[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[Senate]
[Pages 5578-5594]
[From the U.S. Government Publishing Office, www.gpo.gov]




       NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now resume consideration of S. 517, which the clerk will 
report.
  The legislative clerk read as follows:

       A bill (S. 517) to authorize funding for the Department of 
     Energy to enhance its mission areas through technology 
     transfer and partnerships for fiscal years 2002 through 2006 
     and for other purposes.

  Pending:

       Daschle/Bingaman further modified amendment No. 2917, in 
     the nature of a substitute.
       Landrieu/Kyl amendment No. 3050 (to amendment No. 2917), to 
     increase the transfer capability of electric energy 
     transmission systems through participant-funded investment.
       Schumer/Clinton amendment No. 3093 (to amendment No. 2917), 
     to prohibit oil and gas drilling activity in Finger Lakes 
     National Forest, New York.
       Dayton amendment No. 3097 (to amendment No. 2917), to 
     require additional findings for FERC approval of an electric 
     utility merger.
       Murkowski/Breaux/Stevens amendment No. 3132 (to amendment 
     No. 2917), to create jobs for Americans, to reduce dependence 
     on foreign sources of crude oil and energy, to strengthen the 
     economic self determination of the Inupiat Eskimos and to 
     promote national security.
       Feinstein amendment No. 3225 (to amendment No. 2917), to 
     modify the provision relating to the renewable content of 
     motor vehicle fuel to eliminate the required volume of 
     renewable fuel for calendar year 2004.
       Feinstein amendment No. 3170 (to amendment No. 2917), to 
     reduce the period of time in which the Administrator may act 
     on a petition by 1 or more States to waive the renewable fuel 
     content requirement.
       Fitzgerald amendment No. 3124 (to amendment No. 2917), to 
     modify the definitions of biomass and renewable energy to 
     exclude municipal solid waste.
       Cantwell amendment No. 3234 (to amendment No. 2917), to 
     protect electricity consumers.

  The ACTING PRESIDENT pro tempore. The Senator from Nevada.
  Mr. REID. Mr. President, as the Chair has announced, we have resumed 
consideration of the energy reform bill. Members know there are 18 
hours remaining postcloture, after the cloture vote that took place 
yesterday. There will be rollcall votes in relation to amendments to 
the bill throughout the day. First-degree amendments to the Baucus 
language in the energy reform bill must be filed prior to 1 p.m. today.
  Mr. President, the Senator from Washington was next in order. Her 
amendment is pending.
  I ask, with the consent of the managers, that that amendment be set 
aside and that we proceed to the Nelson-Craig amendment dealing with 
hydro.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The Senator from Nebraska.
  Mr. NELSON of Nebraska. Mr. President, I rise today in support of my 
amendment to title III dealing with hydroelectric license improvement. 
This is an issue of vital importance to the electricity consumers of 
Nebraska and I ask unanimous consent to call up amendment No. 3140.
  The ACTING PRESIDENT pro tempore. The clerk will report the 
amendment.
  Mr. REID. Mr. President, that requires unanimous consent, does it 
not?
  The ACTING PRESIDENT pro tempore. It does require that we set aside 
the current amendment. Does the Senator request we temporarily set 
aside the current amendment?
  Mr. NELSON of Nebraska. I request that we set aside the pending 
amendment.
  Mr. REID. Mr. President, reserving right to object, I suggest the 
absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Edwards). Without objection, it is so 
ordered.
  Mr. REID. Mr. President, I ask unanimous consent that the Senate now 
return to the consideration of the Cantwell amendment which is the 
matter that was pending when we started this morning.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Washington.


                           Amendment No. 3234

  Ms. CANTWELL. Mr. President, I rise today to speak about my 
electricity consumer protection amendment to improve what I believe is 
a flawed deregulation provision in the underlying energy bill.

