23. A WARNING FOR ALL AMERICANS WHO RELY ON MONOPOLY
The 5th "best censored" story of 1978 was titled "Winter
Choice: Heat or Eat." It revealed that there were more than 200
deaths directly linked to the shut-off of gas and electric utility service
in the winters of 1975, '76, and '77.
In December, 1981, a public utility with a monopoly in Northern California
arranged a utility rate increase which, if followed by regulatory agencies
across the country, could make those figures pale in contrast.
The Pacific Gas & Electric Co. (PG&E), headquartered in San
Francisco, was granted a $909 million rate increase by the California
Public Utility Commission (PUC).
Almost overnight, the utility bills of PG&E subscribers doubled
or even tripled. The resulting protest was extraordinary. However the
news media told consumers that the rate increase was necessary due to
the high cost of fuel which PG&E had to pay.
Plain Speaking, a small tabloid publication in San Francisco, conducted
an investigation which revealed otherwise. The publication found that
PG&E buys 40% of its natural gas from Canadian companies at twice
the price of California gas. Following is how Plain Speaking explained
"PG&E buys the gas through Pacific Gas Transmission Co. (PGT),
which PG&E controls. PGT in turn gets it from two Canadian companies
-- Alberta and Southern Gas (which PG&E owns outright) and Alberta
Natural Gas (which PGT controls by owning 44.9% of the stock). In other
words, PG&E buys this high priced gas from itself, simply moving
the money from one part of its operation to another. By buying such
quantities of its own Canadian gas at steep prices, PG&E makes it
look as though its fuel costs are high, thereby justifying to the PUC
its rate increase. Meanwhile, PG&E's subsidiary, PGT, is making
a fortune. Earnings on a common share of PGT stock rose an astounding
97% in the third quarter of.1981, and PGT expects earnings for the last
quarter of 1981 to be higher yet. To top it all off, when PG&E goes
to the PUC to request a rate increase, it does not report the PGT profits,
so that PG&E looks less profitable than it really is. The PUC, of
course, lets PG&E get away with it."
The media's failure to fully explain the corporate interlocks which
permitted this consumer rip-off and the potential impact on energy bills
nationwide qualifies this story for nomination as a "best censored"
story of 1981.
Plain Speaking, 3/1-15/82, "Why Our PG&E Bills are So High."