U.S. intelligence chief's cover blown in Ottawa
JEFF SALLOT
OTTAWA -- Prime Minister Stephen Harper met yesterday with John Negroponte, the U.S. director of national intelligence, at what was supposed to be a secret meeting to discuss security issues at a time when the two countries are trying to smooth troubled waters in the wake of the Maher Arar affair.
The unannounced meeting in Ottawa took place 11 days after Mr. Harper called President George W. Bush to say Canada was lodging a formal diplomatic protest about the deportation of Mr. Arar, a Canadian software engineer, from the United States to the Middle East, where he was tortured.
Canadian and U.S. officials tried to keep the meeting under wraps, but Mr. Negroponte's cover was blown when reporters spotted him and U.S. Ambassador David Wilkins being escorted to Mr. Harper's Parliament Hill office.
Also attending the meeting were Foreign Affairs Minister Peter MacKay, Public Safety Minister Stockwell Day and Michael Wilson, Canada's ambassador to the United States.
Traditionally, visits by cabinet-rank U.S. officials are accompanied by a bit of public fanfare, including an advance announcement by Ottawa. But Mr. Harper's guarded style of government has been characterized by unpublicized federal cabinet meetings and an unannounced visit by the Prime Minister of Haiti. Mr. Harper's office issued a hastily written note about Mr. Negroponte's visit only after journalists began asking why Mr. Bush's top intelligence official was on Parliament Hill. The note, which mistakenly referred to the director of national intelligence as the director of national security, said Mr. Negroponte was making a courtesy call.
"Mr. Negroponte is here on a liaison visit to Canada, as part of a regular exchange regarding security issues between Canada and the U.S.," the note said. "This is an indication of how closely we work together."
The U.S. embassy said Mr. Negroponte was staying for dinner and "touching base" with Canadian officials.
Speaking with reporters on his way to the Prime Minister's Office, Mr. MacKay said he did not know exactly what was on the agenda for the meeting with Mr. Negroponte. "He's meeting with Stockwell Day. He's meeting, I believe, with the Prime Minister just as a courtesy."
The United States has not yet formally responded to Canada's diplomatic protest note on the Arar case, Mr. MacKay said. Mr. Wilson delivered the note to the State Department on Monday.
Last month, a federal commission of inquiry cleared Mr. Arar of any involvement with terrorism. The inquiry also said Washington likely relied on false and inflammatory intelligence reports from the RCMP in its decision to deport Mr. Arar in 2002.
Thursday, October 19, 2006
Canada's New Bush-Style Politics
By Richard Fricker
October 14, 2006
As an American journalist visiting my wife’s relatives in Canada, I’ve always been struck by how ardently the country’s political discourse focused on substance – the budget, health care, schools, roads – with little of the cheap theatrics and angry divisiveness of U.S. politics and punditry.
Reading and listening to the Canadian news media during those family trips could be a tad boring, but it also was touching, like remembering your earnest grade-school civics teacher lecturing about the wonders of the American democratic process.
But in my visit this past summer, I noticed that the tone of Canada suddenly had changed. There was a nastier edge to the commentary. There were not so subtle appeals to racism and xenophobia, references to Muslim neighborhoods in Quebec as “Quebecistan” and to Lebanese-Canadians as “Hezbocrats,” a play on the Muslim group Hezbollah.
To someone who has covered U.S. politics for three decades, there was a shock of recognition. Standing out starkly against the bland traditions of Canadian governance was the pugnacious ‘tude of American political combat, wedge issues pounded in with a zeal that put the goal of winning and holding power over everything else.
It was as if a virus that had long infected the people south of the border had overnight jumped containment and spread northward establishing itself in a new host population. But – as I began to study this new phenomenon – it became clear that this infection did not just accidentally break quarantine.
Rather, it was willfully injected into the Canadian body politic by conservative strategists and right-wing media moguls who had studied the modern American model and were seeking to replicate it.
Canada’s Prime Minister Stephen Harper even brought in Republican advisers, such as political consultant Frank Luntz, to give pointers on how the ruling Conservative Party could become as dominant in Canada as the GOP is in the United States.
Canada had its version of Rupert Murdoch and Fox News in the Asper brothers and their CanWest Global Communications Corp., which owns the National Post, the Montreal Gazette and nine other Canadian newspapers, 25 television outlets and two radio stations.
It was the Montreal Gazette and the National Post that trumpeted the phrase “Quebecistan” after demonstrators in Ottawa and Montreal protested Israel’s bombardment of Lebanon in summer 2006.
Columnist Don MacPherson equated those protests, where some demonstrators waved Hezbollah flags, with pro-terrorism. “It’s finally becoming respectable again to express support for terrorists,” MacPherson wrote on Aug. 8, 2006, in the Montreal Gazette.
Meanwhile, CanWest’s National Post offered up a Canadian version of Ann Coulter in columnist Barbara Kay.
In one of Kay’s columns, she noted that 50,000 Lebanese-Canadians lived in Montreal and added, “We can expect those numbers to swell as Hezbollah-supporting residents of southern Lebanon cash in on their Canadian citizenship and flee to safety.”
Kay denounced Quebec as “the most anti-Israel of the provinces and therefore the most vulnerable to tolerance for Islamist” causes.
“The word would go out to the Islamophere that Quebec was the Londonistan,” Kay wrote. “It won’t if our political class takes its cues from principled Stephen Harper rather than shameless Quebec politicians who led the pro-terrorist rally.”
