Congressional Record, Volume 149 Issue 115 (Wednesday, July 30, 2003)

[Congressional Record Volume 149, Number 115 (Wednesday, July 30, 2003)]
[Senate]
[Pages S10203-S10218]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

ENERGY POLICY ACT OF 2003--Continued

The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. Madam President, I ask unanimous consent that the
pending amendment be set aside.
The PRESIDING OFFICER. Is there objection?
Mr. DOMENICI. I object.
The PRESIDING OFFICER. Objection is heard.
Mr. DOMENICI. Does the Senator want to offer a second-degree
amendment to the electricity amendment?
Mr. FEINGOLD. Yes.
Mr. DOMENICI. I did not know that. I did not understand that.
Mr. FEINGOLD. My attempt was to set aside what I thought was a
pending amendment to your amendment and then to offer a different
amendment to your amendment. And I make that request again.
Madam President, I ask that in the form of a unanimous consent
request, that the pending amendment to the Domenici amendment be set
aside.
Mr. DOMENICI. Well, they have all been currently set aside for
amendments to the electricity amendment, Madam President. That is why I
wondered, what is the need for the unanimous consent request?
The PRESIDING OFFICER. There are currently pending second-degree
amendments which would have to be set aside.
Mr. DOMENICI. I have no objection to the request.
Mr. REID. Will the Senator from Wisconsin yield?
Mr. FEINGOLD. I yield to the Senator from Nevada.
Mr. REID. Madam President, I direct this question through you to the
distinguished manager of the bill for the majority. I have had a number
of inquiries during the vote as to whether or not, when the Secretary
of Defense comes here at 4 o'clock this afternoon, we are going to take
a recess. We have a number of Democrats who are going to attend. I
assume there will be members of the majority attending that briefing
also.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, if somebody is discussing an
amendment, and there is business on the floor of the Senate, we will
not recess; we will work.
The PRESIDING OFFICER. Without objection, the request of the Senator
from Wisconsin is granted.
Mr. FEINGOLD. Thank you, Madam President.

Amendment No. 1416 To Amendment No. 1412

Madam President, I have an amendment at the desk.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Wisconsin [Mr. Feingold], for himself and
Mr. Brownback, proposes an amendment numbered 1416.

Mr. FEINGOLD. Madam President, I ask unanimous consent that reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To protect the public and investors from abusive affiliate,
associate company, and subsidiary company transactions)

Beginning on page 35, strike line 10 and all that follows
through page 35, line 15, and insert the following:

[[Page S10204]]

SEC. 1156. AFFILIATE, ASSOCIATE COMPANY, AND SUBSIDIARY
COMPANY TRANSACTIONS.

Section 204 of the Federal Power Act (16 U.S.C. 824c) is
amended by adding at the end the following:
``(i) Transactions With Affiliates and Associated
Companies.--
``(1) Definitions.--In this subsection, the terms
`affiliate', `associate company', `public utility', and
`subsidiary company' have the meanings given the terms in
section 1151 of the Energy Policy Act of 2003.
``(2) Regulations.--
``(A) In general.--The Commission shall promulgate
regulations that shall apply in the case of a transaction
between a public utility and an affiliate, associate company,
or subsidiary company of the public utility.
``(B) Contents.--At a minimum, the regulations under
subparagraph (A) shall require, with respect to a transaction
between a public utility and an affiliate, associate company,
or subsidiary company of the public utility, that--
``(i) the affiliate, associate company, or subsidiary
company shall be an independent, separate, and distinct
entity from the public utility;
``(ii) the affiliate, associate company, or subsidiary
company shall maintain separate books, accounts, memoranda,
and other records and shall prepare separate financial
statements;
``(iii)(I) the public utility shall conduct the transaction
in a manner that is consistent with transactions among
nonaffiliated and nonassociated companies; and
``(II) shall not use its status as a monopoly franchise to
confer on the affiliate, associate company, or subsidiary
company any unfair competitive advantage;
``(iv) the public utility shall not declare or pay any
dividend on any security of the public utility in
contravention of such rules as the Commission considers
appropriate to protect the financial integrity of the public
utility;
``(v) the public utility shall have at least 1 independent
director on its board of directors;
``(vi) the affiliate, associate company, or subsidiary
company shall not acquire any loan, loan guarantee, or other
indebtedness, and shall not structure its governance, in a
manner that would permit creditors to have recourse against
the assets of the public utility; and
``(vii) the public utility shall not--

``(I) commingle any assets or liabilities of the public
utility with any assets or liabilities of the affiliate,
associate company, or subsidiary company; or
``(II) pledge or encumber any assets of the public utility
on behalf of the affiliate, associate company, or subsidiary
company;

``(viii)(I) the public utility shall not cross-subsidize or
shift costs from the affiliate, associate company, or
subsidiary company to the public utility; and
``(II) the public utility shall disclose and fully value,
at the market value or other value specified by the
Commission, any assets or services by the public utility
that, directly or indirectly, are transferred to, or
otherwise provided for the benefit of, the affiliate,
associate company, or subsidiary company, in a manner that is
consistent with transfers among nonaffiliated and
nonassociated companies; and
``(ix) electricity and natural gas consumers and investors
shall be protected against the financial risks of public
utility diversification and transactions with and among
affiliates and associate companies.
``(3) No preemption.--This subsection does not preclude or
deny the right of any State or political subdivision of a
State to adopt and enforce standards for the corporate and
financial separation of public utilities that are more
stringent that those provided under the regulations under
paragraph (2).
``(4) Prohibition.--It shall be unlawful for a public
utility to enter into or take any step in the performance of
any transaction with any affiliate, associate company, or
subsidiary company in violation of the regulations under
paragraph (2).''.

Mr. FEINGOLD. Madam President, I rise today to offer an amendment on
behalf of myself and the Senator from Kansas, Mr. Brownback. I am
pleased that the Senator from Kansas is joining me in this effort, and
he has done so because I know he shares my view that the repeal of the
Public Utility Holding Company Act in the underlying bill creates a
serious regulatory void and market flaw that Congress should correct.
I am so pleased this is a bipartisan effort. I believe we have broad
support in this body and beyond for these amendments.
These amendments would improve on the bill by making clear the
actions that the Federal Energy Regulatory Commission--or FERC--must
take to ensure that deregulated holding companies do not outcompete our
small businesses, damage their financial standing, and then pass the
costs of bad investments to consumers.
Our amendment is supported by a wide and impressive coalition of
business, labor, financial, and consumer groups which include: the
Independent Electrical Contractors, Air Conditioning Contractors of
America, Plumbing-Heating-Cooling Contractors, Associated Builders and
Contractors, National Electrical Contractors Association, Mechanical
Contractors, Sheet Metal Air Conditioning Contractors, the
International Brotherhood of Electrical Workers, the National Alliance
for Fair Competition, the Small Business Legislative Council, Consumers
for Fair Competition, and the Association of Financial Guaranty
Insurors.
The Senator from Kansas and I are concerned because electricity is
not like other commodities. Electricity is essential to public well-
being. When this bill is enacted and the Public Utility Holding Company
Act is repealed, a strong incentive will exist for large utilities with
the financial resources and the potential to exercise market power to
get larger. Already, the electric utility industry is undergoing rapid
consolidation. In the past 3 years alone, there have been more than 30
major utility mergers and acquisitions, creating large multistate
holding companies, including several in my own home State and with
utilities in Minnesota that serve Wisconsin. Many companies have seen
their stock plunge and credit ratings downgraded, and these companies
are now prime buy-out targets.
I acknowledge that deregulation is not inherently bad and should not
always be prevented. It can produce efficiencies, economies of scale
and cost savings for electrical consumers. However, it can also reduce
competition, increase costs, and frustrate effective regulator
oversight. This amendment protects consumers from assuming the costs
and risks of utility diversification into non-utility businesses,
prevents utilities from subsidizing affiliate ventures and competing
unfairly with independent businesses, and protects utility investors.
It does so by requiring FERC to issue regulations that require
affiliate, associate, and subsidiary companies to be independent,
separate, and distinct entities from public utilities; maintain
separate books and records; structure their governance in a manner that
would prevent creditors from having recourse against the assets of
public utilities; and prohibit cross-subsidizing, or shifting costs
from affiliate, associate, or subsidiary companies to the public
utilities.
The Public Utility Holding Company Act was enacted in 1935 to rein in
the pervasive economic and political sway that holding companies held
over the Nation's public utilities at that time. Studies conducted by
the Federal Trade Commission and the U.S. House of Representatives at
the time demonstrated that the holding companies, which controlled
approximately 80 percent of the Nation's gas and electric utilities,
were exploiting both consumers and investors. At the time PUHCA was
passed, 16 major holding companies and their utility subsidiaries
produced more than three-quarters of the electric energy in this
country.
Individual States and localities enacted their own laws, but were
unable to control these multi-State holding companies--many of which
also held investments in foreign countries--and their utility
subsidiaries. Holding companies created organizational structures that
extended across State lines, specifically to place the holding
companies beyond the regulatory reach of the individual State
commissions. In fact, registered holding companies were formed
specifically for the purpose of avoiding regulation. Holding companies
leveraged their utility assets to gain financing for risky investment
ventures and engaged in anticompetitive behavior.
PUHCA requires that proposed investments benefit the utility system,
and not harm ratepayers, shareholders or the public interest.

PUHCA requires that holding companies seeking to acquire utilities
obtain preapproval from the Securities and Exchange Commission. In
addition, a particular class of holding companies, known as
``registered holding companies,'' those holding companies with utility
subsidiaries in more than one State, must obtain SEC approval also for
acquisitions of nonutility businesses. The SEC has authority to oversee
and provide advance approval for the complicated financial transactions
of the registered holding companies,

[[Page S10205]]

