HIgh wattage: consumer front groups wire the debate on deregulation - electric utility deregulation

Progressive, The, June, 1997 by Ruth Conniff

Hang onto your wallet. Big companies and their friends in Congress are launching a crusade they say will help consumers get cheaper electricity. Don't bet on it.

Like telephone services and cable TV, electric utilities are going through a shake-up. A recent rash of mergers and federal proposals to deregulate the $200-billion-a-year electric-power industry have the utilities in a frenzy. Over the last few months, industry advocates have stirred up what looks like a consumer revolt. Phony grassroots organizations -- activists call them "astroturf" groups -- are popping up all over the nation. These industry-backed organizations, with names like Citizens for a Sound Economy and Competitive Utility Rates for Everyone, claim to speak for consumers who are fed up with high utility bills. They are taking out ads touting deregulation and "consumer choice." But there's something fishy about this sudden spasm of populist sentiment.

"They're consumer front groups," says Larry Frimmerman of the Ohio Consumer Council. Some of them, like the Alliance for Affordable Power, a utility-sponsored group in Ohio, have names that are confusingly similar to older, more traditional consumer groups. "There are no citizens involved," says Frimmerman. "The name makes it sound like they're really for the public. Nope."

Other groups include the Coalition for Affordable Power in Louisiana (whose ads declare: "Standing up for You! We're on your side!"), funded by Entergy Corporation, one of the largest investor-owned-utility holding companies in the nation. and the Alliance for Fair Competition, another Entergy-backed group in Mississippi. It's getting hard to keep track of who's really representing consumers," says an attorney who works with consumer groups.

An organization called the Electric Utility Shareholders Alliance has taken out full-page ads in The Washington Post to argue, peculiarly, that people who own shares of stock in utility companies are the little guys who need protection when the government restructures the electric-power system.

The ads, which show pictures of senior citizens, say the average shareholder is an elderly woman on a tight budget.

"It's a lot of bull," says Charlie Higley of the consumer group Public Citizen. "Most of the shares are owned by Wall Street bankers. Those elderly women surely don't control the destinies of these companies."

Those faux populist ads got the chairman of the Electric Utility Shareholders Alliance (EUSA), Bill Steinmeier, into trouble recently. Steinmeier gagged at a press conference when reporters confronted him about the membership of his group. "Steinmeier said small businesses, the elderly, farmers, and veterans have lent EUSA their support," Kristine Ziegler reported in The Energy Daily, an industry watchdog publication. "However, under questioning from reporters, he was unable to furnish a list of supporters or member organizations. which he said total more than 200. Steinmeier also acknowledged that his organization has solicited funding from investor-owned utilities, but he denied the group was a front for utilities."

Utilities have been throwing money at lobbyists, spending millions in their effort to influence plans for deregulation. According to a recent report by the Center for Responsive Politics, the industry spent some $32 million on lobbying last year, and has hired such heavies to represent it as Haley Barbour, former chair of the Republican National Committee, as well as Vin Weber, retired Republican Congressman from Minnesota, and Dennis Eckart, who, as a Democratic Representative from Ohio, was a member of the House Commerce Committee.

Americans for Affordable Electricity, a coalition of big utilities, auto makers, and other industries that use a lot of power, is coordinating the pro-deregulation lobbying campaign.

A deregulation road show, starring Representative Dan Schaefer, Republican of Colorado, has been touring the country this spring. Schaefer, who received $125,824 from energy interests over the last two years, according to the Center for Responsive Politics, is packing hearing rooms from Illinois to Texas to Virginia, gathering testimony on a bill that would restructure the electric industry and mandate competition.

For such an arcane, technical issue, the debate over electricity deregulation is generating an awful lot of hoopla.

An airplane flew over the county courthouse in Richmond, Virginia, during a Schaefer hearing on April 18, pulling a sign that read Consumer Choice 4 Electricity. The hearing room was packed. Protesters on both sides of the issue handed out flyers at the door. The standing-room audience spilled out of the auditorium into the hallway. A giant, cigar-smoking dog with a walking stick and a bowler hat milled around with the crowd.

Beware of Dog, a protest flier warned. the flier. produced by a group called Citizens for State Power, quoted Allen Cunningham, a DuPont executive: "In a world of deregulated electric-utility rates, '. . . the big dog eats first."' The "big dogs" are the corporations driving the deregulation movement, the flier explained.