‘Clone de Bush’
Harper, Canada’s photogenic 47-year-old prime minister, has emerged as the face of modern Canadian conservatism much the way George W. Bush has come to personify right-wing politics in the United States.
Born in Toronto in 1959, Harper moved west to Alberta in 1978 to work in the petroleum industry. Similarly, Bush cut his teeth as a Texas oilman, albeit a failed one.
Much as that oilfield experience shaped Bush’s persona and Texas money fueled the American Right, so too did Alberta and its oil industry influence the political development of Harper and the emergence of modern Canadian conservatism.
Harper earned a bachelor’s degree and his masters in economics from the University of Calgary. By 1985, then in his mid-20s, he had turned to politics, gaining recognition as a bright operative and landing a job as chief aide to a Tory member of Parliament named Jim Hawkes.
But Harper grew disenchanted with the compromising style of Canada’s Tories who – like Prime Minister Brian Mulroney – often worked collaboratively with other political parties in Ottawa to maintain social programs for Canadians. Harper concluded that Mulroney’s Progressive Conservative Party was too liberal, so he quit it in 1986.
At age 28, Harper was recruited by Preston Manning, the founder of Canada’s Reform Party, and became the party’s chief political officer. Harper ran for the House of Commons against his old mentor, Hawkes, in 1988, losing badly.
But the defeat did not dampen Harper’s political ambitions. He continued to puzzle over how a revamped conservative movement might shake up Canadian politics and ultimately gain power.
For inspiration in building this new brand of Canadian conservatism, Harper looked to Washington, where Rep. Newt Gingrich, R-Georgia, was promoting a combative style designed to shatter the longtime Democratic grip on the U.S. House of Representatives. In Gingrich’s view, Republicans had to replace cooperation with confrontation.
In 1993, Harper ran for the House of Commons again, this time aided by a tactic pioneered by U.S. conservatives – having ostensibly independent organizations tear down one’s opponent with large sums of money outside the legal limits on campaign spending.
In this case, a group called the National Citizens Coalition went on the offensive against MP Hawkes, undermining his political support enough so that Harper was able to win the seat in Calgary West.
Harper was learning, too, from conservative spinmeister Frank Luntz, who helped Gingrich draft the “Contract With America,” which became the centerpiece of the Republican victory in the U.S. Congress in 1994. Luntz was a specialist at the take-no-prisoners-style of politics that envisioned permanent conservative control of Washington.
Harper picked up other tips from Bush’s political adviser Karl Rove, such as the importance of transforming the Christian evangelical movement into an activist base for conservative politics.
Harper’s brash conservatism grated on the more populist positions of Manning’s Reform Party, which once rebuked Harper for not standing with the party’s internal policies. For his part, Harper considered Manning too inclined to compromise.
In January 1997, Harper resigned his Reform Party seat in Parliament and went to work as vice president of the National Citizens Coalition, the outside organization that had helped Harper defeat Hawkes in 1993.
Harper soon rose to be the coalition’s president and served notice that the group would become a vehicle for smashing Canada’s political status quo.
In a speech in the United States to a major conservative organization, the Council for National Policy, Harper declared that “Canada is a Northern European welfare state in the worse sense of the term, and very proud of it.”
Harper also mocked Canadians as complacent and ill-informed. “If you’re like most Americans, you know almost nothing except for your own country,” he told his CNP audience. “Which makes you probably knowledgeable about one more country than most Canadians.”
Back in Canada, Harper also began ratcheting up the political rhetoric, co-authoring an article referring to Canada’s Liberal government as a “benign dictatorship” held together by incompetence. The article also sought conservative unity and praised the hard-edged right-wing commentary in media outlets owned by mogul Conrad Black.
Harper cobbled together a platform of issues that exploited Canada’s latent social, cultural and economic resentments. He proposed raising the age of sexual consent, permitting more corporal punishment of children, initiating a program similar to school vouchers, and resisting issues that favored French-speaking Quebec.
As this Americanized version of Canadian conservatism took shape, Harper was cribbing, too, from another rising U.S. politician, George W. Bush. Harper said his goal was to tap into a political base “similar to what George Bush tapped.”
New Party
Amid a surge of anti-minority sentiments, Harper merged his operations at the Canadian Conservative Alliance with those of Peter MacKay, the last leader of the Progressive Conservative Party. In 2003, they officially formed the Conservative Party of Canada.
Their timing was perfect. As with the congressional Democrats in the United States a decade earlier, the Canadian Liberal Party found itself beset with corruption allegations and suffering from growing public resentment about high taxes.
In contrast to these tainted Liberals was the fresh-faced Harper at the head of a shiny new movement with powerful backing from right-wing interest groups, neoconservative media outlets and stirred-up social conservatives.
Though Conrad Black’s media empire had collapsed in a financial scandal, some of his properties, such as the National Post, were snapped up by CanWest Global, which shared Black’s staunchly pro-Israeli stance on Middle East affairs.
Harper also brought into play evangelical Protestants, through his membership in the Christian and Missionary Alliance, which opposed gay rights, was staunchly anti-abortion and targeted North Africa’s Muslims for conversion to Christianity.
In 2004, Harper engineered a political breakthrough for the Conservatives in Ontario, boosting their standing in the House of Commons by 25 seats.
This new conservative coalition flexed its muscles again in January 2006, denying the Liberals control of Parliament by claiming 124 seats (out of 308) and putting Harper in position to piece together a coalition government, which he did.
Harper was sworn in as Canada’s new prime minister on Feb. 6, 2006, consolidating right-wing political power across the North American continent. President Bush finally had a likeminded Canadian leader who also shared Washington’s neoconservative doctrine for confronting the Islamic world.
