[Congressional Record Volume 147, Number 41 (Monday, March 26, 2001)]
[House]
[Pages H1119-H1120]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       CALIFORNIA HAS BURNED WHILE FEDERAL GOVERNMENT HAS FIDDLED

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California (Mr. Filner) is recognized for 5 minutes.
  Mr. FILNER. Madam Speaker, for 10 months California has burned while 
the Federal Government has fiddled, and the fire is spreading.
  For 10 months California and the entire western United States has 
faced an economic disaster, while the Federal Government has refused to 
lift a finger to help, and that disaster is spreading. Every business, 
every resident, every school, every local government has been robbed, 
virtually at gunpoint, while the Federal Government has looked the 
other way.
  Madam Speaker, I am talking about the electricity crisis that is in 
California and spreading soon throughout the Nation. We face an 
economic threat that makes the current downturn in the stock market 
pale by comparison. If we do not act soon, every American will be 
forced to pay for this crime. Madam Speaker, many of my colleagues have 
joined me in calling upon the Federal Energy Regulatory Commission to 
comply with its mandate, to fulfill its mission to ensure that rates 
are just and reasonable; yet we continue to pay exorbitant, yes, 
criminal rates for electricity and natural gas.
  Madam Speaker, I, along with many of my colleagues, have asked the 
President and the Secretary of the Department of Energy to act, and 
what we have been told is that the markets will work. We have asked the 
U.S. Department of Justice to enforce our laws, and we have not 
received a response. We have been told that the energy crisis is simply 
a matter of supply and demand; yet if one looks at the facts, that is 
not an adequate explanation. Last summer in the year 2000, demand rose 
by less than 5 percent over the previous year; yet prices doubled, 
tripled and then went 50 times what they had been. Demand is less than 
a third of last summer, and yet prices reach up to 50 times the then-
price.
  Last week in San Diego and the rest of California, we experienced 
rolling blackouts. Was this due to high demand? No. One-third of our 
production was simply off-line; 33 percent of our power-producing 
plants went out of operation.
  It is becoming clearer and clearer to everyone that we are being 
robbed. This is a clear example of the abuse of

[[Page H1120]]

market power, of criminal antitrust violations; and it is occurring not 
just in electricity, Madam Speaker, but in natural gas also. The front 
page of my hometown newspaper today says: ``Market for Natural Gas Was 
Rigged, Firm Bought Control of Pipeline to Manipulate the Price, the 
Federal Energy Commission Was Told.'' Last November this commission 
declared that the electric rates being charged in San Diego and 
California by this energy cartel were unjust and unreasonable, and 
therefore illegal; but the commission refused to act. They basically 
said rob the State blind, and boy did the cartel do it.
  The FERC has issued some findings of market manipulation, but the 
prices are criminal that we are paying today. Madam Speaker, we in 
California, like those in Oregon and Washington and the rest of the 
West, we are being bled dry by this energy cartel. California is paying 
$2 million an hour for electricity, $45 million to $50 million a day, 
sometimes $80 million, over $1.5 billion per month. This cannot keep up 
if our economy is going to survive.
  What we have is a situation in which a mere handful of private 
companies control the market and use that power to artificially drive 
up the prices. This is market manipulation. This is a violation of 
antitrust laws; and yes, this is criminal behavior.
  Madam Speaker, I say we in California know we need more capacity and 
more generation, and we are doing that. We need more conservation, and 
we are doing that. The Governor of California has taken steps in these 
areas to do the maximum that can be done, but still the prices that we 
are paying today, and will pay in the future, unless FERC acts, are 
criminal.
  I have a bill, H.R. 268, which would direct the Federal Energy 
Regulatory Commission to set cost-based rates for electricity in this 
situation where the rates are illegal and provides for the refunds to 
the consumers and to the utilities of California the $20 billion that 
they have stolen from our State in just the last 10 months.
  Madam Speaker, many seem to think that this is only a California 
problem. Many people say California brought it on themselves, let them 
dig themselves out. But the reality is this is everybody's problem. 
That is why the vast majority of Western governors have urged that 
cost-based rates be imposed by FERC. This disaster is affecting the 
entire Western region already, and it is going to spread quickly. 
According to the New York Times, State agencies from New England, the 
Midwest and the Mid-Atlantic have filed complaints about the high 
prices with FERC. The Energy Secretary of this Nation warned that New 
York may face similar problems next summer. This is a national problem. 
We had better act now.

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