[[Page 5579]]

  It is not widely known that the electricity title of this bill 
includes a new provision to further deregulate our energy markets. 
Indeed, many of these provisions were included, I believe, without 
adequate consideration and review by this body.
  For the first time this bill gives the Federal Energy Regulatory 
Commission the statutory authority to allow market-based rates, a key 
component of deregulation. It also lowers the standard by which mergers 
of utilities can take place, and it repeals a current law that has been 
the cornerstone of consumer protection.
  Given the sweeping changes in this bill, I think it is important that 
we proceed cautiously on this path, and that we put safeguards in 
place, which my amendment does, to protect consumers as FERC is given 
this new responsibility.
  After last year's energy crisis, we should be asking ourselves, how 
do we better protect consumers, not how do we loosen the rules for 
utility companies so that they can have better controls in the 
marketplace.
  My amendment is written to protect consumers basically across the 
country from the same mishaps that happened in the western markets that 
have caused consumers in the West so much harm. After all we learned 
from the energy crisis and the collapse of Enron, it is plain that we 
need to move forward and set a clear set of rules to ensure that, in 
deregulated markets, consumers are protected. The fact is that 
consumers deserve efficient electricity markets with adequate 
protections and efficient oversight.
  As the bill now stands, we are giving the Enrons of the world more 
power to manipulate markets. In fact, without this consumer protection 
amendment this bill sends some of those people the opportunity, I 
believe, to actually end up overcharging consumers.
  These are commonsense ideas and that is why this amendment has gained 
support from a wide range of consumer, industry, local government and 
environmental groups. They are united behind the idea that consumers 
should be protected as this bill moves towards deregulation.
  I am pleased to be joined by Senators Dayton, Wellstone, Feingold, 
Boxer, Wyden, Murray, and Stabenow in this effort.
  Groups ranging from AARP to the American Public Power Association, to 
the Consumers Union and the Sierra Club, to the U.S. Conference of 
Mayors stand behind the consumer protection measures in this amendment.
  I ask unanimous consent that a full list of the organizations which 
support this legislation be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                Support the Consumer Protection Package

       Amendment No. 3097, offered by Senators Dayton, Wellstone, 
     Feingold, Cantwell, Boxer and Wyden, would add crucial 
     consumer protections to the electricity title of the Senate 
     energy bill, incorporating lessons learned from the Western 
     electricity crisis and Enron's collapse.
       Air Conditioning Contractors of America.
       American Association of Retired Persons.
       American Public Power Association.
       Consumer Federation of America.
       Consumers for Fair Competition.
       Consumers Union.
       Electricity Consumers Resource Council.
       National Association of State Utility Consumer Advocates.
       National Environmental Trust.
       National League of Cities.
       National Rural Electric Cooperatives Association.
       Natural Resources Defense Council.
       Physicians for Social Responsibility.
       Public Citizen.
       Sierra Club.
       Transmission Access Policy Study Group.
       U.S. Conference of Mayors.
       Union of Concerned Scientists.
       U.S. Public Interest Research Group.
       Vote ``yes'' on the Consumer Protection Package.

  Ms. CANTWELL. Mr. President, their voice is loud and clear. After 
last year's energy crisis, it is unacceptable to launch a new round of 
deregulation without first putting in place adequate consumer 
protections.
  I would like to read from a letter signed by the Consumers Union, 
Sierra Club, NRDC, Consumer Federation of America, and others. It 
reads:

       This amendment would add important and much-needed 
     protections to legislation that actually repeals already weak 
     consumer protections in current law. S. 517 repeals most of 
     the Public Utility Holding Company Act (PUHCA), including 
     provisions that have been in place for over six decades, and 
     does almost nothing to ensure that consumer protections will 
     be maintained. Now, with the exposure of Enron's questionable 
     trading deals, we need these protections more than ever to 
     prevent energy companies from manipulating prices and supply. 
     We need to strengthen consumer protections, not weaken them.

  Consumers for Fair Competition wrote:

       In the wake of the West Coast electricity crisis and Enron 
     collapse, Congress should only pass electricity legislation 
     if it takes needed steps to protect consumers and prevent a 
     repetition of these crises.

  I ask unanimous consent to have printed in the Record letters of 
support that I have received from these organizations.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                                   April 15, 2002.