including intrasystem transactions and diversification into unregulated
businesses.
PUHCA does these things, but the bill before us repeals PUHCA. As a
result, registered holding companies will be able to freely diversity
into unregulated businesses, and to engage in interaffiliate
transactions in which the holding company and nonutility businesses
drain financial resources and key assets from the utility businesses.
In California, for example, holding company maneuvers have left
California utilities in a weakened financial condition. Billions of
dollars have been moved out of their utility companies into the holding
company and then into their unregulated affiliates which are protected
by laws that now put this cash beyond the reach of even the holding
company. As a result, the utilities have had too little cash to carry
out their utility obligations.
In addition, even with PUHCA, we are already experiencing concerns
about utilities expanding into electricity-related services and
outcompeting small businesses in my State. Small contractors can't
compete against big utilities in areas like energy efficiency upgrades
to private homes, when big utilities can use existing assets like
personnel, equipment, and vehicles to perform those services. When
PUCHA is repealed, utilities will be able to expand into other business
areas, and we should make certain that we protect small businesses.
This amendment is good public policy, and it will strengthen the
Senate's position in Conference with the House of Representatives. I
urge my colleagues concerned about ensuring fairness in a deregulated
system to support this amendment.
Let me say how delighted I am to be working with the Senator from
Kansas who I know has a deep and abiding commitment to small businesses
as well.
The PRESIDING OFFICER. The Senator from Kansas.
Mr. BROWNBACK. Madam President, I thank my colleague from Wisconsin
for offering this amendment. I join him on it.
The amendment my colleague from Wisconsin has described first came to
my attention by a constituent and a friend of mine, D.L. Smith, Topeka,
KS. D.L. is a great K-Stater, loves his country, has a medium size
contracting business. He employs between 57 and 100 Kansans. Founded in
1972, the DL Smith companies provide commercial, institutional, and
industrial electrical services and, in recent years, even a little bit
of telecommunications. They have been expanding slightly. D.L.'s
service trucks can be seen as far west as Salina and as far south as
Pittsburg, KS.
DL's is a successful medium size business by Kansas standards. It
might grow and could become more successful. But it might not be able
to grow and could falter. The success or failure of this business will
in great part be dependent upon the dispensation of this amendment.
This is what he brought to my attention. D.L. said: Look, what is
taking place is we are having to compete with these large utility
companies that he asserts are using their regulated business to
subsidize the unregulated business and drive the small contractors out
of business. That is my 15-minute speech, what he said and the examples
he gave.
What he does now is help in the contracting of electrical services
into homes. He is having to compete now with very large utility
companies that are looking at other areas they can expand into to be
able to do contracting work and, in the process, are driving these
small to mid-size businesses out of business.
Such diversification on the part of the utility companies has been
the cause of significant and continuing harm to many small private
sector firms. Utility-owned subsidies and affiliates now operate in
almost every imaginable type of business, from auto salvaging to resort
management to real estate brokerage to, more frequently, electric and
mechanical contracting. Utilities now routinely sell appliances,
provide plumbing, heating and cooling, and service contracts, engage in
insulation work, sell and install storm windows and doors, provide
outdoor lighting and interior lighting fixtures.
Normally as a free market Republican, I wouldn't have much problem
with that. This is a free country. People can compete the way they want
to, the way they choose. The problem with this is, you have a regulated
utility that has a clear income source that is dependent upon
ratepayers that is set by the Government, and they have a flow of
resources that is established by the public sector. And it is a rate of
return based upon cost plus.
The challenge--and what the D.L. Smiths of the world are feeling--is
the subsidization of that regulated business going into the unregulated
field and driving small to mid-size contractors out of business. Too
many companies are doing a very natural thing--trying to grow, get a
little more business here and there for their shareholders to try to be
able to hold down the cost of electrical rates to their customers. That
is understandable. The problem is, you are using that regulated utility
where they don't have competition coming in there to compete against an
unregulated field and, in many cases, driving out small to mid-size
contractors like the D.L. Smiths of Topeka, KS, and others.
Private sector businesses both small and large welcome competition.
Unfortunately, there have been numerous instances where utilities have
engaged, in some cases, in unfair and abusive competitive behavior
which undermines true competition in these impacted markets.
The primary obstacle to free, fair, and open competition in these
markets is the ability of a utility to provide its affiliates and
subsidiaries with artificially lower costs of operation through cross-
subsidization and the failure to properly recover the true costs of
equipment and services provided by the utility to such unregulated
operations. These advantages arise neither from size, nor efficiency,
but rather from the corporate relationship such operations have with
its related utility.
The utility companies are doing, by and large, a great job in serving
the public, providing utility rates at as low a cost as possible. That
is a good thing. They work conscientiously to do that. We have a number
of very good utility companies in the State of Kansas. When they use
the cross-subsidization, which is what we are trying to prevent in this
bill, to run out small and midsize businesses, that is when we have a
problem, particularly when denying access to newly emerging markets, a
key to future expansion, job growth, and profitability for this
country.
For those reasons, I support this amendment. I also recognize my
colleagues who wrote the bill, the Senators from New Mexico,
particularly Senator Domenici. They are trying to address this issue.
We put forward an amendment that we hope will strengthen the bill, help
it out, one that doesn't negatively impact the electrical utility
businesses, other than to say here is the area in which you can
operate. Outside of that, this should be left to other businesses,
particularly small and midsize ones, to allow them to grow.
The amendment we put forward has broad support from the contracting
community, electrical contractors, plumbing, heating, and mechanical
contractors because they are feeling this onslaught. Most of my
colleagues, I guess, have been contacted by the contractors, most of
which are small to midsize businesses operating in communities
throughout the country, that want this Feingold-Brownback amendment to
be added to the Energy Policy Act of 2003.
I recognize the work that the chairman and ranking member have put on
this particular topic. We hope this amendment can be accepted because
we think it strengthens the bill.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
Mr. FEINGOLD. Madam President, I thank the Senator from Kansas for
his excellent work. It is an excellent example of why this is so
important. I appreciate his support in working with me on it.
I ask unanimous consent that the Senator from Oregon, Mr. Wyden, be
added as a cosponsor of the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. FEINGOLD. Madam President, I ask unanimous consent that a list of
organizations in support of the amendment be printed in the Record at
this time.

[[Page S10206]]

There being no objection, the material was ordered to be printed in
the Record, as follows:

Support for Feingold-Brownback Amendment on Affiliate Transactions

The following organizations support this amendment:
American Association of Retired People.
AFGI: Association of Financial Guaranty Insurors; ACE
Guaranty Corp.; Ambac Assurance Corp.; CDC IXIS Financial
Guaranty North America, Inc.; Financial Guaranty Insurance
Company; Financial Security Assurance; MBIA Insurance Corp.;
Radian Reinsurance Inc.; RAM Reinsurance Company; XL Capital
Assurance.
American Iron and Steel Institute.
Consumers for Fair Competition.
Consumers Union.
Electricity Consumers Resource Council (ELCON): A.E. Staley
Manufacturing Company; Air Liquide; Alcan Aluminum
Corporation; Anheuser-Busch Companies, Inc.; BOC Gases; BP;
Central Soya Company, Inc.; Chevron Texaco; Delphi Automotive
Systems; Eastman Chemical Company; E.I. du Pont de Nemours &
Co.; ExxonMobil; FMC Corporation; Ford Motor Company; General
Motors Corporation; Honda; Intel Corporation; International
Paper; Lafarge; MG Industries; Monsanto Company; Occidental
Chemical Corporation; Praxair, Inc.; Rockwell Automation;
Shell Oil Products; Smurfit-Stone Container Corporation;
Solutia Inc.; Weyerhaeuser.
IBEW.
MBIA Insurance Corporation.
Municipal Electric Utilities of Wisconsin.
National Alliance for Fair Competition, which includes:
Independent Electrical Contractors; Mechanical Contractors
Association of America; National Electrical Contractors
Association; Plumbing-Heating-Cooling Contractors-National
Association; Sheet Metal and Air Conditioning Contractors'
National Association; Air Conditioning Contractors of
America; Associated Builders and Contractors.
National Association of State Consumer Advocates.
Public Citizen.
Small Business Legislative Council (90 small business trade
associations).
U.S. Public Interest Research Group.
Wisconsin Public Power, Inc.
Sierra Club.

Mr. FEINGOLD. Madam President, I am pleased that the ranking member
of the committee, Senator Bingaman, is indicating positive remarks
about this amendment as well. I wonder if he may wish to make some
remarks in support at this time.
Mr. BINGAMAN. Yes. Madam President, first, I ask unanimous consent
that I be added as a cosponsor, if I am not already one, on the
amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BINGAMAN. Madam President, I compliment the Senator from
Wisconsin and the Senator from Kansas for proposing this amendment. In
my view, it is offered in the same spirit in which the earlier
amendment I offered related to mergers was offered, and also the
amendment by Senator Cantwell related to market manipulation.
I think all three of those amendments have somewhat the same purpose,
which is to strengthen this bill, to ensure there are necessary
protections for consumers, ratepayers, and for others who, in the case
of the Senator from Kansas, pointed out there are many contractors in
the private sector who feel an amendment such as this is essential if
they are going to be able to compete and not face some type of unfair
competition from companies that are part of holding companies that are
owned by utilities or that also own utilities.
Let me back up here and talk a little about the Public Holding
Utility Company Act, because that is the basic issue that causes this
amendment to come to the floor. As part of this bill, the proposal is
that we repeal the Public Utility Holding Company Act. That was in the
bill passed in the previous Congress--the repeal of that. I have
supported that but I have only supported it if it were clear that we
were replacing those authorities and those responsibilities for
regulation and oversight at the Federal level with other effective
authorities for oversight and regulation.
My conclusion is that the Domenici substitute, as it now stands, does
not put in place effective regulatory tools to ensure that at the
Federal level we can prevent the abuses that caused the Public Utility
Holding Company Act to come into existence in the first place.
There is a very useful article that I commend to all of the Senate in
today's business section of the Washington Post, written by Peter Behr.
It is called ``Energy Monoliths Could Return; Law Limiting Companies'
Reach Faces Repeal.''
Well, the law that limits a company's reach that this article is
talking about is the Public Utility Holding Company Act. As I say,
there is general agreement that the act has become an anachronism; it
is way too complex; that we need to modernize the Federal regulatory
scheme in regard to utilities. So the Public Utility Holding Company
Act should be repealed but it needs to be replaced with something that
also constitutes effective regulation. Let me refer to the chart. I
don't know if anybody can see it.
This tries to rapidly describe what is involved with the Public
Utility Holding Company Act, or PUHCA, jurisdiction. It basically says
that for a company which owns, as the chart shows, other affiliates--a
utility generating and marketing affiliate--there are real restrictions
on what that holding company can do with regard to any other
acquisitions of utilities. Essentially, you can acquire one more
utility, or you can own one utility, and then if you own any more than
that, you come under a very strict set of requirements that are
presently in the Public Utility Holding Company Act. Those requirements
should be repealed but we need something that is effective.
This amendment tries to do that and would do it in an effective way.
It accomplishes the same goal that I was trying to accomplish as part
of--or one of the two goals I was trying to accomplish in the merger
amendment I offered earlier yesterday, by requiring FERC to establish
real firewalls around the utility affiliate of a holding company to
prevent the assets of the utility from being used to prop up risky
diversification ventures. That is, you cannot use the assets of the
utility to support a contracting company, as an example, which is the
kind of thing that the Senator from Kansas was talking about having to
compete with.
I think the language of the amendment is extremely clear. It makes it
very clear that the Federal Energy Regulatory Commission shall
promulgate regulations, shall apply in the case of a transaction
between a public utility and an affiliate or associate company of the
public utility--and that is what the chart shows--where you have a
utility and another affiliate. It basically builds a firewall and gets
at the issue I was talking about when I offered my amendment yesterday
evening; that is, the public utility shall not cross-subsidize or shift
costs from the affiliate or associate company to the public utility. It
cannot encumber the assets of the public utility in order to prop up
some other business. That is only fair as far as the ability of the
other business to compete in the marketplace, but it is particularly
important as security for the ratepayers of that public utility.

There are an enormous number of examples. I went through several of
them yesterday. Let me refresh people's memories. There are many
examples in the last year--in recent months, in fact--where utilities
have been getting into other activities and have encumbered the assets
of the utility, and the ratepayers of the utility have been adversely
affected.
One example I mentioned yesterday, and I will mention it again
because it does relate to Kansas, is West Star. It is the largest
utility in the State of Kansas. It is owned by a holding company. West
Star came under scrutiny last year because of problems that it
encountered with nonutility affiliates.
West Star had invested in a number of unregulated ventures, including
a home security company, and the home security company did not do well.
So the holding company, which owned both the utility and the security
company, shifted $1.6 billion of debt from its unregulated companies to
the utility. It loaded these debts onto the utility, and then you have
essentially the ratepayers of that utility left having to pay $100
million per year because of the activities of unregulated affiliates
that had nothing to do with the utility itself.
Some would say this is something the States should handle. The Kansas
Corporation Commission began an investigation this last summer into
this situation. The Justice Department began an investigation. The
Federal investigation resulted in the indictment of the CEO of the
company for bank fraud, and the investigation of the Kansas Corporation
Commission, which

