SUPERVISOR DIANNE JACOB
DATE: January 9, 2001
CONTACT STEVE SCHMIDT AT 619-531-4766 or 619-206-9108
JACOB SEEKS WINDFALL PROFITS TAX TO CURB POWER PROFITEERING
Dismayed that a plan by California Governor Gray Davis exercises no immediate control over the state's soaring wholesale energy prices, County of San Diego Supervisor Dianne Jacob announced today she would seek a windfall profits tax on unregulated power generators operating in California.
"Right now, the San Diego region's largest utility is $500 million dollars in debt and businesses not protected by the rate cap are struggling to pay exorbitant electricity bills," Jacob said. "The Davis plan is flawed because it does nothing to stop the generators from charging their unconscionable prices minute by minute," Jacob said.
Jacob, a long-time advocate of a regionally-owned and operated energy facility, said that in order to head-off a regional economic breakdown in the coming months, the price of wholesale power should be determined by the cost of production coupled with a fair profit margin.
She said the state should then seek to recoup unfair proceeds made by power generators above the established production-based price.
"These are generators who've turned profits of 100 percent, 300 percent, and even 900 percent over their earnings this time last year," Jacob said. "The only way to fight the greed of the generators is to go after their unjust profits," she said.
Jacob testified before the Federal Energy Regulator Commission in October decrying the profiteering of eleven power-producing companines. Most recently, she lobbied the nation's top energy official, Energy Secretary Bill Richardson, to lower price of wholesale power.
I will not stand by as ratepayers are asked to pick up the tab for the state's deregulation mistakes," Jacob said. "It is the generators who are bilking the state out of billions of dollars and it is the generators who should feel the burn," she said.