The tone of Canadian political discourse has followed this shift in the government, especially with CanWest media outlets ready to trumpet news that puts the Islamic world in the worst possible light.
For instance, on May 19, 2006, the National Post published a front-page article by expatriate Iranian journalist Amir Taheri, claiming that Iran was enacting legislation that would require color-coded “badges” for Christians, Jews and Zoroastrians.
“Jews would be marked out with a yellow strip of cloth sewn in front of their clothes while Christians will be assigned the colour red” and Zoroastrians would wear blue, Taheri reported in the article distributed by Benador Associates, a public relations firm representing neoconservative writers, such as Michael Ledeen and Richard Perle.
With its obvious Holocaust allusion, Taheri’s story flashed around the world, picked up by the New York Post, Rush Limbaugh and the powerful U.S.-Israeli lobbying group, the American Israel Public Affairs Committee.
Harper and Australia’s Prime Minister John Howard, who was visiting Canada, joined in denouncing Iran for the purported badge legislation.
However, Taheri’s article turned out to be untrue. The Iranian legislation contained nothing about making religious minorities wear colored badges. After the facts were challenged, the National Post retracted the story and later published an apology.
Media Confrontation
In June 2006, Harper applied another lesson from the U.S. Republican playbook: Even with a supportive right-wing news media protecting your flanks, still pick a fight with the rest of the national news media.
Claiming to be victimized by hostile questions from Parliament Hill reporters, Harper announced that he would favor regional news outlets with interviews, while shunning the supposedly “elitist” national press corps.
“I have trouble believing that a Liberal prime minister would have this problem, but the press gallery at the leadership level has taken an anti-Conservative view,” Harper said, ignoring the role the same journalists had played in highlighting Liberal Party corruption which cleared the way for the Conservative Party victory.
Harper mandated that reporters sign up in advance to ask questions at news conferences and then weeded out journalists considered too liberal, according to Yves Malo, president of the press corps gallery.
Harper’s staff “made it very clear they were taking their cue from the White House,” Malo told me. “They were always telling us how things were done in Washington. The first time we resisted we were called ‘liberals.’ Now, we’re called ‘liberal ideologues.’”
Much as Bush speaks almost exclusively before friendly, well-screened audiences, Harper tends to grant exclusive interviews to CanWest media outlets, Malo said.
Despite the lingering embarrassment over the bogus “colored badge” story, CanWest’s neoconservative attitudes resurfaced in July 2006 when war broke out between Israel and Lebanon.
As Israeli bombers inflicted heavy civilian casualties in Lebanon in retaliation for Hezbollah’s capture of two Israeli soldiers, Lebanese-Canadians staged protests demanding that Israel cease its attacks.
Montreal Gazette columnist MacPherson chastised Quebec politicians who attended the rally for not condemning Hezbollah and for not discouraging Hezbollah sympathizers from participating. National Post writer Kay termed the rally “virulently anti-Israel.”
Launched from CanWest’s newspapers, the words “Quebecistan” and “Hezbocrats” were suddenly buzzing through Canada’s public debate.
While this kind of divisive rhetoric is common in the United States and is even encouraged as a way to energize the political base, it marked an escalation of political stridency for Canada.
Some of that fury seems to have subsided since a ceasefire took hold between Lebanon and Israel in late summer. But the larger question remains whether Harper will succeed in transforming Canada into a more belligerent and bellicose nation, much as Bush has done in the United States.
For generations, Canada has prided itself on its well-liked image around the world. It is a nation renowned for sending peacekeepers abroad not occupying armies. Aside from ice hockey and occasional over-indulgence in beer drinking, Canadians are known for their civility, not combativeness.
There is also the possibility that having seen the consequences of right-wing governance in the United States, Canadians will recoil at the thought of losing their pleasant country with its national health insurance and fairly comfortable lifestyle, in favor of the more cut-throat economic system south of the border.
Some analysts suspect, too, that the Bush connection could ultimately hurt Harper, who is sometimes referred to as “un clone de Bush.” With Canadian troops dying in Afghanistan and violence rising in the Middle East, Harper’s coziness with Bush may become a liability as it has been for British Prime Minister Tony Blair.
Over the past several months, Harper has seen his popularity decline and the backing of his coalition partners erode. It remains to be seen if Harper’s American-style conservatism can survive – let alone thrive – in Canada.
The Liberal Party – after selecting new leadership in December – is expected to force a new round of elections early in 2007. That election may well turn out to be a test of whether the American brand of conservatism has a future as a political export.
http://www.consortiumnews.com/2006/101306c.html
Three Strikes and Stephen Harper is Out
PEJ News - C. L. Cook - Though there are myriad reasons Canadians should have a quick end to the public service career of Mr. Harper - his personality, arrogant disregard of both Canadian tradition and sensibilities, and his cosy relationship with the Republican regime to the south leap immediately to mind - three recent “initiatives” are enough to sink the bastardized, remnant Conservative Party, and in so doing turn back too the latest and greatest threat to her sovereign survival Canada has faced yet in four centuries of resistance to American expansionist designs.
www.PEJ.org
Three Strikes and Stephen Harper is Out
C. L. Cook
PEJ News
October 19, 2006
Outside Alberta’s Calgary School, scholars of Canadian history are well aware of Washington’s repeated attempts to consolidate control of the North American continent, fulfilling the original intent of the (in)famous Monroe Doctrine. Canadian prairie farmer, two-time contender for the leadership of the pre-Harper Conservatives, and author of a book chronicling those expansionist efforts, David Orchard records four military invasions of the country, and the constant machinations against all spheres of Canadian life emanating from south of the 49th. This is not the stuff of fantasy, but historical fact.
