[Congressional Record Volume 148, Number 56 (Tuesday, May 7, 2002)]
[Senate]
[Pages S3943-S3946]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     MANIPULATION OF ENERGY MARKETS

  Ms. CANTWELL. Madam President, I rise today to discuss the documents 
that were released yesterday, which illustrate how Enron has 
manipulated energy markets in California and in many Western States. 
Based on yesterday's revelations, I believe ratepayers deserve prompt 
relief from Enron's trading practices. I think these documents show 
Washington State electricity consumers what they have suspected all 
along, that prices have been manipulated and they have, as a result, 
paid higher energy prices, many up to double-digit rate increases.
  Many of you may have seen the articles. I want to have several of 
these printed in the Congressional Record. They emphasize the 
information that is being provided in documents I think my colleagues 
from California had printed in the Record.
  The New York Times, the headline was:

       Enron Forced Up California Energy Prices, Documents Show.

  Another article that was printed in the LA times:

       Memo Shows Enron's Role in Power Crisis. Energy: ``Smoking 
     gun'' document by company lawyers reveals tactics used to 
     create electricity shortage in California, then drive up 
     prices.

  Another in the Washington Post:

       Papers Show That Enron Manipulated California Crisis.

  I ask unanimous consent these be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                 [From the New York Times, May 7, 2002]

        Enron Forced Up California Energy Prices, Documents Show

                (By Richard A. Oppel Jr. and Jeff Gerth)

       Washington, May 6.--Electricity traders at Enron drove up 
     prices during the California power crisis through 
     questionable techniques that company lawyers said ``may have 
     contributed'' to severe power shortages, according to 
     internal Enron documents released today by federal 
     regulators.
       Within Enron, the documents show, traders used strategies 
     code-named Fat Boy, Ricochet, Get Shorty, Load Shift and 
     Death Star to increase Enron's profits from trading power in 
     the state--techniques that added to electricity costs and 
     congestion on transmission lines.
       The documents--memorandums written in December 2000 by 
     lawyers at Enron to another lawyer at the company--also 
     describe ``dummied-up'' power-delivery schedules, the 
     submission of ``false information'' to the state, and the 
     effective increasing of costs to all market participants by 
     ``knowingly increasing the congestion costs.''
       The memos, which provide the first inside look at the 
     complex trading strategies Enron used in California, give 
     strong ammunition to state officials who have long argued 
     that Enron and other power marketers manipulated the state's 
     market and played a crucial role in the crisis that cost 
     California consumers and utilities tens of billions of 
     dollars in 2000 and 2001. The documents state that other 
     power companies used similar techniques.
       Tonight, Senator Dianne Feinstein, Democrat of California, 
     said she would ask Attorney General John Ashcroft ``to pursue 
     a criminal investigation to determine whether in fact federal 
     fraud statutes or any other laws were violated'' by Enron's 
     energy-trading activities. Federal prosecutors are already 
     conducting an inquiry into Enron's accounting, which falsely 
     increased reported profits but ultimately led to the 
     company's filing for bankruptcy protection in December.
       Enron agreed to sell its energy-trading unit earlier this 
     year to UBS Warburg, a division of UBS, Switzerland's largest 
     bank. Nearly all of Enron's senior executives, and most of 
     its board members, have departed in the last nine months.
       Enron's senior management learned of the documents in late 
     April, and the company's board decided during a meeting on 
     Sunday to waive attorney-client privilege and turn the memos 
     over to investigators at the Federal Energy Regulatory 
     Commission, a person close to the company said. The company 
     has also informed the Justice Department, the Securities and 
     Exchange Commission and the attorney general of California 
     about the documents.
       At a noon meeting today, lawyers for Enron gave the memos 
     to investigators from the regulatory commission, which is 
     examining whether Enron manipulated energy markets in the 
     West. The agency released the documents a few hours later. 
     Officials at the commission declined to comment, but they are 
     continuing their investigation into Enron's effect on power 
     prices and asked the company today to provide additional 
     documents on its electricity and natural-gas trading 
     activities.
       In a letter sent by officials at the commission today to 
     Enron, investigators at the agency said the documents 
     described how Enron traders were ``creating, and then 
     `relieving,' phantom congestion'' on California's electricity 
     grid. The documents also detail what investigators described 
     as ``megawatt laundering,'' in which Enron bought power in 
     California, resold the power out of