[[Page S10207]]

is the State regulatory agency, resulted in a dramatic restructuring of
the company to separate the utility from the unregulated companies of
the holding company.
Some would say: They solved it at the State level. Why should we be
having any authority at the Federal level? They solved it at the State
level for the period going forward, but they did not solve it prior to
this arrangement being put in place and, accordingly, the ratepayers
are paying $100 million a year to repay the debt that the utility has
acquired because of this activity.
One other example I mentioned yesterday that I will mention again is
Portland General Electric. Portland General Electric was in the
unfortunate position of having been acquired by Enron, and the Oregon
Public Utility Commission required that a number of conditions be met
before it approved that acquisition. That was helpful.
Frankly, they acted wisely in requiring those conditions. But even
that was not adequate to fully insulate that utility from the collapse
of Enron and from the collapse of the other many businesses in which
Enron was engaged. The fate of the parent company has had a very
adverse effect on the ability of Portland General to gain access to
capital markets. As I say, that is just one of many other examples that
can be cited.
This amendment Senator Feingold and Senator Brownback are offering is
extremely meritorious. It is an essential part of what we ought to be
doing if we are going to avoid getting back into a situation where
cross-subsidy is permitted. We ought to have a bright line requirement
that the Federal Energy Regulatory Commission ensure that cross-subsidy
will not occur in these acquisitions and mergers. We owe that to
ratepayers. We owe it to the public generally.
I hope very much we will adopt this amendment. I commend the authors
of the amendment for their proposal today.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, before I start, I ask the
distinguished sponsor of the amendment how much additional time does he
think he needs on his amendment. I am not pressing the Senator.
Mr. FEINGOLD. Madam President, I do not expect a great deal of time
at all. I would like the opportunity to respond to any comments the
chairman of the committee might make.
Mr. DOMENICI. Since it looks as if we will not be very long, does the
Senator from New Mexico know if there is another amendment ready on his
side since we are close to completing the debate on this amendment?
Mr. BINGAMAN. Madam President, let me check with the Democratic floor
leader. I will get an answer back on that question.
Mr. DOMENICI. I thank the Senator very much.
Madam President, I say to the author of the legislation, I very much
appreciate the fact that during these difficult times when we are
trying very hard to get so much done in a short period of time the
Senator came to the floor, put an amendment down, and, in his typical
manner, got to the point, and in short order is going to let the Senate
vote.
Frankly, what he is asking us to do is exactly the wrong thing for
the situation that exists today in the energy markets. There is an
article that was quoted from which is on all our desks:

Energy Monoliths Could Return.

It was quoted from, excepting on the second page there is an
absolutely succinct paragraph that this Senator believes is totally,
unequivocally correct. I quote three-quarters of the way down the
paragraph starting with the word ``repeal'':

Repeal could restore confidence in energy companies shunned
by shareholders after the Enron scandal and encourage badly
needed expansion of power transmission networks.
From the financial market standpoint, repeal--

And let me add ``of PUHCA,'' repeal of PUHCA--

would be the single most important part of the energy bill.
It certainly is what investors are looking for.

The problem with the amendment is that it probably will take the
intent in that paragraph, the indication of what most probably will
happen when PUHCA is repealed, and it will probably destroy it, wilt
it, make it very vulnerable, and we will not get the result. The result
is the need for huge injections of capital into the energy companies
because of what has happened to them in the past 18 months.
That is why it is good news that PUHCA is being repealed. That is why
it is bad news when an amendment comes along and says: This is just a
little 'ole amendment to make sure the electric companies keep their
money where it ought to be, that they ought not invest it anyplace
else, and that their boards of directors be governed by this statute,
the kinds of issues that tie up the potential of a company that is
involved in the utility business.
We have already given FERC in this carefully balanced bill the
enforcement power to make sure that the companies are properly
invested, to make sure they are taking care of their business and of
the stockholders' money and of the electrical business.
We have actually said that is a power FERC has. This title already
includes enhanced books and records authority for both State and
Federal regulators to ensure that ratemaking bodies have all the
information necessary they need for retail ratemaking, to ensure there
is no cross-subsidization or improper commingling of utility and
affiliate assets. That is what the authors of the amendment are worried
about, that if PUHCA is not there--and remember, everybody has said so
far, including my friend Senator Bingaman, we ought to get rid of
PUHCA. It is an unfair holding down of these companies by an old law.
Everyone wants to get rid of it except these two Senators want to say
now if we do, let's go back and put some more handcuffs on these
companies because we are scared, we are frightened, that they will do
wrong.
We are saying, if that is done, the very pluses, the positives, that
come from the repeal are going to be negated because what is being done
is not needed, and investment is going to be scared off.
The Domenici underlying bill says that when we get rid of PUHCA we
better put in something, although this job is principally the job of
States. When Senator Bingaman read about the two cases, in both cases
State commissions were involved in cleaning up the matter, but
nonetheless, we have put in here the Federal Government, FERC, is given
this authority in this particular area, because of PUHCA going away, to
make sure there is no improper commingling of utility and affiliate
assets.
There is more. In fact, the underlying amendment also says, with
reference to merger, acquisitions and dispositions, leasing, or other
transactions:

Will not impair the ability of the Commission or the
ability of the State commission having jurisdiction . . . to
protect the interests of consumers or the public.

And:

Will not impair the financial integrity of any public
utility that is a party to the transaction or an associate
company of any party to the transaction.

So it even says when PUHCA is gone, we have all of these entities
that will be worried about mergers and the like, but we put new
language in that I just read, which says, nonetheless, if we are
talking about merger, acquisition, or disposition, there are these
additional powers.
Frankly, I understand that an amendment which is, in fact, a bill--
that is the Domenici amendment--it is that big. I understand Senators
and their staff could read it and they could say, well, yes, we get rid
of PUHCA, and then somebody back home might tell them if you are
getting rid of PUHCA you better be sure you do so and so, and this
amendment could be given birth.
If one looks at this carefully, they will find it did not come to the
floor without the staff which worked on it helping the Senator make
sure we know, when we get rid of PUHCA, we have to do something to be
sure we have taken care of some problem children that might arise along
the way.
I want to repeat, this is not a little proposition. If it was, I
would accept it because these are very good Senators. But I know if I
took it, I would be sending the wrong signal to all of those companies
across this land that have reviewed this bill very closely, some small,
some large, some of them municipal, some of them co-ops. They have
looked at it carefully and they know we are through with PUHCA. I do

[[Page S10208]]

not want them to say, well, we got rid of one and they turn right
around and make it difficult for us to do what we ought to do, what we
can do, what we should do, to make sure we got all the assets invested
in our companies in these faltering days in terms of resources.
So I say to the two Senators, I wish that were not the case so I
could thank them and accept it, but I honestly do not believe those who
analyzed it did a careful job. No aspersions.
A better way might be that we looked at it carefully, we watched out,
and we were certain we protected the public and the consumers, those
who will take electricity, and indeed the stockholders, so the kinds of
things they are worried about will not happen.
I do not know what it means, but the horror cases they are speaking
of occurred while PUHCA existed. That is interesting, just as an
observation.
I yield the floor.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. First, I thank the Senator for the kind remarks. I do
not believe we disagree with the goals with regard to the underlying
amendment. In fact, I regard this, and I think Senator Brownback
regards this, as a friendly amendment; that is, an attempt to make sure
this dramatic change, the repeal of PUHCA, gets off the ground properly
and does not, in effect, throw out the baby with the bathwater.
My amendment does not attempt to repeal the repeal. I think if one
was listening to the remarks of the Senator from New Mexico they might
have gotten the impression we were sort of pretending we were repealing
PUHCA and then putting it back in effect. That is not in any way,
shape, or form what we are trying to do.
We are trying to address a very specific problem the Senator from
Kansas laid out very well, the cross-subsidization problem, when a
utility holding company owns other affiliated entities and the problems
that occur when those assets are moving back and forth in a way I and
many people think threatens ratepayers as well as investors.
Specifically, the Senator from New Mexico talks about the fact that
there are those who are poised and ready to invest in the utility
industry if changes are made, presumably such as the repeal of PUHCA.
It is my belief that is exactly what our amendment helps do. I think it
helps create a scenario that will make investors more positive rather
than less positive.
The Senator's argument about somehow our amendment will scare off
investors is really a 5-year-old argument. PUHCA repeal, without the
bottom-up regulation these ring-fencing provisions of this amendment
provide, will continue to keep capital away. We do not have some kind
of insurance for investors in utilities that the resources of those
utilities will not be spirited away to these affiliates. Then they will
not have the confidence in investing, and I want that investment to
happen.
Regulatory insulation, and that is what the Feingold-Brownback
amendment does, will help restore investor confidence. It will actually
help achieve the chairman's goal. Our belief, and our hope, is our
amendment will help bring order to what is a beleaguered sector, not
that it will wreak havoc.
Utilities provide an essential public service. Our amendment
insulates these utilities wherever they are in a corporate family. So
what we are doing is providing a clear distinction of what entities are
regulated or not.
Now, if we are looking at investments, that is what we want to see.
We want to know exactly what we are getting into. We want to know what
our dollars are going to be used for and it helps restore investor
confidence and consumer confidence, not the reverse.
This is a good amendment. It has strong bipartisan support. There
have not been a lot of Feingold-Brownback amendments over the years,
even though I thoroughly enjoy working with the Senator. I think what
it represents is a powerful commitment on the part of those of us who
are working on this to protect small businesses in our State.
I will not read again the list of the contractors and small business
organizations that support this effort, but it is the kind of
mainstream people that made my State. It is the kind of mainstream
people that made the Chair's State. It is the kind of mainstream people
that made the Senator from Kansas's State. They do not want to be
driven out of business by utilities able to somehow move these assets
back and forth through affiliates that are not properly regulated. That
is a reasonable request.

Even more importantly and in response to the Senator from New Mexico,
we are trying to make sure investors feel comfortable so it will help
the utility industry. The worst thing we can do is raise the specter of
another Enron. The phrase ``cooking the books'' dominated our headlines
a year ago, and our amendment is about making sure there will not be
any accusations or reality of cooking the books when it comes to a
utility and its affiliates, that they will have two separate sets of
books.
Yes, the Senator's underlying amendment is good. It allows FERC to
look at the books. If they look at the books and there are no standards
or rules about keeping the entities separate, what is the good? There
need to be some teeth in it. That is what our amendment does.
I suggest this is a reasonable, fairly modest amendment that will
make the Domenici substitute even better. I urge my colleagues to
support it.
I yield the floor.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Madam President, I will speak briefly to the Feingold-
Brownback amendment.
There is the illusion, or at least the concern, on the part of some
of our colleagues that the title we have before the Senate in S. 14
somehow creates a type of regulatory gap that I don't believe exists.
The chairman of the committee, in his thoughtful processes that brought
us to this amendment and the time he has spent working on it with
staff, would agree it does not exist.
Certainly Senator Feingold and others have reason to be concerned, as
do I. My constituency, my ratepayers of Idaho, for a period of time
spent a good deal more than they should have on their electrical costs
because of the dysfunctional markets in the State of California. Those
dysfunctional markets occurred with all of these laws in place that we
are talking about now changing. What is most important to recognize is,
those who misused the market are now suffering. Those who misused the
market are now being prosecuted. Those who misused the market to line
their pockets, I trust, are having their pockets stripped of ill-gotten
gold.
Why? Because our President has a Corporate Fraud Task Force, we have
a little organization called the FBI, we have the Federal Energy
Regulatory Commission, the Securities and Exchange Commission, the
Commodity Futures Trading Commission, and, yes, even the U.S. Postal
Service and the U.S. Attorney's Office that seek to look at and have
found what they allegedly suggest is postal fraud.
Whether it is Enron, whether it is Dynegy, whether it is Reliant or
whether it is El Paso Corporation, time and time again, and currently,
many of the major operatives within those organizational structures are
being brought before the Federal justice system and will be or are
being prosecuted because of what they are now alleged to have done or
are accused of having done as it relates to wire fraud, conspiracy,
manipulation, round-trip trading, all of those things we suggest ought
not happen.

