The California Energy Crisis

Speech given at the 27th National Convention of the CPUSA.

There are no words to describe the beauty of this Convention -- from Sam's absolutely outstanding keynote to the other excellent remarks, and the breadth of the participation from our nation and from the world.

After a year of price gouging and record profits by the energy monopolies, for the first time a few weeks back the wholesale rates of natural gas and electricity magically went down sharply in California.

They attribute this to everything under the sun, including milder weather.

But, this sudden change was brought about by a powerful broad people's movement, with street heat at its core, and the shift in the political balance in Washington and the nation since Senator Jeffords left the Republican Party.

Even Federal Reserve Chairman Alan Greenspan, the guru of high finance and Wall Street, cautioned last week that California's energy problems are "worrisome" because they are contributing to the downturn in the nation's economy and to the drop in overall corporate profit margins.

He then called for price restraint in the market.

Under mounting political pressure, including from some Republicans backing a Senate bill establishing tough wholesale electricity rate controls, the Republican-controlled Federal Energy Regulatory Commission (FERC) recently moved to institute somewhat broader wholesale electricity price controls throughout the West and to look into expanding refunds for overcharges in California.

While continuing to press for greater deregulation and energy monopoly profit margins exceeding pre-crisis levels, they are worried about both the short- and long-range consequences of a political and economic firestorm that they are having a hard time containing.

One of Bush's new appointees to the federal regulatory agency recently suggested penalties for any power generators proven to be manipulating the market. But, last week, he added, "I think the rhetoric is still pretty hot out there. Talking about a windfall profits tax and expropriation of property...it's not a great climate" for investing in new plants in California.

But, it is more than rhetoric "out there."

In the California legislature, there is a bill under consideration establishing a windfall profits tax on wholesale electricity rates.

Also, a measure just signed into law creates a state power authority that helps finance new privately-owned power plants under state supervision.

But, more importantly, the new law authorizes the state to build, buy and run power plants under the public ownership and control of the state of California, including the taking over of profiteering power generators through the use of eminent domain.

The windfall profits tax bill and the public ownership/eminent domain aspects of the new state law emerged from a broad people's front that, at this time, generally sees these two as left pressure points on the Bush administration and the energy monopolies, and as measures coming into active play if all else fails in moderating wholesale natural gas and electricity wholesale rates and in the return of billions of dollars in estimated overcharges.

At this time, the main political focus in California is on demanding a full refund of the $8.9 billion in overcharges. If the newly imposed FERC price control measures do not work, it will likely rekindle a congressional battle behind a tough wholesale electricity price control bill now in the House and for re-introduction in the Senate of the bill.

The Bush administration is blaming the Democratic governor and state legislative leadership for policies leading to the high utility consumer rates and the drain on the California budget in order to prepare the political climate for a Republican comeback in California in the 2002 elections.

But a Los Angeles Times poll last week showed California voters believe the governor is doing a better job than Bush on the power problem by an almost 4 to 1 ratio.

Our Southern and Northern California Party districts are very involved in the energy fightback, helping to stimulate the key demands and building the protest actions up and down the state.

In the broad front on the energy fightback, the organized labor movement in recent months has come out swinging, and has the clearest voice.

Picking up on the idea of rolling blackouts that we experienced a couple of months back, the California Labor Federation, working closely with local labor councils, the union retiree groups and other social movements, has organized a series of six rolling demonstrations starting with Oakland last month and concluding with Los Angeles, demanding "Stop Rolling Blackmail."
The Oakland demonstration began at the federal building where the head of the California labor movement blasted the energy monopolies and the Bush administration, charging them with collusion.

California Labor Federation leader Art Pulaski called for:

* Federal energy price controls.
* Takeover of the pirate power generators that continue the profiteering and price gouging, using the power of eminent domain.
* An excess profits tax now!

The large march and protest in Oakland ended at the Duke power plant where, in a mock eminent domain takeover, the demonstrators put up a proclamation declaring this the property of the people of the state of California.

An excess profits tax, public ownership/eminent domain and a full refund of overcharges to the state, advanced mass demands in California, fit in the framework of an expanding and increasingly heated national battle for tough wholesale electricity and natural gas price controls and for stronger regulation at the national level.

Additionally, of the many states that have deregulated the electricity market, the majority are reconsidering deregulation and Nevada has repealed it.

Even some Republican politicians, worried about their political fortunes in the 2002 elections, are being forced into the anti-Bush, anti-ultra right camp on this or that issue, including some aspects of the energy fightback.

Flexible and broad tactics, based on the united action of millions, is needed more than ever.

We must help join the movements in the energy fightback together with other movements, nationally and internationally.

It is possible to mold them together into a mighty all people's front that brings about defeats for the Bush administration and the ultra right leading to and including the 2002 elections.

This is the prerequisite for moving to higher levels of struggle.