[[Page S3944]]

     the state and then bought the power back and resold it back 
     into California--allowing Enron to circumvent price caps 
     meant to clamp down on costs.
       ``These documents prove that these companies can manipulate 
     the market,'' said Loretta Lynch, the president of the 
     California Public Utilities Commission, ``Enron prevented 
     California from seeing these documents for years, and now we 
     know why.''
       Ms. Lynch said the documents supported her argument that 
     FERC should leave in place temporary electricity price 
     restraints, introduced last June, which state officials say 
     have played a large role in reining in prices. ``I don't see 
     how FERC can remove the boundaries they put in place on our 
     market last June.''
       An outside lawyer for Enron, Robert S. Bennett, said he 
     could not comment on the trading strategies described in the 
     documents. ``Because we have sold the trading unit and the 
     people with the knowledge of trading practices are no longer 
     with the company, we do not know what the true facts are, and 
     we do not know which parts of the memoranda are correct and 
     which parts are incorrect,'' Mr. Bennett said tonight.
       But he emphasized that the company had agreed to waive that 
     attorney-client privilege because it was trying to cooperate 
     with the various investigations into Enron's business 
     practices. ``These memoranda came to the attention of the 
     board and current management in late April, and the board 
     instructed its counsel to not assert the attorney-client 
     privilege and produce these documents to the appropriate 
     government entities,'' Mr. Bennett said.
       Another memo written by a separate group of lawyers for 
     Enron in 2001--apparently in January or February, after 
     soaring wholesale power prices in California pushed the 
     state's largest utilities to the brink of insolvency--tried 
     to play down the strategies described in the December 2000 
     memos.
       In this later memo, which as written to prepare Enron for 
     the ``various investigations and litigation'' it faced 
     because of the California power crisis, the lawyers 
     repeatedly tried to play down or cast doubt on the 
     conclusions drawn by Enron's own lawyers in the earlier 
     memos.
       ``Some of the information'' in the earlier memos ``which 
     resulted in some erroneous assumptions and conclusions, 
     cannot be supported by the facts and evidence which are now 
     known,'' the later memo stated.
       In one strategy described in the December 2000 memos, Enron 
     would buy power from a state-run exchange for $250 a 
     megawatt-hour--the maximum under the price caps--and resell 
     it outside California for almost five times as much.
       ``Thus, traders could buy power at $250 and sell it for 
     $1,200,'' according to one memo. In that document, the Enron 
     lawyers acknowledged that such activity could be playing a 
     big role in causing electricity shortages in the state, but 
     they suggested that was not a significant concern.
       ``This strategy appears not to present any problems,'' the 
     memo stated, ``other than a public relations risk arising 
     from the fact that such exports may have contributed to 
     California's declaration of a State 2 Emergency yesterday.''
       The Death Star strategy, as described in the memos, allowed 
     Enron to be paid ``for moving energy to relieve congestion 
     without actually moving any energy or relieving any 
     congestion.''
       And the Load Shift strategy allowed Enron to generate about 
     $30 million in profits in 2000 using techniques that, 
     according to the documents, included creating ``the 
     appearance of congestion through the deliberate 
     overstatement'' of power to be delivered.
       In the past, Enron officials said the California power 
     crisis was caused by the state's deeply flawed electricity 
     deregulation plan, the lack of new power-generation capacity 
     and by temporary factors, like a drought that drastically 
     reduced available hydropower. Even some economists who think 
     price manipulation was widespread say these other factors 
     contributed to soaring prices.
       But Enron executives always insisted that absolutely 
     nothing their traders had done contributed to the crisis. In 
     an interview last year, Enron's former chairman, Kenneth L. 
     Lay, dismissed accusations that manipulation was even partly 
     to blame for California's troubles.
       ``Every time there's a shortage or a little bit of a price 
     spike, it's always collusion or conspiracy or something.'' 
     Mr. Lay said in the interview, Which was also taped for 
     ``Frontline'' on PBS. ``I mean, it always makes people feel 
     better that way.''
                                 ______
                                 

               [From the Los Angeles Times, May 7, 2002]

                 Memo Shows Enron Role in Power Crisis

     (By Nancy Rivera Brooks, Thomas S. Mulligan and Tim Reiterman)

