The Big Cheat by David Cay Johnston

Author:David Cay Johnston
Language: eng
Format: epub
Publisher: Simon & Schuster
Published: 2021-11-16T00:00:00+00:00

— 14 — Expensive Juice

Trump and his team tried to enrich many industries, especially fossil fuel companies, usually in ways that inflated profits at the expense of the American people. But there is one industry that showcases all of these plans, an industry that touches every one of us: electricity.

On his first business day as president, Trump sent a clear signal to Wall Street about how his policies would affect hundreds of billions of dollars in annual spending by consumers, business, and industry for electricity. No major news organization covered Trump’s action and what it meant, only DCReport.

Candidate Trump had told voters that Wall Street and other elites had made Washington a swamp and he would drain it. But he gave Wall Street electricity investors a green light to gouge customers by manipulating the so-called electricity markets.

Trump first forced the ouster of Norman C. Bay as chairman of the Federal Energy Regulatory Commission (FERC), a tiny but immensely powerful federal agency. Bay had been the U.S. attorney in New Mexico. At FERC he had been its chief of enforcement. When he was named to the commission he favored strong enforcement of the rules against market manipulations. The industry challenged Bay in federal courts and lost.

Trump initially replaced Bay with Cheryl LaFleur, a former electricity company chief executive. LaFleur had a solid track record as a sightless sheriff, blind to blatant price manipulations by Wall Street firms, especially in New England. A few months later Trump replaced her with lawyer Neil Chatterjee, who had been the energy policy aide of Senator Mitch McConnell. FERC quickly developed a love for what Trump liked to call “beautiful coal,” a policy that helped endear McConnell to his Bluegrass State voters.

These were the first of many decisions involving electricity in which Trump and his team favored Wall Street and coal companies and other fossil fuel interests over the people. Raising electricity prices while increasing pollution became consistent Trump administration policies that almost never made the news.

Paying more for juice hurts families. It also damages the profits of factories that are big users of electricity as well as convenience stores that must refrigerate foods. Buyers of hotels and office buildings take the local cost of electricity into account in making offers for real estate. Charging factories more for power makes American manufactured goods less competitive in global markets, contradicting Trump’s promise to increase exports of manufactured goods.

Electricity defines modern life. Only because we have mastered electrons and built millions of miles of copper wires to carry them wherever we choose do we enjoy automobiles and elevators, jetliners and air conditioning, cell phones and computers.

Electricity is so wired into our lives and minds that we don’t give it a thought until the neighborhood goes dark or, as happened in Texas in the winter of 2021, the new electricity markets produce $16,000 bills for a household for a single month.

Each year America generates about 4 trillion kilowatt hours of electricity. With that kind of volume the slightest change in prices has a huge impact on whose wallets thin and whose fatten.

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