Orchard was painfully aware of Harper’s Yankee tendencies in matters of economy and social engineering, and made as a condition of ceding his Tory leadership challenge Peter MacKay’s promise he would not allow political congress between Canada’s founding Conservatives and Harper’s hard right Alliance party. Orchard warned all who would listen, but ultimately, his was a voice left largely in the wilderness by an over-concentrated, and disinterested Canadian media. Of course, MacKay broke his promise immediately, enjoining Harper’s Alliance in exchange for a cabinet post and the nebulous illusion Britain’s Mr. Brown knows well; a tacit promise of eventually proving heir apparent to the party’s leadership.
What worried David Orchard’s sleep was soon made real by Harper following his January minority assumption to Sussex Drive; in the scant months since, Stephen Harper has managed to make Canada wholly unrecognizable to many of its citizens; eviscerating vital societal determinants that distinguish the country’s independence, Harper has accepted whole cloth the Republic philosophy ruling, and ruining, the United States these half-dozen horrible years past. In foreign policy, law and order, and on the environment, Ottawa now mirrors Washington perfectly. Like an echo, Harper has, on the strength of an immensely unpopular minority administration, taken it upon himself to “harmonize” the country’s judiciary, military and environmental ethos with the U.S., ostensibly determining an end to Canada’s social democratic experiment.
Striking at the very pillars of the nation, Harper has accelerated efforts begun by his Liberal predecessors to redefine Canada’s foreign policy, not only making it a more conspicuous actor within George W. Bush’s so-named Global War on Terror, but also maintaining a muscular approach in Haitian affairs. Worse, Harper shamelessly sallied forth, pre-empting our good neighbour south, to the front of the line of those nations that would support Israel’s siege and destroy campaign against the civilian inmates of Prison Camp Palestine. He followed that disgrace with equal disdain for justice and human rights, chiming his support for the rogue Jewish State’s obliteration of its neighbour Lebanon this summer. In that instance, Ottawa disregards entirely the criminality of Israel and its masters in Washington, even if it means, as was witnessed in Lebanon, leaving the wanton murder of Canadian citizens unchallenged.
With Afghanistan coming daily to look more and more like Canada’s “Iraq,” combined with Canadian’s long wariness of American imperial aims on this continent and abroad, Stephen Harper is set to inherit the collective backlash of more than a half-decade of wars and occupations just gone by and still going nowhere. Should there be another election, an early winter election, a second winter election in a row, Stephen Harper will find he and his band of diminutive Bushist Republicans vying for re-election on a war and security platform, hoping to sell Canadians on the American prescription that to any but the most determinedly uninformed is clearly a recipe for disaster. And this for Harper, already a little short of originality in his public pronouncements, means standing in front of the Canadian public, as the flagged-coffin ceremonies carry on in the background, repeating word for word George W. Bush’s worn scripts, carefully including all the right “stay the course” platitudes and other too-familiar banalities.
Despite this, Harper seems intent on forcing an early December election, perhaps hoping to shelter the campaign in the shadows of the looming U.S. mid-term elections. The tool to bring this about is a little piece of legislation, introduced in the house, that is so odious the opposition can’t allow it to pass into law. Should Harper take his Clean Air Act to the floor for a vote the opposition must call for a vote of non-confidence, and he and his neophyte colleagues will be finished.
Admitting the political course charted from the Potomac is a proven disaster being something yet beyond imagining in Harper’s Ottawa circles (that obvious and inevitable acceptance pending at some future time) Stephen “Steve” Harper’s enthusiasm for Canada’s engagement in more wars and occupations as directed remains exuberant. As does his ardour for other made in America policies.
Perhaps reflecting his political initiation in Alberta, Harper’s Conservatives are proving as environmentally regressive as their Texan brethren. Under Harper, the new government of Canada has dithered on the old government’s Kyoto commitments, and now seems ready to ditch it entirely. This week, Harper’s presentation of the Clean Air Act confirms it, as with its namesake legislation in the United States, does nothing to address Canada’s contribution to global climate heating, or diminish our massive, and growing levels of CO2 gas emissions. Environmental critics, most notable the prestigious David Suzuki Foundation, blast the act as being, at best, little more than a stalling tactic meant to keep meaningful environmental action on the backburner for another five years. It is in fact legislation so blatantly hypocritical, and ineffectual, parties hoping to bolster their green credentials cannot afford to hold their collective nose and allow it passage.
This is Harper’s gamble: Ram through an energy sector-friendly, anti-environmental package now, while the rival Liberal’s are consumed in a leadership contest that’s becoming nastier by the day, daring them to force an environmental election. But, there’s more smelling about Stephen Harper’s project than just a bad air act.
While Canadians face the prospect of being treated to scientific side-show of an election, the third strike against the nation’s integrity is unfolding in the background. The transformation of Canada’s judiciary has carried on, with little comment from either the press, or the opposition. Most worryingly is the Conservative’s proposed adoption of a “three strike” provision, as in America, that allows endless incarceration for crimes that would otherwise not merit a life sentence. The enactment of three strike laws in the United States has proven a large contributor to that incarceration-crazy country’s burgeoning prison/slave population. Stephen Harper will argue from the stump that Canada needs to import the more draconian American penal measures, precepts and practice to keep us safe. This despite crime trends turning in the opposite direction. It’s an approach guaranteed to balloon the prison system, filling the jails with B.C. potheads, and indigent panhandlers. The subsequently overburdened system will doubtless require privatization.
