A coalition of organizations affiliated with consumer advocate Ralph Nader attacked Sen. Alfonse M. D'Amato, R-N.Y., Tuesday for sponsoring a bill it said will create electric utility monopolies, which would gobble up Niagara Mohawk Power Corp. and Rochester Gas & Electric.
The result, it said, will be higher electric rates and poor local service in New York State.
Public Citizen, the Consumer Federation of America and the New York State Public Interest Research Group contended that D'Amato's bill is a reward for more than $1 million in campaign contributions from security and investment firms since 1993, with $117,000 alone from the New York City-based brokerage of Bear Stearns & Co.
D'Amato would repeal the 1935 Public Utility Holding Company Act, which makes the creation of interstate electric companies virtually impossible.
Bear Stearns and other brokerages, D'Amato's critics said, would earn huge commissions from underwriting creation of the new utility monopolies that would result from the senator's bill.
The coalition said D'Amato declined to respond to a letter it sent him a month ago about his bill and refused to meet with its members. The group includes the Buffalo Greens, the UB Environmental Task Force (located at the University at Buffalo) and the Western New York Sustainable Energy Coalition.
Jack Kulka, chairman of the Hauppauge Industrial Association Energy Committee on Long Island, who also spoke at the news conference, said Bear Stearns also employs the senator's son, Daniel.
"Al's main priority," Kulka said, "is to raise (campaign) money. What he's doing to repeal PUHCA is similar to the savings and loan scandal, which was triggered when D'Amato was on the (Senate) Banking Committee in the early 1980s. This is nothing more than an attempt by D'Amato to take care of the people who take care of him."
Larry Shapiro, senior attorney for NYPIRG, said D'Amato's bill "is nothing more than a giant favor for Wall Street investment firms."
"They'd make millions from highly profitable bond work resulting from the wave of unregulated mergers and acquisitions among electric utilities that investment firms like Bear Stearns are predicting."
Shapiro quoted a Bear Stearns release to BusinessWire predicting that the "loss of as much as 100 (utility) companies in a relatively short time is bound to create significant winners and losers."
The legislation also has key liberal sponsors, such as the former general chairman of the Democratic National Committee, Sen. Christopher J. Dodd of Connecticut.
Supporters of D'Amato's bill say the public utility act is outdated.
"PUHCA was enacted in 1935, and it's basically a securities measure," said Jim Owen, a spokesman with the Edison Electric Institute, a lobby for the private power companies. "It's not really energy policy."
D'Amato declined to respond to the Nader coalition's or Kulka's complaints directly but said, "This bill has broad bipartisan support because we're confident it will allow more competition and lower prices for ratepayers and serve consumers better."