[Congressional Record (Bound Edition), Volume 147 (2001), Part 6]
[House]
[Pages 8571-8572]
[From the U.S. Government Publishing Office, www.gpo.gov]



 REMARKS OF THE VICE PRESIDENT CONCERNING THE CALIFORNIA ENERGY CRISIS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California (Mr. Sherman) is recognized for 5 minutes.
  Mr. SHERMAN. Mr. Speaker, this weekend I was disappointed by the 
comments of the Vice President in talking about the California energy 
crisis.
  Vice President Cheney put forward the theory that California made a 
mistake with its deregulation, and therefore, California should suffer 
without any Federal action; that the blackouts and outrageous prices 
being faced by people in my State are somehow part of a divinely 
ordained morality play.
  Well, California did make a mistake. We put ourselves at the mercy of 
gougers, chiefly independent energy companies based in Houston, Texas. 
Our theoretical economist told us that if we deregulated, all these 
companies would produce independently as long as they could make a 
profit; that they would maintain their output.
  What we discovered instead was that if we came anywhere close to a 
shortage, a few of them would close down, create the prospect of 
blackouts, all in an effort to drive up the price. That is why the 
California Public Utilities Commission determined that not only are we 
paying outrageous prices, but deregulation, which according to the 
theorists should maximize the production of electricity, is actually 
causing the blackouts by causing them to underproduce. By producing a 
little less, they can charge us the outrageous prices that my 
colleague, the gentleman from Oregon, just pointed out to this House.
  But returning to the Vice President's idea of fault, that this is 
somehow California's fault, and therefore, Californians should suffer, 
this might make some sense if Californians were rushing to this floor 
asking for tens of billions of dollars of aid. But that is not what we 
are asking for. We are only asking for the right to reregulate, whether 
that is done at the Federal level or whether it is done at the State 
level. We are asking for the reinstitution of the same system of 
regulation that served this country so well for 100 years.
  The Vice President's statements are analogous to the following 
situation. Assume our neighbor's house is burning down. If that 
happens, one approach is to steal our neighbor's hose and lecture our 
neighbor about fire safety, that the fire should never have started.
  That is in fact what this administration is doing. On the one hand, 
we are lectured that California made a mistake, and given the current 
outcome, that is no doubt true. But then, instead of being given help, 
instead of even being left alone, the hose is stolen, impounded, and a 
smile comes across the administration's face as the house burns down.
  At a very minimum, California needs to see cost-based regulation of 
the electric plants located in California. Federal law prevents us from 
doing so. We

[[Page 8572]]

are bound and gagged by Federal law. It is time for this House and this 
administration to direct FERC, the Federal Energy Regulatory 
Commission, to institute the kind of price caps, the kind of rate 
regulation, that all California is asking for.
  Instead, we are lectured. We are lectured and told that we will be 
prevented from helping ourselves, we are going to be prevented from 
regulating that wholesale price, and that the Federal government will 
not do so. We are told by people who suffer not at all that we should 
adopt their economic theories.
  It is time for the Federal government to return the hose. It is time 
for the administration to remove its foot from the neck of California. 
We are not asking for billions in aid, although, if this house burns 
down, we will need it. We are only asking for regulation of the same 
type that we imposed ourselves when the plants were under California 
regulation. We need this level of regulation, either from the Federal 
government, or we need the right to do it ourselves.

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