       Enron documents released Monday show the company sought to 
     manipulate power prices in California, creating artificial 
     shortages through the use of aggressive trading tactics 
     during the energy crisis.
       The disclosure by federal energy regulators marks the first 
     time that a company's own documents have provided clear 
     evidence of market manipulation, critics said, which 
     contribute to soaring prices and blackouts.
       ``What we have here is a blueprint of . . . manipulation,'' 
     said Robert McCullough a Portland energy consultant and 
     economist. ``It's one thing for economists to state that 
     these things are happening. . . . It's another thing for 
     there to be internal documents on the table stating these 
     things are happening.''
       The documents, uncovered as part of investigation by the 
     Federal Energy Regulatory Commission into possible 
     manipulation of California's electricity market, are seen as 
     strengthening the state's hand in renegotiating costly long-
     term contracts with electricity sellers that were reached 
     during the worst of California's energy crisis in 2001.
       California Democratic Sens. Barbara Boxer and Dianne 
     Feinstein both called for a Justice Department investigation, 
     with Boxer saying the documents ``confirm what I've been 
     saying for months, that Enron manipulated the California 
     energy market and needs to be held accountable. It is high 
     time we see some indictments handed down in this case.''
       Although Feinstein said the trading practices may violate 
     federal fraud statutes, energy experts saw the strategies as 
     infractions of market rules that are punishable by fines or 
     suspensions rather than criminal prosecution.
       The state's grid operator has sought a variety of remedies 
     from FERC for such practices and received some relief in June 
     in the form of price caps throughout the West and other 
     mitigation measures.
       Enron Lawyer Robert Bennett said company executives, under 
     new leadership after Enron's Dec. 2 bankruptcy filing, gave 
     the documents to the Government and waived attorney-client 
     privilege because ``they thought it was the right thing to 
     do. The truth of the matter is, we don't know what the 
     truth of the underlying facts are'' in the memos.
       Power shortages sent prices skyrocketing in May 2000, which 
     pushed California's two largest privately held electricity 
     utilities to the edge of ruin, caused six days of statewide 
     blackouts and forced the state to buy power for more than 10 
     million utility customers.
       Enron and other power sellers have denied that they 
     manipulated prices or power supplies, contending that the 
     energy crisis was caused by a shortage of power plants and 
     hydroelectricity.
       ``These documents make it clear that Enron was trying to 
     squeeze every dime it could out of the market. It's not 
     surprising that they violated [California Independent System 
     Operator] rules because the ISO don't provide much punishment 
     for violators,'' said Severin Borenstein, a UC Berkeley 
     professor and director of the UC Energy Institute.
       One memo, dated Dec. 6, 2000, and prepared by an Enron 
     staff attorney and an outside lawyer in anticipation of 
     investigations and lawsuits, explained how Enron traders 
     exploited loopholes or market limitations to boost prices or 
     to wring special payments out of the agencies that operated 
     California's electricity markets.
       Enron traders used such price-hiking techniques as sham 
     congestion on electricity lines or selling electricity to 
     out-of-state affiliates only to re-import it at higher 
     prices, the memo said.
       One strategy, code-named Death Star, ``earns money by 
     scheduling transmission in the opposite direction of 
     congestion,'' the Dec. 6 memo said. ``No energy, however, is 
     actually put onto the grid or taken off.''
       A second undated memo, written by a different law firm, 
     sought to cast a more favorable light on the strategies 
     discussed in the first memo.
       The second memo defended the Death Star strategy, saying it 
     actually reduced congestion on electricity lines at times and 
     increased supply along underused electricity lines.
       The Dec. 6 memo also claimed that other traders had begun 
     copying Enron's techniques, many of which have been 
     identified by California officials, although without 
     documented evidence.
       ``These are the smoking guns we always alleged,'' said 
     Public Utilities Commission President Loretta M. Lynch. 
     ``These documents show their business plan was to game the 
     California market so they could suck every dollar out of 
     California.''
       Department of Water Resources spokesman Oscar Hidalgo said 
     the department hopes the release of the Enron documents will 
     spur more companies to renegotiate dozens of long-term 
     contracts that DWR signed after it became the power buyer of 
     customers of financially troubled utilities.
       The California Independent System Operator, which runs 
     California's last remaining official energy market, has asked 
     FERC to grant the state $9 billion in refunds because prices 
     charged in 2000 and 2001 were unreasonable, although the 
     regulators now are considering a lower payment.
       The quirks of the California energy market presented Enron 
     and other market participants with myriad opportunities to 
     take profitable advantage.
       California had two markets: a ``day-ahead'' auction market 
     through the California Power Exchange--``The PX,'' in trader 
     lingo--and the ``real-time'' market run by Cal-ISO.
       Traders quickly found ways to play the two markets off each 
     other.
       The day-ahead market was supposed to handle the bulk of the 
     electricity requirements, and the real-time market was meant 
     only to correct occasional imbalances.
       When the crisis hit, the real-time market grew in 
     importance and was the locus of wild price swings.
       Buyers and sellers who wanted to participate in the real-
     time market were required to submit to Cal-ISO daily 
     schedules of their production and their ``load,'' or the 
     amount

