News Release

Wall St. Gouging Billions on Electric Bills

DAVID CAY JOHNSTON, davidcay at me.com, @DavidCayJ
A Pulitzer Prize-winning investigative reporter formerly with The New York Times, David Cay Johnston is the founder of DCReport.org and just wrote the piece “Reason Blackout At D.C. Appeals Court.”

He writes: “New England electricity prices were inflated by up to $2.4 billion last year, a July 25 ruling by a federal appeals court confirms, but the court did not order any money returned to customers.

“The U.S. Court of Appeals for the D.C. Circuit also held that it cannot correct two additional years of manipulations, which cost electricity customers about $1.4 billion more, because of a legal technicality. That technicality? Judith W. Rogers, the presiding judge, created it, as we will explain [in the full article]. She could easily correct it — if she cares to.

“Consistent with actions by the Trump Administration, the federal appeals court in Washington sent a clear signal to those who manipulate the so-called electricity markets that they are pretty much free to gouge customers without worrying that they will be forced to disgorge their ill-got gains, much less pay penalties.

“When the federal judiciary turns its backs on substantial complaints of government-approved price gouging — a fancy word for theft — what hope do ordinary Americans have that our government will protect them from any bandits armed with ink pens, spreadsheets and complex financial contracts?

“At issue is the purchase of 17 electricity generating plants in 2014 by five former Wall Street energy traders. The buyers abruptly withdrew the largest power plant from the market, causing a spike in electricity prices by significantly reducing generating capacity.

“Last year, this year and next year, customers will pay up to $3.8 billion extra because that power plant, known as Brayton Point, shut down. That’s roughly $1,000 taken from each American family of four through market manipulation.

“The court ruling matters far beyond New England.

“By our reading, the Federal Circuit is, yet again, not applying settled law, but instead looking for ways to escape the admittedly tedious complexities of energy regulatory law. That certainly makes life more convenient for jurists, but it damages Americans and our economy.

“The court decision comes after Donald Trump, on his first working day in the White House, signaled Wall Streeters who manipulate the price of electricity that he has their backs. As we reported at the time, Trump appointed a sightless sheriff to chair the Federal Energy Regulatory Commission (FERC).

“We reported in February 2017 that ‘the Trump administration has made its first move to raise electricity and other utility prices, actions that will cost families while pleasing the Wall Street traders whose manipulations of those markets will now be much easier.’

“It was the first of what are now many official acts that directly contradict Trump’s campaign promise to drain the swamp in Washington and his inaugural address pledge to stand up for the Forgotten Man. Trump later appointed two more FERC commissioners known for siding with industry against consumers, one of whom said Americans who challenge utility regulators are waging ‘jihad.’

“This is an ongoing story that we have reported on since, unlike most of the mainstream news media.”