What we have done in this title appropriately protects the consumers
of this country, but, as important, we protect the capital that comes
to this market to be invested, to create the generational capabilities,
the transmission capabilities, the pipeline capabilities, all the
things we need to interlock an energy system in our country and to
continue to make it as reliable as it has been in the past and as
reliable and abundant as it should be, hopefully at the least cost to
the consumer.
Clearly, the consumer got gouged. My consumers got gouged. There was
ill-gotten gold. We darned well ought to strip it from the pockets of
those who were out to steal it from the consumer. Tragically enough,
that stealing was going on long before this

[[Page S10209]]

amendment, under the current laws that some argue we ought to keep in
place, 1930 laws that have rendered themselves relatively obsolete in a
modern-day energy system.
We are asking that we have the right enforcement in place. We have
given FERC the authority it ought to have within the confines and the
limitations in which we believe it ought to operate. There is no
regulatory gap. Any reason to add to what we have done simply
frustrates the multibillion-dollar market, the revenues that will come,
the investment that will be created, toward once again creating the
finest electrical and energy market in the history of the world. That
is what we ought to have. That is what we need. Without that, our
investors and our economies look elsewhere, beyond the bounds of our
country where they can find stability of economy, stability of resource
and, most importantly, an abundant supply of energy.
In the absence of energy, in the absence of an abundant, least cost
supply of energy, our economy is in trouble. If our economy is in
trouble, most assuredly our men and women who want to find work in that
economy are oftentimes without work. We believe this is a full
employment bill that will create literally hundreds of thousands of new
jobs because of the stability it will bring.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, I was informed a while ago by my good
friend, the whip, Senator Reid, that as soon as we finish this
amendment--and I think we are finished; I am not quite sure whether the
proponents have finished--Senator Byrd wanted to speak. I ask Senator
Byrd, since he is here, if that is the case. And then I ask if I could
speak following Senator Byrd, if he has no objection. I ask that after
the distinguished Senator Byrd completes his remarks, the Senator from
New Mexico be recognized.
Mr. REID. Reserving the right to object--and I shall not object--the
Senator has that right. We are in the process of winding down debate on
the Feingold amendment. After Senator Byrd and the Senator from New
Mexico, the manager of the bill, we would be ready to vote on not only
the Feingold amendment but the two amendments that have been offered by
the Democratic manager of this bill.
I suggest, because these were debated yesterday, we should have 10
minutes equally divided prior to a vote on each of the Bingaman
amendments. While Senator Byrd is speaking, maybe the staff could
prepare a unanimous consent agreement to meet these steps that we need
to take to complete votes on these three amendments. We would at that
time be ready to offer another amendment.
Also, if Senator Byrd speaks for half an hour or 45 minutes, then we
will have these votes occur at the same time as Mr. Rumsfeld is here. I
don't know if that is what people want. At least half of the Senate
will be going to the Rumsfeld meeting--maybe even more. It is up to the
Republican leader, of course, what he wants to do with the Secretary of
Defense. But whatever the wish of the leader is, we will certainly go
along.
We are ready to vote on these three amendments.
Mr. DOMENICI. Madam President, if we could reduce the debate time
before each amendment. We don't need 10 minutes; 5 minutes would do.
Mr. REID. I would be happy to do that, although I have conferred with
Senator Bingaman. On one amendment he needs 5 minutes, and on the other
amendment he could use 2\1/2\ minutes.
Mr. BINGAMAN. In response, I don't believe I will use 5 minutes; I
will probably use closer to 3 minutes, but I would like to have the
ability to go on if I get warmed up.
Mr. DOMENICI. Let's prepare the unanimous consent request on all
three, with 5 minutes each, 10 minutes equally divided.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. Madam President, I want to bring this debate to a
close, but I want to quickly respond to a couple of comments from the
Senators from New Mexico and Idaho.
When the Senator from New Mexico was making his comments he talked
about the fact the State commissions, public service commissions, and
others would be able to sort of take care of these kinds of problems
that would exist in a post-PUHCA repeal era. I don't think that is an
adequate answer.
The fact is, as I mentioned in my opening remarks, in many cases
these are interstate utility entities, and it is that very fact that
has made it so difficult, prior to PUHCA, for there to be any
appropriate regulation at all. So we do need some kind of appropriate
law that homes in on this problem of utility holding companies and
affiliates and the cross-subsidization problem that exists. That is the
first point I want to make, that the State level is simply not going to
do it.
The second point relates to the comments of the Senator from Idaho.
The premise of the remarks of the Senator is that somehow my amendment
undoes the repeal of PUHCA. It does not do that. Our amendment is
necessary and helpful and good for investors and consumers and
ratepayers and small business, whether PUHCA is repealed or not. The
argument is a red herring. The argument has no relationship to the
issue of whether these provisions are needed.
Maybe we could put it this way: The Senator from Idaho believes that
a 1933 law known as PUHCA is no longer the right law for this time. We
are proposing what we believe to be the appropriate, measured, consumer
confidence and investor confidence provision for 2003, not 1935. So we
are accepting in the amendment the repeal of PUHCA, but we are adding
this provision that is necessary in 2003, not 1935.
The only other alternative, if we do not do at least our amendment,
is we are going to be returning to the environment that we are just
coming out of, the environment that everyone admits was a disaster for
consumers and that it destroyed consumer confidence and investor
confidence because of the recklessness and the cooking of the books
that went on all over this country, particularly in the utility
industry.
We have to make sure what we do here does not undercut the confidence
we want to increase for consumers and for investors. That is the
purpose of our amendment. We are not trying to undo the chairman's
primary purpose of his amendment.
I yield the floor. Assuming that is the end of the debate, I yield
the floor.
The PRESIDING OFFICER. The Senator from West Virginia.
Mr. BYRD. Madam President, I thank the distinguished Senator from New
Mexico. I thank him for the knowledge he brings to the Senate on many
matters. For these several years I have worked with him on the
Appropriations Committee, he has shown himself to be one of the most
knowledgeable persons on that committee and, with respect to energy, he
has shown time and again that he is well equipped to enter into debate
and to help to form good legislation, better legislation, or the best
legislation.
I have always found him to be one who is easy to work with. I enjoy
working with him and I compliment him for the time he has put in on
this matter that is before the Senate. He arrives at his conclusions
after due and deliberate examination, and he is a first-class
legislator.
Mr. DOMENICI. Madam President, I say thank you very much, Senator
Byrd. I greatly appreciate your remarks. It is always my pleasure to be
serving with you.
Mr. BYRD. I thank the distinguished Senator. He has distinguished
himself in many fields.
Mr. DOMENICI. Thank you.
Mr. BYRD. Madam President, on pleasant summer days, such as these, I
doubt that the average person worries too much about the intricacies of
energy policy. However, energy is the life's blood of our economy.
Obviously, a comprehensive energy policy is a critical underpinning for
a viable, strong nation.
And, there are real and growing concerns about the Nation's energy
security--about our teetering economy and about our growing dependence
on foreign oil. Coupled with these is an increasing need to protect the
environment and address global climate change. But instead of looking
for balanced and comprehensive solutions to our critical energy
problems, this administration drags its feet and deals with our energy
challenges by meeting

[[Page S10210]]

behind closed doors with select corporate contributors.
As is often the case, this White House offers shortsighted, silver
bullet solutions. But, in fact, there are just no silver bullet
solutions to a sound and comprehensive energy policy for the future.
There is no Lone Ranger approach to energy. There is no John Wayne
approach to energy. We have to consider the worldwide energy supply and
demand. We must be ready to invest in a range of policies,
technologies, resources, and institutional structures that can prepare
us for the future.
During the 2000 election cycle, the Bush campaign claimed that the
creation of a national energy strategy was one of its most important
priorities. But what they meant by that may not be what many people
thought they meant. Even as candidate Bush traveled the Presidential
campaign trail, the issue of energy often shared the stage with George
W. Bush and Dick Cheney, in part because both candidates were formerly
business executives with ties to the energy industry. My own home State
of West Virginia, where energy issues are very important, played a
critical role in pushing the Bush-Cheney team over the top in the
electoral college and handing the current administration the White
House.
But, after his election, the President seemed more interested in
seeking the advice of his corporate friends than developing a balanced,
comprehensive, far-reaching energy policy. It may be illustrative here
to review the background of some Bush administration officials. Vice
President Cheney served as the CEO of Halliburton. Secretary Norton has
lobbied for the oil, gas, and auto industries. The President's Chief of
Staff has served as the president and CEO of the American Automobile
Manufacturers Association. The U.S. Trade Representative, Robert
Zoellick, has served on Enron's Advisory Council. Even National
Security Adviser, Condoleezza Rice, was honored by Chevron with a
supertanker named after her. With such close connections to big
corporate donors, one has to wonder about who really influences the
energy agenda of this administration.
Upon taking office, the Vice President led a task force that hammered
out the new administration's energy strategy for the Nation. After
months of work, the National Energy Policy Development Group issued its
report in May 2001. It was praised in some camps, criticized in others.
The criticism arose because executives from Enron and other big
corporate contributors played a major role in the recommendations of
that task force. To many, the task force recommendations for a national
energy policy appeared to be little more than an industry wish list.
When the General Accounting Office and outside groups requested basic
information about the Vice President's task force, the White House
claimed executive privilege. Throughout the court battle which ensued,
the Bush Administration repeatedly claimed that the separation of
powers and executive privilege prevented them from releasing pertinent
documents. As a result, the credibility of the White House energy
strategy development is certainly strained, to say the least,
especially with regard to the oil industry.
I have been particularly concerned about our continued reliance on
foreign oil and our lack of commitment to developing domestic fuel
diversity. Tackling that growing problem requires a serious and multi-
faceted commitment, involving cooperation and coordination among many
players. But what the President seems to be proposing can be pretty
much boiled down to drilling for oil in the Arctic National Wildlife
Refuge, and exploiting the oil reserves under the hot sands near the
Tigris and Euphrates Rivers, in the Fertile Crescent--modern day Iraq.
U.S. domestic oil production peaked in the early 1970's, and, since
that time, our oil demands have far outstripped our supplies. But
instead of figuring out how to disentangle ourselves from foreign oil
dependence, the Bush administration seems to be intent on sinking our
energy fortunes deeper and deeper into the hot sands of old
Mesopotania--the hot sands of the Middle East. What is this
administration's total energy agenda? Is oil the only card in the
energy deck which the administration will play?
It certainly appears so. And one has to wonder just how that card is
being played. As the world witnessed in the war in Iraq, the
administration was much more interested in protecting, defending, and
developing Iraq's oil resources than it was in protecting Iraq's
cultural or social resources. Early on in the war, coalition forces
were ordered to make it a priority to protect the oil fields. Upon
their entry into Baghdad U.S. troops were ordered to surround and
protect Iraq's oil ministry. Despite clear warnings, coalition forces
left Iraq's priceless museums and other government institutions
defenseless. On top of that, U.S. forces failed to protect nuclear test
facilities. This is especially puzzling in light of the
administration's often stated concerns about dirty bombs and the
pilfering of nuclear material by terrorists. So where are our
priorities? What is the United States really up to in Iraq?
If the United States were really intent on developing a smart,
commonsense oil policy, we would be taking additional measures to
better balance our supplies from other nations; we would be carefully
using our strategic reserves to hedge against future foreign
manipulation; we would be promoting industrial energy efficiency, and
we would be nurturing all forms of alternative sources for our energy
and transportation needs, including coal, renewable, and biomass-based
sources.
I have proposed my own commonsense proposal to help mitigate the
growing global dependence on oil supplies from volatile regions. The
United States encourage the transfer of our own clean energy
technologies to other nations, especially developing countries who will
increasingly be buying into the same finite oil markets that we are
purchasing from. Such efforts are critical in order to satisfy our
energy security needs as well as to address related economic, job
creation, trade, and environmental objectives. The demand for oil from
other countries will be increasingly fierce, and we have only a narrow
window of opportunity ahead. Last year, the administration, at my
urging, released a plan for just such an initiative intended to help
open international markets and export U.S. clean energy technologies.
However, little, if anything, has been done to implement it. Where have
we seen this strategy before? The answer is, we have seen it virtually
everywhere with this administration--from homeland security to No Child
Left Behind.