Just this week past, George W. Bush signed into law the Military Commissions Act, (HR 6616) putting the finishing touch on the disintegration of the rule of law that led the West out of the dark age, birthing first the Enlightenment, then the modern democratic state. The Act legalizes everything done contrary to both U.S. and international law by this administration going back to September 11, 2001, and O.K.’s all it may yet do. It is, in effect the final flourish, a stroking into law the lawlessness practiced by this administration from its beginnings.
Stephen Harper will this winter be made to defend his decisions to repeat America’s crime and punishment failures, ally with the torturers of Maher Arar (and uncounted others), and further enjoin the slaughter of innocents in Afghanistan, while turning a blind eye to the atrocities practiced by his friends in Israel, Britain, Australia, and the of course, America. And, should Canada’s supine pressmen find more nerve than so far demonstrated, Stephen, the enthusiastic defender of the abandonment of the ancient right of Habeas Corpus, and all else undone by Washington, must too answer for his determination to abandon the environment in favour of corporate oligarchs.
Should Harper's fatally flawed "Clean Air Act" bill be presented for a vote in the house, Mr. Harper will certainly follow the short-lived administration of Joe Clark, while gaining a degree of contempt it took Brian Mulroney a decade to nurture.
Chris Cook is a contributing editor to PEJ News, host of the weekly public affairs program, Gorilla Radio, and associate editor for the Atlantic Free Press. You can check out the GR Blog here.
additional source materials:
Globe re: negroponte in Canada:
http://www.theglobeandmail.com/servlet/story/
LAC.20061018.NEGROPONTE18/TPStory/National
Globe re: bad air
http://www.theglobeandmail.com/servlet/ArticleNews/
TPStory/LAC/20061011/IBBITSON11/Columnists/
Columnist?author=John+Ibbitson
Torstar Chantal 3
http://www.thestar.com/NASApp/cs/ContentServer?
pagename=thestar/Layout/Article_Type1&col=
968350116795&c=Article&cid=
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Sunday, October 15, 2006
Climbing Rates Shock Private Elec Customers
Competitive Era Fails to Shrink Electric Bills
New York Times
By DAVID CAY JOHNSTON
Published: October 15, 2006
A decade after competition was introduced in their industries,
long-distance phone rates had fallen by half, air fares by more than a
fourth and trucking rates by a fourth. But a decade after the federal
government opened the business of generating electricity to competition,
the market has produced no such decline.
Instead, more rate increase requests are pending now than ever before,
said Jim Owen, a spokesman for the Edison Electric Institute, the
association for the investor-owned utilities that provide about 60
percent of the nation’s power. The investor-owned electric utility
industry published a June report entitled “Why Are Electricity Prices
Increasing?”
About 40 percent of all electricity customers — those in 23 states and
the District of Columbia where new competition was approved — mostly
paid modestly lower prices over the past decade. But those savings were
primarily because states, which continue to have some rate-setting
power, imposed cuts, freezes and caps at the behest of consumer groups
that wanted to insulate customers from any initial price swings.
The last of those rate protections expire next year, and the Federal
Energy Regulatory Commission and other federal agencies warn in a draft
report to Congress that “customers may experience rate shock” as
utilities seek to make up for revenue they did not collect during the
period of artificially reduced prices and to cover higher costs of fuel.
They warned that “this rate shock can create public pressure” to turn
back from electricity prices set by the market to prices set by
government regulators.
The disappointing results stem in good part from the fact that a
genuinely competitive market for electricity production has not developed.
Concerned about rising prices, California and five other states have
suspended or delayed transition to the competitive system.
And voters around two California cities, Sacramento and Davis, will
decide next month whether to replace investor-owned utilities with
municipal power in hopes of lowering rates. Drives are under way to
expand public power in Massachusetts. In Portland, Ore., the city
council tried and failed to buy the local utility company.
Electric customers in other states are facing rude surprises.
In Baltimore, an expected 72 percent rate increase in electricity prices
has aroused so much protest that the state legislature met in special
session, where it arranged to phase in the higher costs over several
years. In Illinois, rates are about to rise as much as 55 percent.
The three New York area states opened their electricity markets to
competition, with different results.
In Connecticut, residential electric rates rose up to 27 percent last
year to an average of $128 a month, and are expected to go up as much as
50 percent more in January.
In New Jersey, rates rose up to 13 percent this year, and are poised to
go much higher.
New York residential customers, by contrast, paid an inflation-adjusted
average of 16 percent less in 2004 than in 1996, a state report said. It
is not known how much of that is attributable to government-ordered rate
cuts, but the state benefited from huge increases in power generated by
its nuclear plants and by buying power from New England plants that,
starting next year, may have less electricity to sell to New York.
The Federal Energy Regulatory Commission and five other agencies, in the
draft of the report to Congress, are unable to specify any overall
savings. “It has been difficult,” the report states, “to determine
whether retail prices” in the states that opened to competition “are
higher or lower than they otherwise would have been” under the old system.
Joseph T. Kelliher, the commission chairman, said Friday that eventually
“market discipline will deliver the best prices” and noted that every
administration and Congress since 1978 had pushed the industry toward
competition. He added that the commission recognized a need for
“constant reform of the rules.”