 Defend Electricity Consumers' Rights--Support the Consumer Protection 
                      Package: S.A. 3097 to S. 517

       Dear Senator: We are writing to urge you to support S.A. 
     3097, the consumer protection amendment to the Senate energy 
     bill (S. 517), offered by Senators Dayton, Wellstone, 
     Feingold, Cantwell, Boxer, and Wyden. This amendment would 
     add important and much-needed protections to legislation that 
     actually repeals already weak consumer protections in current 
     law. S. 517 repeals most of the Public Utility Holding 
     Company Act (PUHCA), including provisions that have been in 
     place for over six decades, and does almost nothing to ensure 
     that consumer protections will be maintained. Now, with the 
     exposure of Enron's questionable trading deals, we need these 
     protections more than ever to prevent energy companies from 
     manipulating prices and supply. We need to strengthen 
     consumer protections, not weaken them.
       This consumer protection package would:
       Ensure that mergers in the energy sector ``advance the 
     public interest,'' based on objective criteria that would be 
     evaluated by the Federal Energy Regulatory Commission (FERC). 
     In repealing the higher merger standards of PUHCA, S. 517 
     would simply require a determination for a merger approval 
     that the merger is ``consistent with the public interest.'' 
     Given the wave of mergers sweeping through the electric 
     industry and the collapse of meaningful competition in 
     California and other states, we believe that a more 
     protective standard is necessary to adequately protect 
     consumers from abuse. FERC must hold the public interest 
     paramount in evaluating any potential energy company mergers. 
     The amendment would: establish criteria for FERC to consider 
     in order to determine that a merger would ``advance the 
     public interest,'' including efficiency gains, impact on 
     competition, and its ability to effectively regulate the 
     industry; clarify that these provisions would apply to all 
     potential financial arrangements (not just stock 
     acquisitions) which could lead to exertion of control over 
     the entity, including partnerships; and clarify that FERC 
     review applies to all electric and gas combinations.
       Direct FERC to precisely define a competitive market and 
     establish rules for when market-based rates will be 
     permitted. In addition, it would put in place market 
     monitoring procedures so that FERC can better detect problems 
     before they lead to a complete breakdown in the market, and 
     give FERC more authority to take action to protect consumers 
     when the market is failing. This change is necessary to 
     ensure that electricity suppliers do not continue to 
     manipulate the market to the detriment of consumers, as they 
     did in the western electricity market in 2000-2001.
       Require that transactions between utilities and their 
     affiliates be transparent, and it would shield consumers from 
     the costs and risks of these transactions. It provides for 
     FERC review of utility diversification efforts so that 
     consumers are not victims of abusive affiliate transactions.
       Require that state and federal regulators have enhanced 
     access to books and records. It would require FERC, in 
     consultation with state commissions, to conduct triennial 
     audits of the books and records of holding companies. 
     Regulators could initiate proceedings based upon their 
     reviews and violations could be corrected earlier, minimizing 
     the damage done to consumers. Since holding companies would 
     be responsible for paying the cost of the audits, regulators 
     would have adequate resources to do their job. Enhanced 
     access to books and records is critical to avoid further 
     Enron-like collapses.
       Help ensure fair and functional markets, increasing the 
     likelihood that energy companies will invest in new, 
     innovative, and clean technologies such as solar and wind 
     power.
       Consumers have been grossly and unacceptably short-changed 
     in the Senate energy

[[Page 5580]]

     bill. S.A. 3097 will begin to rectify the problems this bill 
     creates for consumers. Federal energy legislation should 
     increase, not decrease, consumers' economic and energy 
     security. Please adopt this basic consumer protection package 
     to address these serious consumer concerns.
           Sincerely,
       Adam J. Goldberg, Policy Analyst, Consumers Union.
       Mark N. Cooper, Director of Research, Consumer Federation 
     of America.
       Alyssondra Campaigne, Legislative Director, Natural 
     Resources Defense Council.
       Kevin S. Curtis, Vice President, Government Affairs, 
     National Environmental Trust.
       Susan West Marmagas, Director, Environment and Health 
     Programs, Physicians for Social Responsibility.
       Debbie Boger, Senior Washington Representative, Sierra 
     Club.
       Anna Aurilio, Legislative Director, U.S. Public Interest 
     Research Group.
       Alden Meyer, Director of Government Relations, Union of 
     Concerned Scientists.
       Wenonah Hauter, Director, Public Citizen's Critical Mass 
     Energy and Environment Program.
                                  ____

