[Congressional Record Volume 147, Number 85 (Tuesday, June 19, 2001)]
[House]
[Pages H3234-H3235]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  CHANGE IN ENERGY REGULATION POLICY BY THE FEDERAL ENERGY REGULATORY 
       COMMISSION COINCIDES WITH SWITCH IN CONTROL OF U.S. SENATE

  The SPEAKER pro tempore (Mr. Johnson of Illinois). Under a previous 
order of the House, the gentleman from Oregon (Mr. DeFazio) is 
recognized for 5 minutes.
  Mr. DeFAZIO. Mr. Speaker, 6 months ago the staff of the Federal 
Energy Regulatory Commission found that the prices being charged for 
power in the western United States were neither just nor reasonable. 
The law would require the Federal Energy Regulatory Commission to then 
take action to both lower the prices and to order rebates for market 
manipulation, price-gouging, price-fixing that was going on.
  But under the leadership of Mr. Hebert, chair of the Federal Energy 
Regulatory Commission, appointed by President Bush, FERC did nothing. 
They said there was not really a problem, this was just the market 
sending us a signal. What was the signal? Billions of dollars extracted 
from ratepayers, residential ratepayers, small business and big 
businesses alike; rolling blackouts and brownouts in California; 
incredibly high wholesale prices in the Pacific Northwest, with prices 
up to one hundred times, one hundred times what was charged just 2 
years ago in the wholesale market.
  But it also meant up to 1,000 percent, a 1,000 percent increase in 
profits for a handful of energy companies, most of whom happened to be 
based in Texas, and most of whom happened to be very generous 
contributors both to this administration and to the majority party in 
this House.
  Mr. Hebert said no action was necessary, that he would do nothing. At 
one meeting, he opined that he would pray for us; faith-based 
regulation, I guess. But something changed all of a sudden; being 
stonewalled for months and months; his own staff saying the law was 
being violated; being sued; being petitioned by Members of Congress, by 
constituents, businesses desperate for relief.
  On Monday they held an emergency meeting. What changed? What could 
have brought that about? Did they finally read their own staff reports, 
finally recognize the market manipulation? No, what changed is one vote 
in the United States Senate. Suddenly, there were committees in the 
Senate with the capability of investigating what was going on, and they 
scheduled hearings for tomorrow to bring in the Federal Energy 
Regulatory Commission to have the chairman explain how it is his staff 
found things to be unjust and unreasonable, but he said that there was 
no problem.
  Under that threat, they have adopted some half measures; better than 
nothing, but not much. They are going to peg prices to the least 
efficient, the most expensive unit, most obsolete

[[Page H3235]]

generating unit operating. It is better than what has been going on 
today, with prices up to $4,000 a megawatt hour. Maybe we will get it 
down to $200 or $300. That is still ten times what the market provided 
for just 2 years ago.
  They will extend it across the entire western United States, which 
will offer some relief to my part of the country in the Pacific 
Northwest.
  They did admit the price-gouging and market manipulation had gone on 
and that refunds were due, but they set up some sort of voluntary 
settlement process to try and extract the billions of dollars back from 
these Texas-based energy conglomerates.
  That is not going to work. They need to use their authority to order 
the refunds, and they need to set the amount of the refunds.
  Then, finally, they said it would only last through a year from next 
October; that is, two summers for California, two peak seasons, but 
only one peak season for my part of the country. This will still cost 
consumers hundreds of millions, ultimately billions of dollars more 
than they need to pay to have reliable energy in the western U.S. It 
will still put untold hundreds of millions and billions of dollars into 
the pockets of market manipulators. It is just that the profits will 
not be a 1,000 percent increase anymore, it might only be a 200 percent 
increase or 300 percent increase for those companies based in Texas who 
have been contributing so generously to the majority party in this 
administration.
  But they had to do something, because they might lose their whole 
scam, their whole game. The heart of it is deregulation. Deregulation 
does not work in a monopoly environment. It does not work when there 
are a few plants and one big set of transmission wires that runs down 
to smaller wires that run to our house.
  How are we going to have competition? Competition could never work, 
will never work in this industry. It is a vital public necessity. For 
more than 60 years we regulated in this country because of the collapse 
the last time we played with deregulation in the United States, back in 
the 1920s.
  It is time to return to regulation. But short of that, it is time for 
effective cost-based caps on power, something that runs for 2 years and 
something that orders that rebates be done. We should not accept in 
this House these half-measures by the Federal Energy Regulatory 
Commission in their desperate attempt to save themselves from being 
embarrassed in having to testify before the United States Senate.

                          ____________________