Under the old system, regulated utilities generated electricity and
distributed it to customers. Under the new system, many regulated
utilities only deliver power, which they buy from competing producers
whose prices are not regulated. For example, Consolidated Edison, which
serves the New York City area, once produced almost all the power it
delivered; now it must buy virtually all its electricity from companies
that bought its power plants and from other independent generators.
The goal is for producers to compete to offer electricity at the lowest
price, savings customers money.
Independent power producers, free-market economists and the Clinton
Administration cheered in 1996 when the federal government allowed
states to adopt the new system. The new rules “will benefit the industry
and consumers to the tune of billions of dollars every year,” Elizabeth
A. Moler, then chairwoman of FERC, said at the time. She said the new
rules would “accelerate competition and bring lower prices and more
choices to energy customers.”
But that has not happened. A truly competitive market has never
developed, and, in most areas, the number of power producers is small.
In New Jersey, for example, only six companies produce power, and not
all of them sell to every utility.
Some utilities have decided to buy electricity not from the cheapest
supplier but from one owned by a sister to the utility company, even if
that electricity is more expensive. That has been the case in Ohio.
And if electricity is needed from more than one producer, utilities pay
each one the highest price accepted in the bidding, not the lowest. This
one-price system, adopted by the industry and approved by the federal
government, is intended to encourage investment in new power plants,
which are costlier than older ones.
But critics say that, as in California five years ago in a scandal that
enveloped Enron, the auction system can be manipulated to drive up
prices, with the increases passed on to customers. What is more,
companies that produce electricity can withhold it or limit production
even when demand is at its highest, lifting prices. This happened in
California, and the federal commission has found that it occurred in a
few more instances since then. Critics say that more subtle techniques
to reduce the supply of power are common and that the commission shows
little interest in investigating.
Bryan Lee, a FERC spokesman, said complaints of manipulation are
investigated, but only last year did Congress give the commission the
legal tools to punish manipulators.
Under the new system there have been some big winners — including
Goldman Sachs and the Carlyle Group, the private equity firm — that
figured out that there were huge profits to be made in one area of the
new system.
Such investors have in some cases resold power plants they just bought,
making a large profit. In other cases, investors have bought power
plants from the utilities at what proved to be bargain prices, then sold
the electricity back at much higher prices than it would have cost the
utility to generate the electricity.
Richard Blumenthal, the Connecticut attorney general, said the
supposedly competitive market has been “a complete failure and colossal
waste of time and money.”
He asked the federal commission to revoke competitive pricing in his
state, but the commission dismissed the complaint last Wednesday, saying
the state had not proved its case.
Advocates of moving to the new system say that, in time, the discipline
of the competitive market will mean the best possible prices for
customers. Alfred E. Kahn, the Cornell University economist who led the
fight to deregulate airlines and who, as New York’s chief utility
regulator in the 1970’s, nudged electric utilities toward the new
system, said that he was not troubled by the uneven results so far.
“Change,” Professor Kahn said, “is always messy.”
But some advocates of introducing competition to the electric industry
have soured on the idea. They include the Cato Institute, a leading
promoter of libertarian thought that favors the least possible
regulation and that concluded earlier this year that government and
electric utilities have made such hash of the new system that the whole
effort should be scrapped.
“We recommend total abandonment of restructuring,” Cato said. If the
public rejects a greater embrace of markets, Cato wrote, the next best
choice would be a “return to an updated version of the old” system.
The conflicting results among the many studies of electric prices stand
in contrast to the sharp, unambiguous drops in the prices of telephone
calls, air travel and trucking.
One study by the utility economist Mark L. Fagan, a senior fellow at the
Kennedy School of Government at Harvard and a consultant to various
businesses who favors a competitive system, found that the new system
often produces better results. He found that in 12 of 18 states that
restructured, prices were lower for industrial customers than they would
have been under the old system. But he also found that prices were
somewhat lower than his model predicted in seven of 27 states that did
not open to competition.
In Virginia, a state that did not move to the new system, a report last
month by the agency that regulates utilities found “no discernible
benefit” to customers in the 16 states that had gone the farthest and
warned that electricity prices in those states “may actually be
increasing faster than for customers in states that did not restructure.”
And Professor Jay Apt, a former astronaut who runs the electricity study
center at Carnegie-Mellon University, found that savings from
introducing competition to sales of electricity to large industrial
customers “are so small that they are not meaningful.”
Regardless of the debate over the effectiveness of the new system,
electricity prices are expected to rise in the next few years for
several reasons apart from any rise in the price of coal, natural gas,
oil, uranium and other fuels.
A study issued in June by the Edison Foundation, which represents
investor-owned utilities concluded that utilities would have to raise
rates to upgrade local distribution systems and to finance long-distance
transmission lines, as well as for new power plants. The study found
that utility profit margins had thinned and financial strength had
weakened. It called for relief in the form of higher rates.
New York Times
By DAVID CAY JOHNSTON
Published: October 15, 2006
A decade after competition was introduced in their industries,
long-distance phone rates had fallen by half, air fares by more than a
fourth and trucking rates by a fourth. But a decade after the federal
government opened the business of generating electricity to competition,
the market has produced no such decline.
Instead, more rate increase requests are pending now than ever before,
said Jim Owen, a spokesman for the Edison Electric Institute, the
association for the investor-owned utilities that provide about 60
percent of the nation’s power. The investor-owned electric utility
industry published a June report entitled “Why Are Electricity Prices
Increasing?”
About 40 percent of all electricity customers — those in 23 states and
the District of Columbia where new competition was approved — mostly
paid modestly lower prices over the past decade. But those savings were
primarily because states, which continue to have some rate-setting
power, imposed cuts, freezes and caps at the behest of consumer groups
that wanted to insulate customers from any initial price swings.