                                                 National Alliance


                                         for Fair Competition,

                                   Washington, DC, April 12, 2002.
       Dear Senator: The National Alliance for Fair Competition 
     (NAFC), a coalition of national trade associations 
     representing over 25,000 individual firms, mostly family 
     owned and operated small businesses, is deeply concerned 
     about the present direction of energy legislation, S. 517, in 
     light of recent West Coast power problems and the collapse of 
     Enron. As it now stands, the electricity portion (Title II) 
     of this bill fails to adequately address issues of market 
     power and abusive affiliate transactions.
       NAFC is also concerned about lack of opportunity to 
     thoroughly explore the implications and consequences of Title 
     II through the full committee process. Had the committee 
     process not been circumvented, there would have been ample 
     opportunity to craft language to protect consumers and 
     preserve true competition. Regrettably, Title II of S. 517 
     increases the potential for abuses in these areas--by, among 
     other things, repealing the Public Utility Holding Company 
     Act (PUHCA)--without providing needed offsetting protections.
       Senators Cantwell, Wellstone, Dayton, Feingold and Boxer 
     will offer a package of provisions to protect electricity 
     consumers and ensure fair and effective oversight of 
     electricity markets. The package will:
       Require that proposed utility mergers promote the public 
     interest in order to be approved;
       Establish clear rules--and enforcement--for when market 
     rates can be charged to prevent a repeat of soaring 
     electricity rates when markets are not truly competitive;
       Protect consumers from assuming the cost and risks of 
     utility diversifications into non-utility businesses;
       Prevent utilities from subsidizing affiliate ventures and 
     competing unfairly with independent businesses;
       Provide effective review of utility books and records.
       Amendment #3097, the Dayton-Wellstone-Feingold amendment, 
     and the second degree offered by Sen. Cantwell and others 
     would add crucial protections to the electricity title of the 
     Senate energy bill, incorporating lessons learned from the 
     Western electricity crisis and Enron's collapse.
       We urge you to support these amendments when they are 
     offered.
           Respectfully,
                                                  Tony Ponticelli,
     Executive Director.
                                  ____

                                         Washington Public Utility


                                        Districts Association,

                                      Seattle, WA, April 15, 2002.
     Hon. Maria Cantwell,
     U.S. Senate,
     Washington, DC.
       Dear Senator Cantwell: On behalf of the Washington Public 
     Utility Districts Association (WPUDA), I would like to 
     express our strong support for the amendment you are 
     cosponsoring, the Consumer Protection Package (#3097). This 
     amendment adds crucial consumer protections to the 
     electricity title of the Senate energy bill, incorporating 
     lessons learned from the Western electricity crisis and 
     Enron's collapse.
       As you correctly stated on the Senate floor on April 10th, 
     the electricity title in S. 517 is of primary significance to 
     the citizens of Washington, and the Northwest region--we have 
     already suffered huge rate increases and cannot bear the 
     consequences of another ``failed experiment.'' Because the 
     underlying bill repeals the Public Utility Holding Company 
     Act (PUHCA) without including adequate consumer protections, 
     your package of amendments is essential to ensure that the 
     consumer is not overlooked and adversely affected. For 
     example, your amendment requires clear, upfront rules on 
     market-based rates. In doing so, it reduces the instances in 
     which corrective actions will be needed by the Federal Energy 
     Regulatory Commission (FERC).
       Once again, WPUDA thanks you for your leadership and 
     supports this critical amendment that seeks to protect the 
     public interest.
           Sincerely,
                                                    Steve Johnson,
                                               Executive Director.

