[Congressional Record Volume 149, Number 42 (Monday, March 17, 2003)]
[Senate]
[Page S3801]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    NOMINATION OF JOSEPH KELLIHER TO THE FEDERAL ENERGY REGULATORY 
                               COMMISSION

  Mr. WYDEN. Mr. President, I cannot allow the Senate to proceed with 
Mr. Kelliher's nomination to the Federal Energy Regulatory Commission 
today or anytime soon.
  This is a position of enormous importance to my constituents in 
Oregon who have had their energy prices soar through the roof during 
the past few years while the Commission has failed to serve as an 
effective watchdog over energy markets.
  In the limited time I was able to question Mr. Kelliher at his 
confirmation hearing, he demonstrated little understanding of the 
impact on the Northwest of the manipulation of west coast spot markets 
by Enron using the various strategies described in the Enron memos. 
These strategies have had a devastating impact on Northwest energy 
consumers and on long-term contracts that the Bonneville Power 
Administration (BPA) and many other Northwest utilities subsequently 
were induced to sign in order to protect themselves from the volatility 
of the manipulated spot markets. In response to my question about 
whether the Enron memos provided grounds to get out from overpriced 
contracts, Mr. Kelliher states: ``As a legal matter, I do not know sir. 
I thought those memos were designed to manipulate spot markets.''
  To date, there has been a total failure on the part of the Commission 
to make any kind of connection between the manipulation of spot markets 
and the impact on long-term contracts that have raised rates for 
Northwest ratepayers. In fact, the Commission currently appears to be 
pursuing two completely different standards for when ratepayers may be 
entitled to refunds for manipulation of spot markets as compared to 
when overpriced, long-term contracts that were a direct result of that 
manipulation can be voided or reformed. The net effect could be that 
Northwest ratepayers could be struck in long-term, overpriced contracts 
even if the rates in those contracts are not considered just and 
reasonable according to FERC's own standards.
  What is also of concern to me is that there are a number of critical 
issues to Northwest energy consumers that will be coming before the 
Commission in the next several weeks. These include Commission 
decisions on filings by the Bonneville Power Administration and other 
Northwest utilities for relief from contracts with Enron and other 
energy traders, enforcement cases against the marketers accused of 
manipulating west coast energy markets and the Commission's proposal to 
create a one-size-fits-all standard market design for transmission 
systems that would be ill-suited to our region's transmission system 
and could create new opportunities for manipulation of Northwest energy 
markets. With these critical issues coming before the Commission, the 
Northwest needs to be assured our region's interests will be fully and 
carefully considered.
  Mr. Kelliher has not convinced me he fully understands the impact of 
manipulation of west coast energy markets on Northwest ratepayers or 
the problems the Commission's standard market design proposal could 
create for the Northwest electric power grid. For these reasons, I 
would object to a unanimous consent request for the Senate to take up 
Mr. Kelliher's nomination until my concerns can be addressed.

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