . As a matter of fact, this was my first serious interview, and I think I appeared very nervous to her. People were walking by us, but it helped to create friendly atmosphere for me.

First we talked about the role of the PUC, which is responsible for providing California utility customers with safe, reliable utility service at reasonable rates. I read this in the PUC mission statement.

“It seems like what they are doing to us is the total opposite of what they are saying. It even sounds ironic and it is hypocritical. What do you think about this?” I asked as my first question.

“They are violating their own mandate.” Medea Benjamin replied in a soft voice. “If they continue on this path, this won’t even be the end of the rate increases. Companies are responsible for the crisis, whether it is the utility companies or the wholesale energy suppliers. And somehow, between the two types of companies, they’ve got to figure it out and pay for it.” Frankly , I was glad that she answered me with a sincere attitude as I was a little anxious that she might not take me seriously. Firstly, she does not know anything about me and secondly, I am just a reporter who has never done this kind of thing before.

Loretta Lynch, the president of the PUC, said that the light power users would face little rate increase compared to the heavy power users. But these power rate hikes will ultimately hit the residents of California. Those heavy power users, or the commercial power customers, will be forced to pass on their higher electricity costs by increasing the prices of their products or services.

Medea Benjamin agreed on this point. She said, “Businesses are going to pass on [the cost] to the consumers. So, if you buy food, if you ever go to a restaurant, if you go to the laundromat, if you go to Walgreen’s, wherever you go to make purchases, you are going to feel the increase in prices.”

The other thing that she pointed out is what is called the “baseline”. PUC and other utility companies determine who is going to get the rate increase depending on a certain baseline. That baseline is determined by region and by season but they do not set this baseline by how many people are in each house.

“If you are a poor family, living six, seven, or eight people in a household because you cannot live on your own, have extended family of grand parents, kids, you will use more energy. So you will be in a category of the “energy hog”. So, it actually discriminates against larger family or larger households.” Medea said the way that they are deciding who will get the rate hike is unfair and the PUC and other utility companies should change this way of looking at and trying to solve the problem.

There are many large families and large households, particularly in poor communities. Lorena, who works with us at POOR News Network, lives with 14 roommates in a two-bedroom apartment in the Mission District. She shares one bedroom with four other adults. Over the past three months, she saw the apartment’s energy bill increase by more than 60 percent. “My roommates do not have jobs. They are looking for a job. I do not know if we can afford to pay more for electricity.” Lorena said in English, which she does not use very often.

Although the PUC states that anybody who is low income can get subsidies for their energy, the program is very limited and only helps low-income people for three months. With one quarter of children in California living in poverty, it is impossible to cover all of them. In addition, how are they going to subsidize the majority of seniors who live on a fixed income?

“We should also remember the middle-class people.” Medea Benjamin said. “This can be very devastating for them because the middle class has really been hit hard by the cost of living. Many middle-class families are hanging on by a thread as well. They have high debts, high mortgage payments, high expenses related to child bearing, high cost of health care, so this does not just affect the poor. It also affects the middle class.” During the interview, somebody important called her and she had to take the call. She came back in less than one minute, but the telephone was ringing incessantly and I could hear many people in the conference room, where she had been.

In 1996, then-Governor Pete Wilson, a Republican, signed the bill that deregulated and dismantled California's electric utilities in the name of lower consumer power bills. I learned in school that the whole notion of deregulation is to promote free competition, so that companies that have the most efficient operations, and management can offer their services and products at the lowest price, which should be beneficial to the consumers. Advocates of Social Darwinism say that the winners in competition will bring the most benefits to the consumers and hence to the society. However, what is actually happening is the opposite. Those two utility companies have not been able to pay the energy wholesalers who raised energy prices after the deregulation. Those utility companies are now passing on the higher energy costs to the consumers.

“Do you think that the deregulation is the cause of the entire rate hike, or was this just a part of the scheme for them to get more money from the final consumers?” I asked.

“I think both. I think the deregulation has been absolutely disastrous. This was sold to the people of California as a way to reduce rates by at least 20 percent. We were told that the deregulation would lower consumer prices because of increased competition and we see it went from regulated cartel to deregulated or unregulated cartel. I think it is also a part of the scheme that the companies themselves have pressured the politicians to implement the deregulation as a way for them to make very obscene levels of profit.” She answered.

I kept thinking about things that I had learned in school, such as deregulation, lobbying, privatization, competition, etc. I was taught that those things bring prosperity to both business and the consumer. When we had discussions in class, I learned to use business jargon and got used to talking like a senior executive of a company. I remembered what I was studying and thought that my mindset was so one-dimensional.

Because of this rate hike, two utility companies are getting a lot of revenue, but at the same time, the wholesale price increased more than 10 fold last year. Even with increased revenue from higher prices, the two utility companies are unable to pay 13 billion dollars in months of outstanding debt to the wholesaler.

“What do you think is the best solution for all these rate hikes?” I asked, a basic question.

“I think the only solution is public power.” She replied right away. “We put both the generators of electricity and transmission and distribution of electricity in the hands of public entities.” She argued that privately owned utility companies have, “no incentive for conservation.”

Before the crisis, cities like Sacramento and Los Angeles had lower utility rates, better programs for conservation of energy, and better programs for uses of renewable sources of energy. Those cities that have their own public utilities have been sheltered from the crisis to a large extent. She insists that we should have municipal utility districts that are locally controlled and locally managed and they should be coordinated at the statewide level by a public power authority.

“If we have public power locally controlled where the interest is not profit for the shareholders, but the interest is providing precisely what is the mission statement of the public utilities, which is reliable sources of energy at affordable prices. I would add into that, reliable sources of clean energy at affordable prices. Then we can really make tremendous progress in cutting down our use of energy and getting off of our treadmill of using more and more fossil fuels.

She indicated that the company should, “divide themselves into the profit making and the non-profit making parts. There are certain things in modern day society that are too important to be left to the manipulation of the market place, things like water, energy, education and health care. These things need to be in the public sector.”

As we finished the interview, I thanked Medea Benjamin for her time and sincere responses to my questions. My hands were sweating but my tense mind was relieved. I stepped outside the building and thought it would have been great if I smoked a cigarette, but I decided not to because I quit smoking last year. However, and more importantly, I was encouraged to know that there was another person fighting hard for the public’s interest.