Furthermore, the administration's Fiscal Year 2004 budget confirms
some of my worst fears. When it comes to domestic issues, the plan of
administration officials these days is about outsourcing, downsizing,
reorganizing, reducing, cutting, slashing, slicing, dicing, and carving
up the Federal Government. It is a tailor-made infomercial for the
benefit of all-too-receptive corporate donors.
The administration's energy budget is a sham, and its energy program
requests are no different. The Department of Energy cut $20 million for
the Clean Coal Power Initiative. The Department of Energy's oil and gas
research program was cut by more than 50 percent. In order to squeeze
enough dollars out of the budget for the President's new hydrogen
initiative, other critical energy programs were severely cut. Yet the
administration's hydrogen program is years away and cannot serve as a
substitute for conservation, energy diversification, or other key
energy programs. Moreover, a proliferation of ``new'' initiatives have
been announced by this administration that are purported to solve our
energy needs, especially for fossil fuels. We have the hydrogen
initiative, a carbon sequester program, FutureGen, a national climate
change technology initiative, and more. My question is: Can anyone
explain how these ``new'' initiatives will work together? Where is the
money to provide for all of this without compromising other important
efforts? The fact remains that there is no major increase in real
funding or commitment for energy programs, just a proliferation of
empty words from this administration. I do not believe we can treat our
energy illnesses with the administration's current budget prescription.
In the 107th Congress, both the House and Senate actually passed
comprehensive energy policy bills. After lengthy

[[Page S10211]]

debate in conference, important progress was made. A number of
compromises were struck, but in the end the conferees could not reach a
final agreement. This should come as no surprise.
In fact, this administration made no real effort to help get a
comprehensive, national energy strategy passed. President Bush
suggested that energy was a cornerstone of his administration's agenda,
but what did he do during the energy conference in the 107th Congress?
Nothing. Oh, his rhetoric may have sounded good on the campaign trail.
He tried to talk a good game, but when it counted, the administration
took a decidedly hands off approach.
This new Senate Energy bill, S. 14, the House Energy bill, H.R. 6,
and the White House's interest overall are intended to cater to the
administration's friends in industry. That is it. That is all. In its
present form, these energy bills are no victory for our country. They
are a victory for special interests and a text-book example of our
inability to set a long-term energy policy course. Now, we are on the
brink of another important opportunity squandered. While there are some
solid trees planted in the bill, this legislation will not produce the
diverse energy orchard we must have to meet our needs down the road.
The President and the Republican-controlled Congress are simply not
prepared to make the tough choices that the Nation needs for a viable,
long-term energy policy. How long will we wait?
The President would love a one-day Rose Garden ceremony and a 2004
campaign press release. But, given this administration's track record,
an energy bill would simply be another empty soapbox for this President
to stand on, as he has already demonstrated with the education soapbox,
the farm legislation soapbox, Afghanistan soapbox, and the Homeland
Security soapbox, and other soapboxes. The Congress has passed bills
and supported the administration's rhetoric, but then the necessary
resources to carry them out never materialize. This is the same fate
that awaits an energy bill this session.
It takes leadership and it takes hard work to move forward in a
responsible, balanced, and intelligent way on energy policy. Yet this
administration makes do with a cheap knockoff. It looks like the real
thing, but it is a fraud and a fake. It is much like cotton candy. At
first glance, it may look good, but there is just no nutrition. In
reality, it is just puffed air.
In the last 5 years, I have worked hard to help develop a balanced
and bipartisan package of provisions to advance our national energy
policy goals--provisions that could go a long way toward addressing
both the near- and long-term energy needs of our Nation, while also
providing numerous benefits both at home and abroad. These provisions
garnered bipartisan support in the Senate Energy bill in the 107th
Congress, including clean coal, climate change, international
technology transfer, and other important provisions. Together, these
initiatives represent a bold new enterprise--stepping stones along a
21st century energy pathway.
Yet the administration seems intent on just blocking many of these
bipartisan ideas. For example, in a May 8, 2003, statement on the
Senate Energy bill, the White House stated, in part:

The Administration is not convinced of the need for
additional legislation that would attempt to limit or direct
U.S. global climate change, and will oppose any climate
change amendments that are inconsistent with the President's
climate change strategy . . . we urge the Senate to allow . .
. the President's strategy to go forward unimpeded.

Well, I continue to ask, just what is the President's strategy--
cotton candy?
Last session I introduced legislation with Senator Ted Stevens of
Alaska that would allow the United States to deal more easily with the
complex issues involved in climate change. The amendment to be offered
by Senator Bingaman is based on last year's Senate-passed provisions.
It would create a comprehensive strategy based on credible science and
economics to guide American efforts to address climate change issues in
our own backyard and around the world. This amendment also would
establish a major research effort to invent the advanced technologies
that we will need to effectively reduce greenhouse gas emissions that
contribute to global warming. We must develop a commonsense package of
technology, science, policy and other market-based measures to address
this growing global problem. And it is growing. The question is what
are we waiting for?
Specifically, the Bingaman amendment includes provisions that would
commit more than $4 billion during the next decade to vastly expand
U.S. research into technology that could help to address the problem of
global climate change. The amendment provides for the creation of a
more focused administrative structure within the Federal Government,
including an office in the White House to coordinate and implement a
national climate change strategy. We cannot continue to just ignore
this problem.
This amendment does not mandate a reduction of emissions by American
companies. Instead, this package places the Nation on a commonsense
glidepath that is both achievable and sustainable. It provides the
framework to address the long-term goal of stabilizing atmospheric
greenhouse gas concentrations by working with other nations, while
leaving the actual technology and policy decisions to energy experts
and the marketplace.
China, Brazil, and India, among other states, will soon surpass the
industrialized world in emissions of greenhouse gases. It is important
that we work in coordination with these nations to reduce their
emissions at an early stage. American know-how, technology, and ideas
can help to lead to the implementation of a range of marketable clean
energy technologies, not just in the United States, but also around the
world.
It is time for real action. A cherry-picked energy plan based on
soliciting big industry campaign contributions is a bankrupt policy. It
takes this Nation nowhere, and it puts our future at risk.
We cannot continue energy programs and budgets if we ever hope to
meet our long-term needs. We cannot continue forestalling the
development of a long-term energy strategy with a phantom plan. The
Nation is at a turning point. Our energy policy needs must stop being
dominated by a crisis management policy. We must work to enact
appropriate energy legislation so that we avoid the consequences of our
long failure to respond. We cannot wait for the next energy crisis or
the next spike in natural gas prices--or the next California
electricity debacle. We cannot just go out and seize another oil rich
country in order to solve our energy problems. We must enact bipartisan
energy legislation that will deliver a thoughtful and reasoned energy
package.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. THOMAS. Madam President, I hope we are moving toward the
opportunity to vote shortly. But, in the meantime, I cannot resist
making a few comments.
I don't see it at all the way the Senator from West Virginia has
described it. Over the last couple of years, I have worked very hard to
bring an Energy bill before the Senate. I believe we have an Energy
bill before us that is very broad, that is very encompassing, and that
is very balanced. That is what we have needed to do.
We have been working now for 2\1/2\ years, and we generally have not
been able to get over the obstacles to be able to get it completed, and
I think I understand why. But it is time for us to decide: How
important is it for us to have an energy policy?
The first thing this administration came up with when it came into
office was an energy policy with a direction, and we have been fooling
around with it ever since.
Last year, we couldn't even get it through the committee. We had to
go right to the floor. We went to the conference committee and worked
very hard. We did not succeed.
But this is a balanced approach. We are talking about an opportunity
to have conservation, which is one of the things we need to do in
energy. We are talking about the opportunity to have alternative
sources of energy, which we will come to over a period of time.
I remember very much a number of years ago somebody coming to Casper,
WY, talking about energy, saying: We have never run out of energy
because we have always found a new source.

[[Page S10212]]

Well, we probably will, but we need to be doing that in research.
The bill involves research in a variety of different areas that
relate to energy. What else could you do besides research? There is a
very great emphasis on hydrogen in this administration and doing
something that will move us to a different kind of energy opportunity.
Coal might be the basis for that opportunity. It would be much more
economical to move.
Lots can happen in the future. What we are faced with doing in this
bill relates to the fact that the energy industry has moved faster than
we have moved. This is not a matter entirely of setting a future; it is
a matter of catching up with what has already been done. And much of
that is evidenced in the electrical industry.
Years ago everything we did was designed to have an energy company
and an electric company that had their own distribution. They did their
own generating. It was all in one area. That is not the case anymore.
Thirty percent of electrical energy is generated by merchant
generators. That energy has to be moved from the generator to the
market. It is quite a different situation. It is already there, yet we
seem to resist talking about it. We seem to resist accepting it. We
seem to resist making that an advantage for us rather than a problem,
and we have an opportunity to do that.

One of the other issues that is emphasized is domestic production, of
course. It has already been pointed out that some 60 percent of oil
comes from overseas. We are talking about the possibility of shortages
of natural gas. I can tell you something: We have a lot of natural gas
right here in this country, much of it in the west where I am from. We
could be producing a great deal more if we had the policy to go ahead
and do that, if we had the opportunity to have multiple use of lands to
protect the environment and produce at the same time, to be able to
have the transportation to move it to the market. These are the things
that are there and available. That is what this bill is about.
To suggest that this bill does not have any substance to it is simply
not right. It is a good excuse if you don't want to vote for it. But
the fact is, there is substance. The fact is, it does move us forward.
The fact is, we need to move it on.
We are talking now about an electric title, which I think is crucial.
We were just upstairs talking about what energy does for jobs. Remember
the economy started to turn down in the year 2000. We have been working
at all kinds of things ever since. Here is one that has probably more
of an immediate impact to jobs than anything else we could do, not only
in production but, of course, it has an impact on all business
activities.
How important is electricity to us? Everything we do--travel,
gasoline, natural gas, all these things. So I guess it is sort of
frustrating to hear there is no basis to this, that we don't need to
hurry doing this. Yet the fact is, it is probably one of the most
needed things we have had for a number of years. And yet we continue to
find excuses for not going forward.
I hope we can move. We can complete this bill this week. We have
already discussed almost all these items for a long time. It is time to
move, and I hope we do.
I yield the floor.
The PRESIDING OFFICER. The Democratic whip.
Mr. REID. Madam President, I commend Senators Cantwell and Bingaman
for their amendments to the electricity title that will, in effect, ban
all forms of market manipulation and add important merger provisions. I
am terribly disappointed that the Cantwell amendment failed by a vote
of 48 to 50. She did an extremely fine job of laying out this program.
I am sorry it didn't pass. It should have. I think there will be some
Senators who voted against her amendment who will regret having done
so.
We know that the energy crisis in California in 2001 resulted from
market manipulation and price fixing. People of the State of Nevada
were severely hurt by this manipulated electricity market, as were
consumers all over Western States.
The State of Nevada has just completed the most contentious
legislative session in the history of the State. The Governor of the
State, after the regular session ended, had to continually call special
sessions. I don't really know how many he called--two, three, four,
five--but they were there for a long time. Finally, because nothing
could be completed, the Governor filed a legal action with the Nevada
Supreme Court. After the Supreme Court acted, action was taken. The
provision in question that went before the supreme court is whether the
Nevada Legislature had to pass tax increases by a two-thirds vote. The
Nevada Supreme Court said no and they said yes, but regardless of that,
I spoke to the majority leader from Nevada, Bill Raggio, today. He said
he made the determination that it was going to pass by two-thirds, and
both the assembly and the house ultimately did that.
The reason I mention the difficulty they had is because of the
tremendous burden the State of Nevada had in not having enough revenues
to meet the projected deficit, $1 billion in the State of Nevada, much
of which was caused by the problems that developed in California with
manipulating the energy prices there.
The State of Nevada had other problems: unfunded mandates that we
have passed on to them with homeland security and Leave No Child
Behind, which has left a lot of kids behind. The fact is, the
electricity rates had a lot to do with that very difficult legislative
session. That session took a long, long time to complete. Since 1999,
electricity rates in the Las Vegas area have increased by more than 60
percent. Over the same period, natural gas prices across Nevada have
doubled. It is a sad state of affairs that some seniors, especially,
and low-income families in Nevada are being forced to go without
prescription drugs or cut back on food in order to pay their
electricity rates. That is a fact.
The bills that come from these increased electricity rates are a real
burden, as the Senator from Washington, Ms. Cantwell, mentioned today.
She read specific letters from people in the State of Washington where
these prices were preventing them from getting proper medical care and
having the ability to pay their rent. The same applies, of course, in
Nevada.
These wild price increases in electricity were painful to homeowners.
They also made it hard for businesses to expand or make long-term
plans. Nevada consumers were being asked to pay for the same very
expensive long-term contracts negotiated by utilities in 2001 at the
time of the California energy crisis. It cost Nevada ratepayers
hundreds of millions of dollars.