[[Page S3945]]

     of power they intended to use. The two were supposed to be in 
     balance.
       But sometimes when power supply was tight, Cal-ISO paid 
     participants a premium when they happened to provide more 
     power than Cal-ISO required.
       One of Enron's basic strategies, according to the memo, 
     involved deliberately overstating its load. It would deliver 
     as much power as promised but then use less than scheduled 
     and get a premium for the difference.
       Another Enron stratagem was to take advantage of congestion 
     in the real-time market that Enron had helped create in the 
     day-ahead market, the memo said.
       During the energy crisis, the amount of power scheduled for 
     delivery into the California market sometimes exceeded the 
     capacity of the system's transmission lines.
       At such times, Cal-ISO would make ``congestion payments'' 
     to market participants that either schedule transmission in 
     the opposite direction or reduce their generation/load 
     schedule.
       ``Because the congestion charges have been as high as $750/
     MW [per megawatt], it can often be profitable to sell power 
     at a loss simply to collect the congestion payment,'' the 
     memo said.
       Enron traders, acknowledged as among the industry's most 
     creative, worked a number of variations on these two themes. 
     In addition to Death Star, other colorful nicknames for 
     trading methods included Get Shorty, Ricochet and Fat Boy to 
     identify them in discussions with traders from other firms.
       California imposed price caps to cope with the emergency, 
     but even these offered an opportunity for clever traders who 
     realized that prices weren't capped in neighboring areas that 
     were affected by the crisis.
       On Dec. 5, 2000, for example, prices soared to $1,200 per 
     megawatt-hour in the Pacific Northwest, while a $250 cap was 
     in place in California.
       Enron traders saw that they could lock in an instant $950 
     profit for each megawatt-hour of electricity by buying power 
     on the California PX and selling it up north, according to 
     the memo.
       ``This strategy appears not to present any problems, other 
     than a public relations risk from the fact that such exports 
     may have contributed to California's declaration of a Stage 2 
     emergency yesterday,'' the memo said.
       Cal-ISO spokeswoman Stephanie McCorkle said some of the 
     behaviors probably caused prices to rise, but the grid 
     operator does not believe they contributed to the six days of 
     blackouts in early 2001. The reason, she said, is that the 
     blackouts were caused by a severe shortage of power, not by 
     phantom congestion.
       Cal-ISO has asked FERC to extend market protections that 
     are due to expire Sept. 30, including a price cap on 
     electricity in the West.
                                  ____


                [From the Washington Post, May 7, 2002]

            Papers Show That Enron Manipulated Calif. Crisis

                            (By Peter Behr)

