Posted on 05/30/2002 11:26:14 PM PDT by kattracks
Mr. Ackerman described the lawsuits by Mr. Lockyer as "frivolous" and politically motivated, saying that the attorney general had failed to produce "anything to back up" the accusations he has made.But the children? What about California's children? Can those greedy corporate executives produce "anything to back up" their ravenous appetites for the blood of California's working families?
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Basically, yes.
Long ago, El Paso entered into contracts with customers outside of California to deliver as much as gas they ever needed on the pipeline, and whatever was left over was available for California. That wasn't a problem, because California wasn't using that much.
Now, California demand has soared and it was getting disproportionately hurt. Because FERC retains regulatory authority over these interstate pipelines, it found that this was "unjust and unreasonable", which is the finding necessary to order changes.
El Paso doesn't care. It probably welcomes the chance to renegotiate contracts in a tight market. If anything, they'll make more profit. It's California's neighbors who are getting screwed, but that's what happens when we give the government the power to interfere with the market.
In a free market, of course, market forces would have already reacted to build a new pipeline into California to serve demand, but regulatory roadblocks have slowed that. El Paso still would like to build more capacity, and will if the politicians and bureaucrats get out of the way.
I had always understood that the U.S. Constitution gave congress the power to "regulate Commerce ...among the several States" in order to prevent one state from dealing unfairly with another - punitive tariffs at the border and that sort of thing.
Furthermore, Article I, Section 8 requires that "...all Duties, Imposts and Excises shall be uniform throughout the United States;" to prevent the federal govenment itself from favoring one state over another.
Now it seems that we have the feds doing exactly that: Favoring California over New Mexico and Arizona, and "impairing the Obligation of Contracts" to boot.
You probably know better than I whether El Paso will object to this or not, but it seems that they have several constitutional grounds for fighting this if they choose.
Natural gas has been deregulated for years. Are you suggesting it's just as phony as all the other "deregulation" scams?
El Paso already issued a statement saying that they support the decision, which is why I speculated that they would like to renegotiate these contracts in today's environment.
It's the utilities in New Mexico and Arizona who have the beef. Their good-faith contracts just got ripped up by the Feds.
The constitutional objections you mentioned have been raised in previous cases and rejected. The Court has held that this is a valid exercise of the authority granted by the Commerce Clause, and that FERC can do this.
We are starting to see some chipping away by the Court on that broad power, but it's only at the edges so far. Someday, if Bush is permitted to restock the Supreme Court with strict constructionists, I think this power will be taken away entirely. Then, perhaps, FERC will follow the Civil Aeronautics Board into the trashbin of history, and the free market, contract, and property rights will be restored to their rightful positions.
Natural gas prices have been deregulated for years, not interstate transportation of it. It's only "phony" if you don't understand the facts.
Apparently Mr. Ackerman is describing this bogus grandstanding lawsuit as if it is uncharacteristic of the California AG. It seems that he is unfamiliar with Mr. Lockyer, who is incapable of any other kind of legal action.
The elements of the strom that seem to be lining up include: (1) an election year where hard choices will be avoided if at all possible; (2) a clear budget deficit that is getting worse by the hour; (3) a recent court decision that says the state should pay federal minimum wages if it doesn't get a budget passed to state public employees; (4) a Governor proposed budget that is based on borrowing and expectations for large amounts of help from the federal government; (5) various democratic party leaders within the state government refusing to honor contracts and threatening all kinds of litigation, the result of which is making business unsure if California can be a good business partner; (6) an out-of-control Governor who appears to be shaking down anybody and everybody from teacher groups, to students, to folks contracting with the state for election campaign money; (7) Bond rating agencies that after the Merril-Lynch decision are concerned that their public pronouncements on credit-worthyness had better match their internal e-mails; (8) a financial plan to pay off borrowing that has not seen the light of day and is probably false to begin with.
Yes, this may be the perfect financial cash-flow storm building in California.
EXCELLENT INSIGHTS RE: 5) various democratic party leaders within the state government refusing to honor contracts and threatening all kinds of litigation, the result of which is making business unsure if California can be a good business partner;
This I gotta see.
AND (6) an out-of-control Governor who appears to be shaking down anybody and everybody from teacher groups, to students, to folks contracting with the state for election campaign money;
Amen.
Yea, that's what I thought, it's another phony deregulation.
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