[Congressional Record Volume 147, Number 9 (Wednesday, January 24, 2001)]
[Senate]
[Page S548]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. BOXER:
  S. 173. A bill to amend the Internal Revenue Code of 1986 to impose a 
windfall profits adjustment on the production of domestic electricity 
and to use the resulting revenues to fund rebates for individual and 
business electricity consumers; to the Committee on Finance.
  Mrs. BOXER. Mr. President, earlier this week I introduced a bill to 
require the Federal Energy Regulatory Commission to establish a Western 
Regional Rate Cap for the sale of electricity. This is a key component 
to bringing stability to the electricity market and an important step 
in solving California's electricity problems.
  Today, I am introducing the second in a series of bills to deal with 
this matter. The Consumer Utilities Turnback, CUT, Trust Fund Act would 
impose a windfall profits tax on electricity generators, with the 
revenues from the tax going into a Trust Fund to provide rebates to 
consumers.
  Between the second quarter of 1999 and the second quarter of 2000, 
the overall net income for electricity producers based outside of 
California who sell to California increased 333 percent. Let me also 
mention a couple of specific companies. These figures compare the net 
income of the first three quarters of 1999 with the net income of the 
first three quarters of 2000. For NRG Energy Inc., it was a 386 percent 
increase. For the AES Corporation, it was a 262 percent increase. And 
for Dynegy Inc., the increase was 269 percent.
  While profits for producers are reaching record levels, consumers are 
being hit with higher prices. Recent action by the state's Public 
Utility Commission has resulted in increases in consumer electricity 
bills from 7 to 15 percent. While this action was done to help the 
state's utility companies in meeting the wholesale electricity costs, 
it means that consumers and businesses are shouldering the burden of 
the windfall profits being made by the generating companies.
  As I mentioned, the CUT Act would impose a windfall profits tax on 
electricity generators. Each year, the Federal Energy Regulatory 
Commission, FERC, would calculate the average level of ``reasonable 
profit'' determined by state Public Utility Commissions in states in 
which such a determination is made. Any profit above this average level 
would be windfall profit and would be subject to a 100 percent windfall 
profits tax.
  The monies raised from the tax would be placed in the CUT Trust Fund 
in order to provide rebates to consumers. Governors could request that 
FERC provide rebates for consumers and businesses because of high 
electricity costs. FERC would then be charged with distributing the 
rebates and would be required to provide refunds to consumers each year 
in an amount equal to the revenues of the windfall profits tax.
  Mr. President, this legislation highlights the dramatic difference 
between the burden California consumers are facing and the bountiful 
harvest being reaped by electricity generating companies. In dealing 
with the electricity situation in California, we must always keep this 
in mind.
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