       Enron Corp. manipulated the California electricity market 
     with such maneuvers as transferring energy outside the state 
     to evade price caps and creating phony ``congestion'' on 
     power lines, according to internal Enron documents released 
     yesterday.
       The techniques described in two memos written by lawyers 
     for Enron in December 2000 were given names such as ``Fat 
     Boy,'' ``Death Star,'' ``Get Shorty'' and ``Ricochet.'' The 
     company turned the documents over to federal regulators, who 
     made them public.
       The evidence of their use contradicts denials Enron made at 
     the time and provides impetus to several investigations of 
     the bankrupt energy giant's role in the California crisis.
       Operators of California's power system ordered rotating 
     blackouts on six days early in 2001. That followed a tenfold 
     surge in power prices that began the previous summer, hitting 
     the state's utilities with billions of dollars in excess 
     electricity charges.
       Details of Enron's financial problems came to light months 
     after the California crisis. ``These documents confirm what 
     we have known for some time, through circumstantial evidence: 
     They show internal corporate strategies for manipulating the 
     market,'' said California state Sen. Joseph Dunn (D), who 
     heads a legislative committee investigation into the power 
     crisis the state suffered a year ago.
       U.S. Sen. Dianne Feinstein (D-Calif.) said she will ask the 
     Justice Department to launch a criminal investigation of 
     power sales in California.
       The ``ricochet'' strategy was used to evade wholesale price 
     controls on California electricity by transferring power out 
     of the state and then back in.
       Another maneuver took advantage of dramatically higher 
     prices that California energy officials were willing to pay 
     to get emergency supplies during shortages, the Enron 
     documents say.
       The ``Death Star'' strategy is described as permitting 
     Enron to be paid ``for moving energy to relieve congestion 
     without actually moving any energy or relieving any 
     congestion.''
       The reports were sent to Richard Sanders, Enron's vice 
     president and assistant general counsel, in preparation for 
     lawsuits arising from the California crisis. Sanders, who is 
     still with Enron, could not be reached for comment yesterday.
       A third, undated memo, prepared by different lawyers in 
     consultation with a senior Enron trading executive, took 
     issue with the first two reports, concluding that some of the 
     trading strategies ``may have increased'' power supplies.
       Energy analyst Robert McCullough said the memos indicate 
     that Enron traders deliberately tried to create the 
     appearance of shortages and congestion, prompting 
     declarations of power blackouts that need not have been 
     ordered in some cases.
       State officials complained during the crisis that 
     electricity suppliers were manipulating the state's 
     deregulated power markets. Under political pressure last 
     spring, the Federal Energy Regulatory Commission imposed 
     temporary electricity price ceilings on California and 
     neighboring western States.
       That action, coupled with favorable weather and an economic 
     slowdown, sent electricity prices plummeting last summer, 
     ending the power crisis.
       FERC officials and energy companies are still locked in a 
     battle over the amount of refunds owed to California because 
     of overcharging.
       Enron said the documents released yesterday were spotted 
     recently by company officials who took office after Enron's 
     Dec. 2 bankruptcy filing, the largest such filing in U.S. 
     history.
       As correspondence between Enron and its attorneys, the 
     documents has previously been marked confidential and had not 
     been given to Federal and State investigators.
       Enron attorney Robert Bennett said Enron managers concluded 
     that the documents should be turned over, and in a telephone 
     conference call Sunday, Enron's board agreed.
       ``This board and the current management wants to be fully 
     candid with Congress and other Government entities and to do 
     the honorable and responsible thing,'' Bennett said.

  Ms. CANTWELL. Madam President, these articles show what consumers in 
my State have thought all along, that these prices were being 
manipulated. That is why in January of this year I asked the Federal 
Energy Regulatory Commission to investigate these high prices that have 
literally cost people jobs, made consumers pay as much as 60-percent 
rate increases, and have made it tough for our economy in Washington 
State to continue to thrive with these high energy prices in some 
industries such as aluminum and other intensive energy businesses.
  Yet what has happened--I do not know if other people in the country 
realize this--is our consumers may end up paying these high rates for 
many years, even though Enron has gone bankrupt. The reason is that the 
contracts these companies have had with Enron are as many as 5-year to 
7-year--in some cases 8-year--contracts which were negotiated at the 
time of this crisis and very high prices. In fact, energy prices--the 
rates were as much as 1,000 times higher during this crisis.
  Consumers hear there were memos with names such as Fat Boy or Death 
Star or Get Shorty or Ricochet that were really plans by this company 
to manipulate prices. The Federal Energy Regulatory Commission should 
act upon these memos and basically find that these rates have, in fact, 
been manipulated. That is right, on the west coast, both in California 
and in Washington and in Oregon, prices were manipulated and because of 
those unjust and unreasonable rates these Northwest entities should be 
let out of these long-term Enron contracts.
  I believe that is critically important for us in the Northwest, who 
may face even further rate increases in the future because of these 
high energy costs, and the fact that the Bonneville Power 
Administration, for example, would be let out of these contracts, it 
might save as much as $250 million to $300 million just in the costs 
that BPA has to pay. Instead, they would be able to go out on the 
market, not paying the high Enron prices, but go out on the market 
today and get cheaper electricity prices.
  I cannot tell you how important it is for us. My colleague from 
Washington, Senator Murray, and Senator Feinstein, Senator Boxer, 
Senator Wyden, and Senator Smith--we have all spoken on this issue and 
how it impacts the whole west coast. It is critically important that 
the Federal Energy Regulatory Commission take the information they have 
discovered in their investigation and make this decision on unjust and 
unreasonable rates as soon as possible.
  I believe the Federal Energy Regulatory Commission ought to use its 
power to void long-term contracts with unjust and unreasonable rates. I 
also believe we need new Senate hearings to review these findings and 
to explore all available options for ratepayer relief under federal 
law.