Nevada Power, the power company that serves the Las Vegas area and
southern Nevada, has flirted with bankruptcy. It is rated at junk bond
status where in the past it was one of the strongest utilities in
America. What does this junk bond status mean? It means the cost of
money for the utility to purchase power for Nevada is very high.
The weakened financial condition of our utility is a burden to our
ratepayers. I can remember during some of this time that I had to call
the Governor of California to see if there could be some arrangement
made so the power that the people of the State needed coming from
California could be provided. I had to have a signoff from the Governor
of California. This was difficult. They were in deep distress but their
distress was passed on to Nevada.
The weakened financial condition of our utility is a burden to our
ratepayers and the taxpayers of the State of Nevada. After Enron was
exposed for its unfair and unethical practices, whether it was Fat Boy
or Get Shorty, all these practices had an impact in Nevada. After these
unfair practices were exposed, a subsidiary of Enron stopped delivering
electricity to Nevada Power because of its weakened financial
condition. Then adding insult to injury, this Enron subsidy sued Nevada
Power for the losses it might incur if it couldn't sell the power at
the contract price.
In a recent ruling, FERC upheld the contract the utility signed at
these exorbitantly high prices. Again, our ratepayers were not
protected from abuses during the California energy crisis. It is not
consistent with rational thought that FERC could do this but they did
it.

[[Page S10213]]

As the western energy crisis and Enron's collapse made clear,
electricity markets are ripe for manipulation unless clear safeguards
are put in place and companies are held accountable. The electricity
title should ban all forms of market manipulation and contain concrete
penalties for those that break the rules. The electricity title should
strengthen FERC's authority to review public utility mergers for
electric and gas--there will be an amendment that will focus just on
gas in this regard--holding company mergers and generation assets, and
ensure any consolidations are in the public interest.
I extend the appreciation of the entire Democratic caucus for the
work done by the manager on our side, Senator Bingaman. Senator
Bingaman is an intelligent Senator. He is experienced. He has done
everything he can to help this bill be a bill that is a good bill which
is indicated by the tremendous amendments he has filed that we will
vote on in the next few hours.
Last year Democrats worked with Republicans to pass energy
legislation by a vote of 88 to 11. This vote was to strengthen our
national energy security, safeguard consumers and taxpayers, and
protect the environment. The heavy vote is an indication that we were
able to accomplish that.
That vote came after 24 hours of debate over the course of 8 weeks,
and only after the Senate dispensed with 144 amendments.
Madam President, the distinguished Senator from Tennessee, the
majority leader, has said we have been on this for 16 days. He has to
say that with tongue in cheek. Many of those days have been Fridays and
Mondays, when everyone knows when you turn to a bill for a day or two
and it is a Friday or Monday, that is like turning to nothing. It is
filler. Nothing happens. Most of those days the managers weren't even
here. They said we are going to energy on short notice. The 16 days the
distinguished Senator from Tennessee talked about really is more like 7
or 8 days.
As we know from past experience, the effort to craft comprehensive
energy policy involves working through a series of complex issues. We
are currently working through one of the most complex issues right now,
electricity policy. These issues take time to debate, and we have a
duty to the American consumer to ensure that we carefully consider what
our energy policy will look like in the future. We have spent
significantly less time debating the Energy bill this year. We have
considered 42 amendments and held 15 rollcall votes. We have spent less
than 7 days on this bill, considered 102 less amendments, and conducted
20 less rollcall votes than last year. There are a number of issues
outstanding: Electricity; global warming; renewable portfolio standard;
CAFE standards, on which we have debated two amendments but others need
to be considered; hydroelectric dam relicensing; nuclear energy;
natural gas; energy efficiency incentives; wind energy; carbon
sequestration; exploration of the Outer Continental Shelf, and the
energy tax package, just to name a few.
These amendments offered on this Energy bill dealing with electricity
are not specious amendments, they are substantive amendments. The
Cantwell amendment vote was 48 to 50. Without arm-twisting on the other
side, Senator Cantwell would have won. These are serious amendments
people wish to offer. They are not single amendment issues. I expect
there will be several amendments on each subject. We ended with a good
product last year when we let the Senate work its will on the
legislation. We need to spend adequate time this year to get a similar
result.
I see the Senator from Florida on the floor. My understanding is that
he wishes to speak.
Mr. THOMAS. I wonder if it would be possible to propound this
unanimous consent request.
Mr. REID. Madam President, the Senator has been here all day. It is
my understanding that the Senator wishes to speak; is that right?
Mr. NELSON of Florida. Yes, for perhaps only 3 or 4 minutes.
Mr. REID. I thought the Senator had longer to speak.
Mr. NELSON of Florida. I will accommodate the leadership. Whatever is
the pleasure of the leadership.
Mr. DOMENICI. Madam President, the Senator has no right to decide who
speaks. They have to seek recognition.
Mr. REID. Madam President, as I have said several times during the
day, and yesterday and the day before, I have the greatest respect for
the Senator from New Mexico. But the Senator from Florida, who is
gracious and said he would take just a few minutes, has a right to
speak as long as he wants to before we have votes on this.
Mr. THOMAS. The Senator from Wyoming was on the floor before he was,
however.
Mr. REID. I have the floor.
Mr. DOMENICI. The Senator cannot dole out the time. He has no right
to dole the time out to other Senators, Madam President.
Mr. REID. Madam President, I have the floor, and I have the right to
speak about anything I want to speak about. The fact is, the Senator
from Florida has been here several times today.
Mr. DOMENICI. Madam President----
Mr. REID. I have the floor, Madam President. I have the floor.
The PRESIDING OFFICER. The Senator is correct.
Mr. REID. The Senator from Florida has been here several times during
the day. He has a right, prior to our entering into this unanimous
consent agreement, to speak for as long as he wants. He said he chooses
not to do that, and that is in keeping with the courtesy that this
junior Senator from Florida extends to everybody. I want to make sure
he doesn't have hurt feelings and that he has the opportunity to speak.
He knows the rules of the Senate and he has a right to speak if he
wishes.
Having said that, I am willing now to have this unanimous consent
agreement proffered.
Mr. THOMAS. Madam President, I ask unanimous consent that there now
be the following debate in relation to the listed amendments: Bingaman
No. 1413, 10 minutes equally divided in the usual form; Bingaman No.
1418, 10 minutes equally divided in the usual form. I further ask
consent that following the debate, the Senate proceed to a vote in
relation to amendment No. 1413, to be followed by a vote on amendment
No. 1418, to be followed by a vote in relation to the Feingold-
Brownback amendment No. 1416, provided there be 2 minutes of debate
equally divided prior to each vote.
Mr. REID. Madam President, reserving the right to object, I ask if my
friend, the distinguished Senator from Wyoming, would modify his
unanimous consent request to allow the Senator from Florida, prior to
this kicking in, to speak for up to 5 minutes.
Mr. THOMAS. I have no objection to that.
The PRESIDING OFFICER. Is there objection?
Mr. BINGAMAN. Madam President, not wishing to object, I just indicate
that I did not intend to ask for 10 minutes of debate on each of my two
amendments, and then in addition ask for 2 minutes equally divided. I
just intended to have some time to refresh people's memories of what
the two amendments were, since they were proposed and debated
yesterday.
As far as I am concerned, once I have had a chance to describe my
amendment, and there has been any discussion in opposition, we can vote
on the first of the Bingaman amendments.
Mr. REID. Madam President, I ask the Senator to further modify the
request to eliminate the 2 minutes of debate prior to the vote.
Mr. THOMAS. That will be fine.
The PRESIDING OFFICER. Is there objection to the request as modified?
Without objection, it is so ordered.
The Senator from Florida is recognized.
(The statement of the Senator from Florida, Mr. Nelson, is printed in
the Record under ``Morning Business.'')

Amendment No. 1413

The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Madam President, as I understand it, I now have 5
minutes to describe the first of the two amendments I have offered to
the electricity title of the bill.
Let me make the obvious point at the beginning of my description, and
that is that the amendment tries to do two basic things. It proposes
language which would ensure that someone at the Federal level--in this
case, the Federal Energy Regulatory Commission--has jurisdiction to
review purchase and sale of generation companies

[[Page S10214]]

and generation assets, the companies that actually produce the
electricity about which we are talking and which we have all come to
expect to get when we turn on the switch and see the room light up.
We ought to have someone with authority over that because under the
Domenici substitute as it now is, nobody has authority at the Federal
level. It is not realistic to suggest the States can handle that
problem. They cannot. There is no prohibition in law, and there will be
none under this proposal, to one company acquiring all the generation
in one particular region or one company acquiring all the generation in
one part of the country. We should have someone reviewing the
acquisitions of that generation capacity to be sure that ratepayers are
looked out after. That is the first thing the amendment does.
The second thing the amendment does is to prohibit cross-subsidy
between utility companies and affiliated companies that may be in the
same general holding company. We are eliminating the Public Utility
Holding Company Act, so there is going to be no restriction as provided
under that act. We need to be sure that cross-subsidy does not occur.
I have an article dated December 26 of last year in the Wall Street
Journal which does a very good job of pointing out the problem that
needs to be fixed. It says:

Energy companies burned by disastrous forays into
commodities trading and other unregulated businesses are
increasingly seeking to pass some of the financial burden on
to their utility units. This could lead to higher electricity
rates for consumers in coming years.

Then it goes on to say:

Utilities are being nudged to buy assets from affiliates to
make loans to down-at-the-heels siblings or pass more money
to their parent companies.

The article goes through a series of examples of how this is
happening.
One example I thought was particularly constructive was Duke Energy.
In July of 2001, a Duke accountant contacted regulators complaining
that expenses generated by unregulated parts of the company were being
transferred to the books of Duke's utilities.
We need a capability at the Federal level to protect the ratepayers
and to ensure that does not happen. We do not have that in the
underlying Domenici substitute. The underlying substitute does say that
the Commission shall look out to be sure the public interest is served,
and that is useful. That, unfortunately, is very general.
What we need in the law, I firmly believe, is a bright line
requirement that in order for these kinds of acquisitions and sales to
occur and to be approved, the Federal Energy Regulatory Commission
ought to determine that there is not going to be a cross-subsidy as a
result, that utilities will not be loaded down with debt from
nonutility companies held by the same company. We need to keep the
protection in the bill.

