Chicago – The exposé of a $300 million rip-off by Peoples Gas and Enron of residential heating customers has created a storm of anger here. In response, consumer advocates are demanding immediate restoration of gas to 13,000 residents who suffered this winter without heat. At least 13 people have frozen to death.
Researchers for the Citizen’s Utility Board (CUB) discovered the massive looting scheme that occurred during the winter of 2000-2001 when consumers were hit with skyrocketing bills. The Illinois Commerce Commission (ICC) had sought to end a two-year investigation and let Peoples Gas off the hook. But CUB discovered documents on a federal web site that busted the scheme wide open. The city of Chicago, ICC and Attorney General Lisa Madigan have since joined the investigation while Peoples Gas has stonewalled. There is a growing demand to refund customers between $100 million and $330 million and to impose stiff corporate fines.
Bridgeport resident Charles Dirks, 74, has been shut off three times since 2000. “Many have suffered and been made to feel bad. Now we find out it was the gas company behind it. It’s criminal!” said Dirks.
The corporate grand theft, like other Enron rip-offs, occurred through a secret, profit-sharing agreement between the Peoples Energy, the parent of Peoples Gas, and Enron Corp. Peoples Gas deliberately refused to buy natural gas at lower prices in anticipation of winter needs. It then sold its natural gas stocks at low prices to a dummy corporation set up between Peoples Energy and Enron. These stocks were then resold and profits were funneled to Peoples Energy.
Meanwhile Peoples Gas restocked its supplies at radically inflated prices dictated by Enron and Peoples Energy. According to Dave Kolata, CUB director of Policy and Government Affairs, 85 percent of the new stocks were bought from Enron.
“In many cases the gas stocks were never physically moved, just swapped with Enron and then sold back,” sometimes at double the rate, Kolata told the World.
Peoples Energy has now been nailed for lying to the public after claiming they didn’t profit off the transactions. The documents prove Peoples Energy and Enron agreed to divvy up the profits for at least four years. The arrangement was secret because it involved an unregulated affiliate of Peoples Energy, a blatant conflict of interest, said Kolata.
“When Bush said he opposed unholy, illegal marriage, I thought he was talking about the marriage between Enron and Peoples Gas,” said Curly Cohen, director of Affordable Power to the People (APP). The group spearheaded citywide protests in 2000 and has fought for state emergency assistance and to restore service to thousands of residents. “This is murder. People died because they couldn’t pay those bills,” said Cohen. APP is demanding a moratorium on the projected 100,000 shutoffs expected after April 1.
“Corporate profits and public utilities don’t mix,” said Cohen, “We need public ownership of utilities. Heat in the winter and cool in the summer are a right.”
The author can be reached at jbachtell@rednet.org.
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