[[Page S3946]]

  I would also like to add my voice to that of my colleague from 
California, Senator Feinstein, and my colleague from Washington, 
Senator Murray, in calling for a criminal investigation by the 
Department of Justice into allegations that Enron has manipulated 
prices in the Western electricity markets.
  As my colleagues are aware, the Western electricity crisis of 2000 
and 2001 has taken a tremendous toll on the economy of my state, and of 
Oregon and California. As a result of electricity prices that spiraled 
to as much as 1000 times the normal rates, consumers throughout the 
West have paid dearly. They have paid in their utility bills--which 
have been raised as much as 60 percent--and they have paid with job 
loss in communities that have seen entire industries shut down.
  Madam President, throughout the Western electricity crisis, I joined 
with many of my Western colleagues in asking the Federal Energy 
Regulatory Commission (FERC) to step in and do its job--to ensure just 
and reasonable rates. For many months, FERC refused and assured many of 
us that the Western power crisis was simply the result of drought and a 
shortage of electricity--a shortage that many of us raised questions 
about, given that it seemed to materialize over night.
  FERC and this administration repeatedly denied what many of the 
impacted citizens in Washington state knew intuitively to be true--that 
our Western markets were being manipulated by a handful of companies 
that drew enormous profits directly from their pockets and from the 
coffers of their businesses.
  With the collapse of Enron, Senator Bingaman, chairman of the Senate 
Energy and Natural Resources Committee, wisely called a hearing to 
assess the bankruptcy's impacts on the energy markets. At this hearing, 
on January 29, I asked FERC Chairman Pat Wood to take a close look at 
allegations that Enron have been manipulating markets. In a letter sent 
that same day, I wrote:

       Congress and our nation's consumers-particularly those of 
     the Pacific Northwest, who have suffered through retail rate 
     increases of up to 50 percent over the past year-deserve to 
     know whether Enron was manipulating Western power markets at 
     their expense. After Enron collapsed, prices in the West's 
     forward energy markets plummeted by 20 to 30 percent. Where 
     there's smoke there's often fire, and we must investigate 
     whether we have a simple coincidence here, or something more. 
     The public deserves answers and, if appropriate, corrective 
     action.

  In response to my request, FERC opened a staff investigation on these 
allegations. And late yesterday, this investigation revealed the first 
real smoking gun. Now posted on the Commission's Website, you will find 
memos in which attorneys from Enron outline their strategies for 
manipulating prices in Western markets.
  This has real, direct impacts on consumers in my state. During the 
height of the crisis, many utilities in my state signed long-term 
contracts with Enron at prices that looked like deals at the time--in a 
severely dysfunctional market--but today, are two to three times 
current market rates. The Bonneville Power Administration, for example, 
which provides 60 percent of all the power consumed in my state, is on 
the hook for $700 million worth of Enron contracts over the next few 
years. In today's market, these contracts would be half as costly. 
Nevertheless, Bonneville and the consumers of the Northwest continue to 
be held hostage. They continue to pay Enron. At the conclusion of this 
investigation, I hope that FERC will see to it that justice is done. If 
markets were manipulated--as the evidence now suggests--Washington 
State consumers should be given relief from these contracts.
  In addition to these ongoing FERC proceedings, I do hope the Justice 
Department will open a criminal investigation into Enron's actions to 
manipulate electricity prices and defraud consumer-ratepayers.
  But I also look forward to this body exercising what I believe is 
necessary continued oversight. This morning, at an Energy and Natural 
Resources Committee hearing, Senator Bingaman and I discussed the 
possibility of a hearing on these issues. I also believe that the 
Judiciary Committee may be an appropriate forum for discussing the 
antitrust component of these allegations.
  But in addition, I hope my colleagues--and particularly those who 
will serve on the Energy bill conference committee--will pay close 
attention to what this means for our nation's electricity markets. 
During the debate on that bill, I offered a consumer protection 
amendment to the electricity title that I believe would have prevented 
a recurrence of the Western energy crisis and incorporated many of the 
lessons we have learned--and continue to learn--from Enron's collapse. 
My amendment suggested that before FERC was allowed to open up markets 
like California to deregulation, it should have to establish clear 
market rules, have in place the mechanisms necessary to monitor markets 
to detect manipulation. It would have directed FERC to take decisive, 
corrective action to protect consumers when abuses do occur. And it 
would have given FERC and state utility commissions the access to books 
and records they would need to discover evidence like the memos we have 
now found in this Enron investigation, almost two years after the 
energy crisis began and after months of business closures and rate 
hikes across the West.
  I hope Attorney General Ashcroft will heed our call today. I look 
forward to continuing our oversight of this issue in the Energy 
Committee, and I hope our conferees will consider this new evidence--
that Enron has been manipulating power markets--as they consider the 
energy bill.
  I yield the floor.

                          ____________________