Utilities are a different kind of business. It is important that the
lights turn on when we flick a switch. It is important that other
utilities function. In this case, in this electricity title, we need to
be sure that ratepayers are adequately protected.
I am persuaded that this amendment will strengthen the bill. I hope
very much my colleagues will support it. It is exactly the same
language we had in the bill last year, and last year there was an
effort to delete the language which I am offering as a second-degree
amendment, and that effort lost in a vote of 67 to 29. So a majority of
the Senate is on record supporting the language I have proposed as an
amendment to the underlying Domenici substitute. I hope Members will
support the amendment. It will strengthen the electricity title. I very
much believe it is good public policy and will serve us well in the
years ahead when some of these problems recur, as I fear they will.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, how much time do I have?
The PRESIDING OFFICER. Five minutes.
Mr. DOMENICI. Madam President, I wish to make a point in case there
are people observing the Senate. Senator Nelson from Florida indicated
he had been waiting a long time--maybe all day--to be heard. There are
a lot of Senators all day long who would like to come to the floor and
be heard. The Senate is not the place where we just come down to the
floor and automatically, if we come here, we ought to be heard. We have
business, and we have rules. I am glad the Senator found time and we
allowed 5 minutes and we allowed Senator Byrd 30 minutes, but we are
engaged in a bill we are trying to pass.
I had a lengthy discussion with my friend from Nevada, and I have no
doubt he wants to get this bill finished. I thank him for his
willingness to move along. We will have another amendment ready pretty
soon.

My objection to the Bingaman amendment is very simple. He alludes to
last year and what happened with amendments such as his last year.
There was no alternative last year. There is an alternative this year.
It is the underlying electricity bill, which clearly protects the
citizens, the users, and all of those concerns about mergers.
The merger review in our section is supported by groups such as the
National Rural Co-ops, the rural power people, and many others. If, in
fact, we did not have protection in this area with reference to
gobbling by merger, obviously they would not be for this underlying
bill. So I oppose this amendment because we do not have to expand
FERC's merger authority. They have merger authority.
Under current law, electric merger departments are heavily regulated.
FERC, the Department of Justice, and the Federal Trade Commission must
review proposed mergers for their impact on competition. States also
review proposed mergers. Expanding FERC's authority to cover the
acquisition of generation facilities is unnecessary. We have plenty of
merger authority if that is what we are worried about. We are getting
rid of undue regulation. There is no need to impose more.
Further, changing FERC's review standards will impede efficient
transactions, and we do not need that today, either.
So while I have great respect and admiration for my friend, I believe
the electricity bill that is pending before us, which has been
carefully put together, has broad support all based on the fact that it
fits all the pieces together properly. It should be left alone. We do
not have to add more merger review layers.
I yield back the remainder of my time.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Madam President, my understanding is that at this
point, under the unanimous consent agreement, I am allotted 5 minutes
to talk about my second amendment. Is that accurate?
The PRESIDING OFFICER. The Senator is correct.

Amendment No. 1418

Mr. BINGAMAN. Madam President, I will describe this second Bingaman
amendment which was offered last evening. It was offered at a time when
very few Senators or their staffs were in their offices and were not
following this issue, I am afraid. The amendment tries to clarify a
point in the bill that I think is very important.
Senator Domenici's substitute contains a delay in the issuance of
FERC's standard market design rulemaking and it delays it until July of
2005, and that is not of concern. I accept that. Many believe the rule
goes too far, should be dramatically modified, changed or completely
abrogated, but others think we should go ahead right away. He has
decided to put it off until July of 2005. So I am not involved in that
in my amendment.
My amendment leaves the delay of the standard market design rule in
place so it will still be delayed until July of 2005. However, in an
effort to prevent FERC from renaming its rule, I believe that was the
purpose that Senator Domenici and his staff had in an effort to keep
FERC from renaming its rule and issuing that same rule, or something
very close to it, under a different title, the bill would prohibit any
rule or order of general applicability on matters within the scope of
the rule. I think the clear meaning of that

[[Page S10215]]

language is that FERC could not issue a rule or order a general
applicability on any issue that is dealt with in the proposed standard
market design for 2 years from now.
Standard market design covers a world of issues. One example, FERC
currently has a rule in process related to interconnections to the
transmission grid. No matter what that rule said, FERC would be
prohibited from issuing that rule, as I read this language. I do not
think that was the intent of my colleague from New Mexico or others who
worked on this bill.
There are even rules that the Commission is required to issue by
provisions in the bill. We have various provisions in other parts of
this bill that say the Federal Energy Regulatory Commission shall issue
an order on this issue, the Federal Energy Regulatory Commission shall
issue an order on this subject. The bill requires rules on mergers, on
transmission access by public power entities, on participant funding,
and on other matters.
We are in the ironic position of having this one provision which says
an order cannot be issued, a general applicability, on any subject that
is covered by standard marketing design and at the same time we are
saying you have to go ahead and issue orders of general applicability
in these other areas.
So I am trying to get that clarified. I do not believe we are in
disagreement on the substance but I do think it is important that we
provide clear language or else we will be shooting ourselves in the
foot.
The amendment I am offering says we would not want FERC issuing any
final rule or order of general applicability establishing a standard
market design. I think that is what we are trying to do. That is all my
amendment does is to clarify that is what we are trying to do. I hope
everybody will support it. I think it will make very clear that FERC
will be able to go ahead and do the work that it is required to do in
the next couple of years, between now and July of 2005. If we have
another crisis such as we have had out in California or out in the west
coast, we are going to be expecting FERC to issue orders of general
applicability. They should be doing that. They should not be issuing a
standard market design, and I am not suggesting they should, but they
should have the authority to issue orders of general applicability and
that is exactly what my amendment would give them.
I hope very much my colleagues will support the amendment and we can
improve the bill by doing so.
I yield the floor.
The PRESIDING OFFICER (Mr. Chambliss). The Senator from New Mexico.
Mr. DOMENICI. Mr. President, one of the most difficult negotiations
in this bill was getting the language that prohibited the finalization
of SMDs until July 1, 2005. The occupant of the chair knows that. That
is what we have been talking about. Other Senators wanted a longer
time. Some wanted a shorter time. Well, Senator Bingaman changes the
language surrounding that July 2005 agreement. Frankly, I would be
letting down all of those different groups that worked together to
negotiate the language that said the finalization of SMDs will be
delayed until July 1, 2005; by changing the words around it, all kinds
of groups will be saying we have let them down; we changed what we
agreed to.
In other words, I regret to say that the exact words surrounding this
2005 letter expansion are binding. Senator Bingaman wants to clarify it
one way. There will be a whole group of people who worked on it saying,
well, I did not want it clarified that way. I wanted it clarified
another way.
The point is, it will work like it is. It might work like he wants it
to work but the problem is we agreed to these words. Believe me, I am
not agreeing to words just for words. They will work. It is just that
the distinguished Senator would like to be more precise, more specific,
his way. In doing that, he puts this Senator, who has worked this out
with all of these other people, in a bind that if I say, yes, let's
change it, then we are going to have telephone calls besieging Senators
all over saying vote no; the senior Senator from New Mexico is not
doing what he told us he would do.
Now, I regret that but that is just the result of the way we do
things. I am very proud of the words, the date, and the negotiation. I
do not lose a lot of Senators on that language and that date. Maybe six
or eight wanted more time but we got a pretty good deal for almost
everybody. So I just cannot take the risk. I am sorry.
With that, I do not need any more time. I yield back any time I have
remaining.

Vote on Amendment No. 1413

Mr. DOMENICI. I move to table the first Bingaman amendment, which is
the pending subject matter, and ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second. The question is on agreeing
to the motion.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. REID. I announce that the Senator from Delaware (Mr. Biden), the
Senator from Massachusetts (Mr. Kennedy), and the Senator from
Massachusetts (Mr. Kerry) are necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 53, nays 44, as follows:

[Rollcall Vote No. 313 Leg.]

YEAS--53

Alexander
Allard
Allen
Bennett
Bond
Breaux
Brownback
Bunning
Burns
Campbell
Chambliss
Cochran
Coleman
Cornyn
Craig
Crapo
DeWine
Dole
Domenici
Ensign
Enzi
Fitzgerald
Frist
Graham (SC)
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Kyl
Landrieu
Lincoln
Lott
Lugar
McCain
McConnell
Miller
Murkowski
Nelson (NE)
Nickles
Roberts
Santorum
Sessions
Shelby
Smith
Specter
Stevens
Sununu
Talent
Thomas
Voinovich
Warner

NAYS--44

Akaka
Baucus
Bayh
Bingaman
Boxer
Byrd
Cantwell
Carper
Chafee
Clinton
Collins
Conrad
Corzine
Daschle
Dayton
Dodd
Dorgan
Durbin
Edwards
Feingold
Feinstein
Graham (FL)
Harkin
Hollings
Inouye
Jeffords
Johnson
Kohl
Lautenberg
Leahy
Levin
Lieberman
Mikulski
Murray
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Sarbanes
Schumer
Snowe
Stabenow
Wyden

NOT VOTING--3

Biden
Kennedy
Kerry
The motion was agreed to.
Mr. THOMAS. Mr. President, I move to reconsider the vote.
Mr. CRAIG. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. FRIST. Mr. President, I ask unanimous consent that the next two
votes in this series be limited to 10 minutes each.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. FRIST. Mr. President, there will be additional votes this
evening. We are going to stack these two rollcall votes at 10 minutes.
The chairman and ranking member have been here since 9 o'clock this
morning. They have been working hard. We will continue tonight. We will
finish the electricity amendment today. Therefore, Members can expect
votes into the evening.

Vote on Amendment No. 1418

The PRESIDING OFFICER. The question occurs to the amendment of the
Senator from New Mexico.
Mr. THOMAS. Mr. President, I move to table the amendment and I ask
for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to the motion. The clerk will call the
roll.
The assistant legislative clerk called the roll.
Mr. REID. I announce that the Senator from Massachusetts (Mr.
Kennedy) and the Senator from Massachusetts (Mr. Kerry) are necessarily
absent.
I further announce that, if present and voting, the Senator from
Massachusetts (Mr. Kerry) would vote ``nay.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 54, nays 44, as follows:

[[Page S10216]]

[Rollcall Vote No. 314 Leg.]

YEAS--54

Alexander
Allard
Allen
Bennett
Bond
Breaux
Brownback
Bunning
Burns
Campbell
Cantwell
Chambliss
Cochran
Coleman
Cornyn
Craig
Crapo
DeWine
Dole
Domenici
Ensign
Enzi
Fitzgerald
Frist
Graham (SC)
Grassley
Hagel
Hatch
Hollings
Hutchison
Inhofe
Kyl
Landrieu
Lott
Lugar
McCain
McConnell
Miller
Murkowski
Murray
Nelson (NE)
Nickles
Roberts
Santorum
Sessions
Shelby
Smith
Specter
Stevens
Sununu
Talent
Thomas
Voinovich
Warner

NAYS--44

Akaka
Baucus
Bayh
Biden
Bingaman
Boxer
Byrd
Carper
Chafee
Clinton
Collins
Conrad
Corzine
Daschle
Dayton
Dodd
Dorgan
Durbin
Edwards
Feingold
Feinstein
Graham (FL)
Gregg
Harkin
Inouye
Jeffords
Johnson
Kohl
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Mikulski
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Sarbanes
Schumer
Snowe
Stabenow
Wyden

NOT VOTING--2

Kennedy
Kerry

The motion was agreed to.
Mr. CRAIG. Mr. President, I move to reconsider the vote.
Mr. BOND. I move to lay that motion on the table.
The motion to lay on the table was agreed to.

Amendment No. 1416

The PRESIDING OFFICER. The question now occurs on the Feingold
amendment No. 1416.
Mr. DOMENICI. Mr. President, parliamentary inquiry. Is there any time
to speak on this amendment?
The PRESIDING OFFICER. There is no time to speak on the amendment.
Mr. DOMENICI. I move to table the Feingold amendment and ask for the
yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion. The clerk will call the
roll.
The legislative clerk called the roll.
Mr. McCONNELL. I announce that the Senator from Mississippi (Mr.
Lott) is necessarily absent.
Mr. REID. I announce that the Senator from Massachusetts (Mr. Kerry)
is necessarily absent.
I further announce that, if present and voting, the Senator from
Massachusetts (Mr. Kerry) would vote ``yea.''
The PRESIDING OFFICER (Ms. Collins). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 50, nays 48, as follows:

[Rollcall Vote No. 315 Leg.]