The last of those rate protections expire next year, and the Federal
Energy Regulatory Commission and other federal agencies warn in a draft
report to Congress that “customers may experience rate shock” as
utilities seek to make up for revenue they did not collect during the
period of artificially reduced prices and to cover higher costs of fuel.
They warned that “this rate shock can create public pressure” to turn
back from electricity prices set by the market to prices set by
government regulators.
The disappointing results stem in good part from the fact that a
genuinely competitive market for electricity production has not developed.
Concerned about rising prices, California and five other states have
suspended or delayed transition to the competitive system.
And voters around two California cities, Sacramento and Davis, will
decide next month whether to replace investor-owned utilities with
municipal power in hopes of lowering rates. Drives are under way to
expand public power in Massachusetts. In Portland, Ore., the city
council tried and failed to buy the local utility company.
Electric customers in other states are facing rude surprises.
In Baltimore, an expected 72 percent rate increase in electricity prices
has aroused so much protest that the state legislature met in special
session, where it arranged to phase in the higher costs over several
years. In Illinois, rates are about to rise as much as 55 percent.
The three New York area states opened their electricity markets to
competition, with different results.
In Connecticut, residential electric rates rose up to 27 percent last
year to an average of $128 a month, and are expected to go up as much as
50 percent more in January.
In New Jersey, rates rose up to 13 percent this year, and are poised to
go much higher.
New York residential customers, by contrast, paid an inflation-adjusted
average of 16 percent less in 2004 than in 1996, a state report said. It
is not known how much of that is attributable to government-ordered rate
cuts, but the state benefited from huge increases in power generated by
its nuclear plants and by buying power from New England plants that,
starting next year, may have less electricity to sell to New York.
The Federal Energy Regulatory Commission and five other agencies, in the
draft of the report to Congress, are unable to specify any overall
savings. “It has been difficult,” the report states, “to determine
whether retail prices” in the states that opened to competition “are
higher or lower than they otherwise would have been” under the old system.
Joseph T. Kelliher, the commission chairman, said Friday that eventually
“market discipline will deliver the best prices” and noted that every
administration and Congress since 1978 had pushed the industry toward
competition. He added that the commission recognized a need for
“constant reform of the rules.”
Under the old system, regulated utilities generated electricity and
distributed it to customers. Under the new system, many regulated
utilities only deliver power, which they buy from competing producers
whose prices are not regulated. For example, Consolidated Edison, which
serves the New York City area, once produced almost all the power it
delivered; now it must buy virtually all its electricity from companies
that bought its power plants and from other independent generators.
The goal is for producers to compete to offer electricity at the lowest
price, savings customers money.
Independent power producers, free-market economists and the Clinton
Administration cheered in 1996 when the federal government allowed
states to adopt the new system. The new rules “will benefit the industry
and consumers to the tune of billions of dollars every year,” Elizabeth
A. Moler, then chairwoman of FERC, said at the time. She said the new
rules would “accelerate competition and bring lower prices and more
choices to energy customers.”
But that has not happened. A truly competitive market has never
developed, and, in most areas, the number of power producers is small.
In New Jersey, for example, only six companies produce power, and not
all of them sell to every utility.
Some utilities have decided to buy electricity not from the cheapest
supplier but from one owned by a sister to the utility company, even if
that electricity is more expensive. That has been the case in Ohio.
And if electricity is needed from more than one producer, utilities pay
each one the highest price accepted in the bidding, not the lowest. This
one-price system, adopted by the industry and approved by the federal
government, is intended to encourage investment in new power plants,
which are costlier than older ones.
But critics say that, as in California five years ago in a scandal that
enveloped Enron, the auction system can be manipulated to drive up
prices, with the increases passed on to customers. What is more,
companies that produce electricity can withhold it or limit production
even when demand is at its highest, lifting prices. This happened in
California, and the federal commission has found that it occurred in a
few more instances since then. Critics say that more subtle techniques
to reduce the supply of power are common and that the commission shows
little interest in investigating.
Bryan Lee, a FERC spokesman, said complaints of manipulation are
investigated, but only last year did Congress give the commission the
legal tools to punish manipulators.
Under the new system there have been some big winners — including
Goldman Sachs and the Carlyle Group, the private equity firm — that
figured out that there were huge profits to be made in one area of the
new system.
Such investors have in some cases resold power plants they just bought,
making a large profit. In other cases, investors have bought power
plants from the utilities at what proved to be bargain prices, then sold
the electricity back at much higher prices than it would have cost the
utility to generate the electricity.
Richard Blumenthal, the Connecticut attorney general, said the
supposedly competitive market has been “a complete failure and colossal
waste of time and money.”
He asked the federal commission to revoke competitive pricing in his
state, but the commission dismissed the complaint last Wednesday, saying
the state had not proved its case.
Advocates of moving to the new system say that, in time, the discipline
of the competitive market will mean the best possible prices for
customers. Alfred E. Kahn, the Cornell University economist who led the
fight to deregulate airlines and who, as New York’s chief utility
regulator in the 1970’s, nudged electric utilities toward the new
system, said that he was not troubled by the uneven results so far.
“Change,” Professor Kahn said, “is always messy.”
But some advocates of introducing competition to the electric industry
have soured on the idea. They include the Cato Institute, a leading
promoter of libertarian thought that favors the least possible
regulation and that concluded earlier this year that government and
electric utilities have made such hash of the new system that the whole
effort should be scrapped.
