[Congressional Record (Bound Edition), Volume 147 (2001), Part 3]
[Senate]
[Pages 3624-3625]
[From the U.S. Government Publishing Office, www.gpo.gov]



                               BANKRUPTCY

  Mr. BINGAMAN. Mr. President, I ask unanimous consent to be allowed to 
speak as if in morning business for a few minutes on two amendments 
that are pending to the bankruptcy bill-- amendments offered by Senator 
Wyden and Senator Smith related to discharge of debts and prohibition 
of discharge of debts related to the California energy crisis.
  I oppose the Smith amendment to the underlying Wyden amendment, and I 
also oppose the Wyden amendment.
  In my view, both amendments are unfair in that they give an unfair 
advantage to government agencies at the expense of private companies in 
the event that California utilities wind up in bankruptcy. They ensure 
that a large Federal utility like Bonneville, itself the beneficiary of 
billions of dollars of Federal investment, and other utilities will be 
paid ahead of the banks, small renewable energy generators, natural gas 
companies, and other creditors.
  Both amendments are not helpful in our current circumstance. The 
State of California and its utilities are trying desperately to keep 
the utilities out of

[[Page 3625]]

bankruptcy. Without these amendments, they stand a good chance of 
succeeding. If the amendments are adopted, the utilities will almost 
certainly be forced to declare bankruptcy.
  I also oppose the amendments because, in my view, they are unwise. 
The consequences of the three largest utilities in California going 
bankrupt are unknown, as is the rest of the State's economy and the 
rest of our Nation's economy. But it is clear that it will not just 
affect the ratepayers served by the three utilities, or even just the 
people of California. It will affect all Americans. As Chairman of the 
Federal Reserve, Alan Greenspan, testified several weeks ago, ``it's 
scarcely credible that you can have a major economic problem in 
California which does not feed to the rest of the 49 States.''
  In my view, the amendments are also unnecessary. If utilities are 
able to avoid bankruptcy, then the power suppliers that these 
amendments seek to protect will be paid. Even if they go bankrupt, 
those power suppliers stand a reasonably good chance of being paid--if 
not by the utilities themselves, then by the government, for the 
reasons that Senator Murkowski explained last night on the Senate 
floor.
  In my view, the amendments are also unworkable. By trying to jump 
certain creditors to the head of the line to receive payment, they will 
most likely force the remaining creditors to move to put the utilities 
into bankruptcy immediately so that the utilities' assets can be 
divided immediately, 6 months before the amendments in fact take 
effect.
  Even if the amendments are enacted, the generators would not likely 
receive any benefit from the enactment of the amendments.
  Finally, these amendments, in my view, are uncharitable in that the 
administration has declared the California electric crisis to be 
California's problem, and has left it to California to solve the 
problem. The Federal Energy Regulatory Commission, which is the 
independent agency charged with seeing to it that electric rates are 
just and reasonable, has done little to help the situation. Governor 
Davis, and the State legislature in California, the utilities, and 
their creditors have been working valiantly in recent weeks, and even 
months, to fix this problem. All they are now asking of this Senate is 
that we not intervene and send the utilities into bankruptcy by 
adopting amendments of this type.
  In my view, Senators need to weigh the potential enormous harm to 
millions of Americans that would result in the adoption of these 
amendments against the illusory benefit that the amendments hold out 
for the few generators that would be benefited.
  In sum, to paraphrase Shakespeare, which is not done very often on 
the Senate floor, adoption of the amendments will rob California of 
that which cannot enrich the northwest generators and yet will make 
California poor, indeed.
  I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. FEINSTEIN. Mr. President, I believe the unanimous consent order 
provided 5 minutes for Senator Hagel to speak against the Wyden 
amendment. Senator Hagel will not be able to be present, and I ask 
unanimous consent to use that time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. FEINSTEIN. Thank you very much, Mr. President.
  I thank the ranking member of the Energy Committee, the Senator from 
New Mexico, Mr. Bingaman, for his remarks in opposition to the Wyden 
amendment. I also wish to thank Senator Murkowski, the chairman, who 
came to the floor last night and spoke against the amendment.
  Last evening, I submitted for the Record several letters in 
opposition to the amendment from the Electric Power Supply Association, 
the Edison Electric Institute, The Williams Companies, Calpine, Pacific 
Gas and Electric, Southern California Edison, International Brotherhood 
of Electrical Workers, The Utility Reform Network, a consumer group, 
and the American Gas Association, all in strong opposition to the Wyden 
amendment, and also with one general theme. That general theme is that 
if the Congress of the United States were to determine the order in 
which debts would be discharged, it would trigger a bankruptcy because 
those who are not favored in that order would seek to protect their 
right by moving both Pacific Gas and Electric and Southern California 
Edison into bankruptcy. Virtually every single letter reiterated that 
concern.
  I would like to reread from one of the letters so the Senate might 
understand the concern, and that is from the Electric Power Supply 
Association. That letter states:

       We are writing to express our deep concern and opposition 
     to [the amendment]. Our fear is that this amendment could 
     precipitate a financial crisis and exacerbate the already 
     precarious situation in the West.

  The PRESIDING OFFICER. Will the Senator suspend.
  Mrs. FEINSTEIN. I will.

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