YEAS--50

Alexander
Allard
Allen
Bayh
Bennett
Bond
Breaux
Bunning
Burns
Campbell
Carper
Chambliss
Cochran
Coleman
Cornyn
Craig
Crapo
DeWine
Dole
Domenici
Ensign
Enzi
Fitzgerald
Frist
Graham (SC)
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Kyl
Landrieu
Lincoln
Lugar
McConnell
Miller
Murkowski
Nelson (NE)
Nickles
Pryor
Santorum
Sessions
Shelby
Smith
Stevens
Sununu
Thomas
Voinovich
Warner

NAYS--48

Akaka
Baucus
Biden
Bingaman
Boxer
Brownback
Byrd
Cantwell
Chafee
Clinton
Collins
Conrad
Corzine
Daschle
Dayton
Dodd
Dorgan
Durbin
Edwards
Feingold
Feinstein
Graham (FL)
Harkin
Hollings
Inouye
Jeffords
Johnson
Kennedy
Kohl
Lautenberg
Leahy
Levin
Lieberman
McCain
Mikulski
Murray
Nelson (FL)
Reed
Reid
Roberts
Rockefeller
Sarbanes
Schumer
Snowe
Specter
Stabenow
Talent
Wyden

NOT VOTING--2

Kerry
Lott

The motion was agreed to.
Mr. DOMENICI. I move to reconsider the vote.
Mr. CRAIG. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, I wonder if the minority whip will
advise me--we are on the electricity title--are we ready to vote on
passage of the electricity title or do you have additional amendments?
The PRESIDING OFFICER. The Democratic whip.
Mr. REID. Madam President, as I indicated last night, we have Senator
Dayton who still wishes to offer amendments. Senator Cantwell has at
least two more amendments. Senator Feinstein has an amendment. Those
are the ones I know of at this time. And Senator Boxer has an
amendment. Senator Cantwell is here. She has a very important amendment
to offer.
I relate to my distinguished friend, the manager of this bill, that
Senator Kennedy is here and wishes to speak also. We are in a position
where we are ready to move forward on the electricity title with a
number of amendments.
Mr. DOMENICI. Does Senator Kennedy have an amendment?
Mr. REID. The Senator from New Mexico will have to ask Senator
Kennedy.
Mr. KENNEDY. No. It has been the decision of the leadership to have a
vote on Judge Pryor tomorrow. Under the agreement, we will have 1 hour
for debate. This is an important nomination. I wish to address the
Senate on that matter since we are going to be under very strict time
limitations on the morrow.
We had that series of votes. I want to accommodate the managers of
the bill. If there is an amendment that needs to be disposed of, I will
be glad to wait; otherwise, at some point, I wish to address the Senate
because this is an extremely important nominee. The nomination was just
reported out of committee, and we will be voting in a very short period
of time on the nominee. It is an extremely important nomination. If the
decision was to not have that vote on the morrow, I am glad to withhold
my statement and make my statement at the time the Senate addresses the
nomination. I will certainly work with the floor managers to work out a
time that is suitable, but I am ready to speak. If there is a pending
amendment, and it is the desire of the floor manager to move ahead, I
will accommodate him.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, I say to the distinguished Senator
from Massachusetts, I will speak to the majority leader, as soon as an
amendment is laid down, with reference to the issue Senator Kennedy
just raised. I understand if we proceed on an amendment, we will have
an hour or so, at which time I will talk with the majority leader and
tell him of your desire and others to speak, and see what his wishes
are in that regard.
Mr. SCHUMER. Will my colleague yield?
Mr. DOMENICI. Without losing my right to the floor.
Mr. SCHUMER. There are others who wish to speak in addition to the
Senator from Massachusetts.
Mr. DOMENICI. I will mention the Senator's name.
Mr. REID. I know the Senator from New Mexico has the floor.
Mr. DOMENICI. Yes.
Mr. REID. Madam President, earlier today I alerted the Senate that we
would have members of the Judiciary Committee come to the floor, and we
have members of the Judiciary Committee here today. We have the Senator
from Massachusetts, who is a three-decade member of that committee. We
have Senator Schumer, who is a relatively new member of that committee.
Sometime tonight they are going to speak on the Pryor nomination. I
indicated that would happen, and that is going to happen. They have an
absolute right to speak. I know the Senator from Massachusetts is being
kind and generous, but he has a right to speak. It can either be done
now or 5 minutes from now or 10 minutes from now, but the Senator from
Massachusetts is going to get the floor, and he is going to speak on
the Pryor nomination, as I alerted the Senate today that would happen.
We did not make the choice that we would vote for the seventh time on
Estrada today. The votes have not changed. We did not make the decision

[[Page S10217]]

we would vote on Priscilla Owen. We have voted three times, and the
votes have not changed. We did not make the decision that the Pryor
nomination would be voted on without a single bit of debate on the
Senate floor, but just move it forward for cloture. This is not as if
it is a surprise.
We telegraphed our intentions today that there would be members of
the Judiciary Committee who would come to the Chamber and speak, and
that is going to happen tonight.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, I cannot do anything more than that,
and I think the distinguished Senator from Massachusetts accepts my
statement as an honest statement.
Mr. KENNEDY. Yes.
Mr. DOMENICI. I will leave the floor. I will find the leader, and I
will tell him what is going to happen. I will seek his advice and give
him my advice. I very much appreciate the Senator from Massachusetts
letting me know. We have a number of amendments left. We have important
legislation before us. It is absolutely impossible to do the people's
business if, in fact, during the next 12 hours we have 6 or 8 hours
taken up by speeches with reference to a judge. We will get it done,
but we will be here Sunday, which is all right with this Senator. I do
not think I want to let that happen under my watch as manager, but I
guarantee my colleagues, for those who insist they are going to speak,
I can assure them we are going to be here.
Sooner or later the speeches will run out, and we will be here, and
we will take up the pending amendments on this bill. I have been told
that by the leader unequivocally. I assume that is true if only 60
Senators stick around. So long as we do not lose a quorum, I presume we
are going to be here on Friday, on Saturday, and on Monday to finish
this bill. Senators have their rights, but we have an obligation to do
this work.

I say to the distinguished whip, if he will call up the next
amendment, I will leave the floor and find out what the leader will do
about this, and perhaps we can come up with some accommodation with
reference to this issue. I thank Senator Kennedy for his willingness to
let me do that.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Madam President, I will proceed then. I just wish to
indicate, as someone who also has been a bill manager, I understand
completely the frustration the Senator from New Mexico has and his
desire to move along. As Senator Reid mentioned, we did not anticipate
at the time this nominee was reported out that we would have a vote so
early in the consideration.
Then last week, the chairman of the committee made a very extensive
statement about the nominee and also the procedures of the committee
itself, and I want to attempt to correct that record.
We are on the eve of a vote on the nominee, and that has been
established by not the Senator from New Mexico but by the majority
leader. We are just trying to meet our responsibilities as members of
that committee who have strong views and want to share those views with
the membership and we also feel a responsibility to tell, to the extent
the American people are interested, what our reservations are in terms
of the merits and the process.
I say to the Senator from New Mexico, I plan to be here this evening,
and if it is the desire of the floor managers to consider another
amendment, I am glad to take my turn, although I do think we ought to
have at least an opportunity to speak in the next few hours.
I will begin my statement on this nominee. If it so works out and the
Senator from New Mexico wants to intercede, I will be glad to try to
accommodate him.
Mr. DOMENICI. Will the Senator yield?
Mr. KENNEDY. Yes.
Mr. DOMENICI. How long does the Senator intend to speak?
Mr. KENNEDY. I expect to talk probably 30 minutes.
Mr. DOMENICI. Does the Senator from New Mexico have the floor or the
Senator from Massachusetts?
The PRESIDING OFFICER. The Senator from Massachusetts has the floor.
Mr. KENNEDY. I would rather not get caught into a precise time limit
at this time but my general sense is about 30 minutes.
Mr. DOMENICI. Will the Senator yield? I will get right back to him.
Mr. KENNEDY. That is fine.
Mr. DOMENICI. Madam President, let me repeat----
Mr. KENNEDY. Madam President, I think I have the floor but I will
yield to the Senator from New Mexico for whatever comment he wants to
make.
Mr. DOMENICI. I ask for a couple of minutes, and it will not take any
longer.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from New Mexico.
Mr. DOMENICI. I thank the Senator. First, I say judges are important,
and speaking on behalf of or against judges is very important. I say
that not only to the Senators but to our majority leader. It is also
very important that we pass an Energy bill. We have been waiting for
weeks and weeks. This committee was asked to put a bill together. The
Senator from New Mexico wants to get the Energy bill finished. Clearly,
I find nothing in the rules that says the Senator from Massachusetts is
not entitled to make his speech of 30 minutes or up to an hour. I do
believe it is important, nonetheless, that somewhere along the line
there be some accommodation and that we proceed to get the Energy bill
finished. I understand there are four or five amendments. I wish I
could see them sooner or later so I will know what they are about but
nobody owes me that, either. We will take it as it comes.
I will ask the distinguished majority leader to be accommodating so
we can get this bill finished, but I am doing that with great
trepidation, not as to Senator Kennedy but as to whether there is a
willingness to pursue this bill with vigor if that accommodation is
made. I am not sure about that based on some things that have been
happening but I hope it is. It is with that in mind that I will talk to
the leader, hoping it does mean that if accommodation is made, we will
proceed with dispatch on the Energy bill.
I thank the Senator for yielding to me.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. SARBANES. Will the Senator yield for a question?
Mr. KENNEDY. I will be glad to yield for a question.
Mr. SARBANES. I have been listening to this discussion. Am I correct
in saying that the Senator would not be seeking to speak now if the
other side had not indicated that they were intending to try to bring
the nomination of Mr. Pryor to the Senate on tomorrow? Is that right?

Mr. KENNEDY. The Senator is exactly correct.
Mr. SARBANES. The Senator is not inserting himself into the debate on
the Energy bill seeking to slow the Energy bill down; he is prompted to
do this by the fact that the other side is scheduling this nominee for
a vote, I understand, with no debate whatsoever. Is that correct?
Mr. KENNEDY. Well, that is correct. It is not the members of the
Judiciary Committee who are holding up the consideration of the Energy
bill. It is the decision to put before the Senate, under the legitimate
procedures of the Senate, a cloture petition to have a vote on this
nominee, effectively shutting off all the debate.
Quite clearly, my own belief is if we had the time, and also had the
time during the August recess, to complete the investigation which
needs to be done on this nominee, the Senate would be much better
informed, the American people would be much better informed, and the
judiciary would be much better served. That is not the decision of the
leadership and, therefore, we believed that as the day wore on, after
5, we would at least have an opportunity, since this is an enormously
serious nominee for a very serious position and there are very serious
charges, to address the Senate.
Mr. SARBANES. Will the Senator yield for a further question?
Mr. KENNEDY. Yes.
Mr. SARBANES. It is my understanding that twice this week, if I am
not mistaken, we have had to go off of the Energy bill, which we are
being told we must move forward, in order to

[[Page S10218]]

address other judgeship nominees who had previously been voted on a
number of times. So we have been diverted off the track of the Energy
bill by these judicial nominees, not of our doing but because of the
scheduling which the other side has undertaken.
I know our assistant leader has been concerned about that as well, if
I am not mistaken, in that regard. Is that not correct?
Mr. KENNEDY. The Senator is correct. As the Senator remembers, I
think those votes were in the late morning and even interrupted
committee work at that time, which many of us were involved in, let
alone the consideration of the Energy bill.
Mr. SARBANES. I thank the Senator.
Mr. KENNEDY. I thank the Senator from Maryland.
The PRESIDING OFFICER. The Senator from Massachusetts.

____________________