“We recommend total abandonment of restructuring,” Cato said. If the
public rejects a greater embrace of markets, Cato wrote, the next best
choice would be a “return to an updated version of the old” system.
The conflicting results among the many studies of electric prices stand
in contrast to the sharp, unambiguous drops in the prices of telephone
calls, air travel and trucking.
One study by the utility economist Mark L. Fagan, a senior fellow at the
Kennedy School of Government at Harvard and a consultant to various
businesses who favors a competitive system, found that the new system
often produces better results. He found that in 12 of 18 states that
restructured, prices were lower for industrial customers than they would
have been under the old system. But he also found that prices were
somewhat lower than his model predicted in seven of 27 states that did
not open to competition.
In Virginia, a state that did not move to the new system, a report last
month by the agency that regulates utilities found “no discernible
benefit” to customers in the 16 states that had gone the farthest and
warned that electricity prices in those states “may actually be
increasing faster than for customers in states that did not restructure.”
And Professor Jay Apt, a former astronaut who runs the electricity study
center at Carnegie-Mellon University, found that savings from
introducing competition to sales of electricity to large industrial
customers “are so small that they are not meaningful.”
Regardless of the debate over the effectiveness of the new system,
electricity prices are expected to rise in the next few years for
several reasons apart from any rise in the price of coal, natural gas,
oil, uranium and other fuels.
A study issued in June by the Edison Foundation, which represents
investor-owned utilities concluded that utilities would have to raise
rates to upgrade local distribution systems and to finance long-distance
transmission lines, as well as for new power plants. The study found
that utility profit margins had thinned and financial strength had
weakened. It called for relief in the form of higher rates.
Gorilla Radio for Monday, October 16, 2006
PEJ News - C. L. Cook - This week on GR: Veteran for peace, Mike Ferner and reports from inside Iraq's Red Zone. Tom Rankin and the hijacking of B.C. Hydro. And; Janine Bandcroft brings us up to speed with all that's good to do in and around Victoria this week.
Chris Cook hosts Gorilla Radio, airing live every Monday, 5-6pm Pacific Time. In Victoria at 101.9FM, 104.3 cable, and on the internet at: http://cfuv.uvic.ca He also serves as a contributing editor at the progressive web news site: http://www.pej.org. You can check out the GR blog at: http://GorillaRadioBlog.blogspot.com
www.PEJ.org
www.PEJ.org
Gorilla Radio for Monday,
October 16, 2006
C. L. Cook
PEJ Radio
Ocotober 15, 2006
Who could have known? Who could have foreseen the disaster Iraq would become before the missiles and bombs fell, before the shock and awe?
The millions marching in the streets of towns and cities across the world knew. Movie stars and lesser artists and political celebrities who were ridiculed and refused air time knew. The myriad organizations, both established and hurriedly cobbled against the impeding attack knew. And, the men who planned and executed this horror knew they would profit it.
More than three and a half years on, and the situation in Iraq is worse now than ever. Mike Ferner is an American peace activist, freelance journalist, and author of the book, ‘Inside the Red Zone: A Veteran for Peace Reports from Iraq.’
Mike Ferner in the first half.
And; Memories of the greatest rip-off perpetrated against the public weal of the young 21st have faded in light of George W. Bush’s titanic criminality since, but British Colombian’s forget the Enron electricity market scam at their peril.
Though George Bush’s ‘Kenny Boy’ Lay may rest in peace, while his lieutenants in the looting spree of California and beyond call cells home, privatized power is still with us, and as then it is casting a greedy eye to B.C.’s market and generating capacity.
Tom Rankin is one British Colombian not prepared to stand by as Premier Campbell and his privateers take the continent’s best run public utility out of the people’s hands.
Tom Rankin and stopping the Hydro hijacking in the second half.
And; Janine Bandcroft will be here at the bottom of the hour to bring us up to speed with some of the groovy things to do in and around Victoria this week.
G-Radio is dedicated to social justice, the environment, community, and providing a forum for people and issues not covered in the corporate media.
Some past guests include: M. Junaid Alam, M. Shahid Alam, Joel Bakan, Maude Barlow, David Barsamian, William Blum, Luciana Bohne, William Bowles, Vincent Bugliosi, Helen Caldicott, Noam Chomsky, Michel Chossudovsky, Diane Christian, Juan Cole, David Cromwell, Murray Dobbin, Jon Elmer, Reese Erlich, Anthony Fenton, Jim Fetzer, Laura Flanders, Chris Floyd, Connie Fogal, Susan George, Stan Goff, Robert Greenwald, Denis Halliday, Chris Hedges, Sander Hicks, Julia Butterfly Hill, Robert Jensen, Dahr Jamail, Diana Johnstone, Kathy Kelly, Naomi Klein, Anthony Lappe, Frances Moore Lappe, Jason Leopold, Jeff Leys, Dave Lindorff, Jim Lobe, Jennifer Loewenstein, Wayne Madsen, Stephen Marshall, Linda McQuaig, George Monbiot, Loretta Napoleoni, John Nichols, Kurt Nimmo, David Orchard, Greg Palast, Mike Palecek, Michael Parenti, Robert Parry, Kevin Pina, William Rivers Pitt, Justin Podur, Jack Random, Sheldon Rampton, Paul Craig Roberts, Paul de Rooij, John Ross, Danny Schechter, Vandana Shiva, Norman Solomon, Starhawk, Grant Wakefield, Paul Watson, Bernard Weiner, Mickey Z., Dave Zirin, and many others.
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