Statement of Charlie Higley

Senior Policy Analyst

Public Citizen’sCritical Mass Energy Project

August 7, 1997

For decades electric utilities reaped fat profits fromover-priced power plants. Now, with competition threatening themoney harvest, the utility lobby is spending millions of dollarsin campaign contributions to buy the vote of state and federallawmakers. The word has come down from a new legion of robberbarons: "Bail out our bad assets."

Forcing consumers to bail out the utilities for their badinvestments in nuclear and coal-fired power plants will keep ourrates high, stifle competition and pollute the environment.Utilities made these bad investments. They should eat theirloses, not the consumer.

Instead of bailing out over-priced power plants, they shouldbe shut down and replaced with renewable energy resources--suchas wind, solar, biomass and geothermal plants--along with a newcommitment to energy efficiency, the cheapest, cleanest way to"produce" electricity.

Bailing out power plants that would otherwise have to be shutdown will stifle competition. New or smaller companies will notbe able to compete against giant utilities receiving billions ofdollars in taxpayer and consumer subsidies.

The utility bailout also endangers the environment. The mostun-economic power plants are often the most polluting--spewingmillions of tons of toxic pollution and greenhouse gases into theair and leaving a legacy of nuclear wastes that will remaindeadly for thousands of years.

Utilities receiving a bailout will fight against energyefficiency and renewable energy, which directly compete with theexisting fleet of polluting fossil fuel and nuclear power plants.

A grassroots backlash against the bailout is already startingto build in California, Massachusetts and other states. PublicCitizen’s founder Ralph Nader, along with leading consumergroups, recently launched a campaign called "CUT" --Californians against Utility Taxes" -- to oppose the utilitybailout in the Golden State. In Massachusetts, Public Citizen andallied organizations are working with sympathetic lawmakers toheed the concerns of consumers to drastically limit the utilitybailout. Similar efforts are underway in Pennsylvania, Texas, andother states.

So the question is, do we as consumers want to bail out theutilities for their bad investments in dirty power plants? Or, dowe want to stop throwing good money after bad, shut down thesepower plants and invest in clean, renewable technologies andenergy efficiency? To Public Citizen and our allies, the answeris clear: "Stop the Bailout!"

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(For more information contact Charlie Higleyat 202-546-4996 or higley@citizen.org)

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Public Citizen is a national non-profit consumer advocacyorganization founded by Ralph Nader in 1971. The Critical MassEnergy Project is Public Citizen’s energy policy arm,working to decrease reliance on nuclear and fossil fuels and topromote safe, affordable and environmentally-sound energyalternatives.