  Ms. CANTWELL. Mr. President, my constituents and the constituents of 
my colleagues from the West, particularly California, Oregon, and 
Idaho, have seen first hand the devastation caused by the Western 
energy crisis: wholesales rate spikes of more than 1,000 percent; 
aluminum workers put out of work because electricity costs were too 
high for their companies to operate; and an economic slump in 
California, Oregon, and Washington directly related to last year's high 
energy prices.
  In my home state of Washington we are still paying the price for the 
lack of consumer protections during the energy crisis. Ratepayers in my 
home of Edmonds, WA are paying almost 60 percent more than they did 
before the crisis, with no relief in sight.
  Nowhere do consumers know the importance of proper safeguards more 
acutely than in the West. In the wake of what happened there, why would 
we even consider reducing consumer protections and lowering legal 
standards? Why would we promote further deregulation and at the same 
time abandon consumer protections?
  Ask anyone from California whether they want more deregulation 
without consumer protection. They will all tell you the same answer: 
After Enron and the western energy crisis we should strengthen consumer 
protection laws, not weaken them. They know that without adequate 
consumer protections, electricity markets may not work to protect 
consumers.
  One need look no further than a February 2001 poll in which 
California residents were asked if they supported the legislature's 
decision to deregulate the electricity market. By nearly 40 percent, 
Californians opposed the deregulation plan.
  There are many other public opinion polls across this country that 
show consumers are very concerned about any move toward more 
deregulation without sufficient consumer protection. A July 2001 survey 
by the Mellman Group revealed that North Carolinians opposed 
deregulation by a 14 percent margin and by a 40 percent margin thought 
that deregulation would cause rate increases. In March of this year, a 
different Mellman survey showed that 60 percent of Montanans thought 
that deregulation had caused higher electricity rates.
  The public voice is clear.
  I think it is important to review how we got to this point, beginning 
with the first major piece of legislation to protect ratepayers, passed 
during the first term of Franklin Delano Roosevelt's Presidency.
  In the 1920s our system of utility regulation began to fail 
consumers. Complex corporate structures made it impossible to offer 
adequate consumers protections. By 1932, 45 percent of all electricity 
was controlled by three groups. Because of their market power and 
complex and misleading corporate structure, the utilities owned by 
these holding companies were able to charge excessive rates, which were 
passed directly to consumers.
  In response to this situation, this body passed into law the Public 
Utilities Act of 1935 to help bring the system under control and offer 
consumers adequate safeguards. The two key titles of the Public 
Utilities Act--PUHCA and the Federal Power Act--put in place important 
consumer protection regulations. PUHCA required utilities to either 
largely operate within a single state, or be subject to strict federal 
regulation by the SEC. The Federal Power Act created a consumer 
protection framework for the transmission of electricity in interstate 
commerce and wholesale rates for electricity.
  Today, we are faced with an energy bill that repeals key consumer 
protections from these pieces of legislation.
  Albeit, I know the chairman of our committee wants those laws to be 
more effective, and to be more effective under FERC, while I agree 
there can be authorities new at FERC, I want to make sure that, while 
we change from the SEC to FERC, we don't repeal the

[[Page 5581]]

legal standards or the framework for consumer protection.
  Just think about the energy crises of the past. In the 1920s, when 
corporate structures got out of control and retail consumers suffered 
the consequences, we responded with the Public Utilities Act. During 
the 1970s energy crisis, we responded with the Public Utility 
Regulatory Policies Act.
  But today we are faced with the prospect of responding to the Western 
energy crisis of 2001 with more of the same that helped cause the 
crisis in the first place. I believe the Western energy crisis was 
really precipitated by two factors: obviously, California adopted a 
restructuring plan without adequate thought and deliberation, and the 
fact that FERC, the Federal Energy Regulatory Commission, signed off on 
it. That is right, they signed off on the California plan. Then FERC 
allowed generators in the West to charge market-based rates without 
first ensuring that those markets were sufficient in their competition 
and that they were adequately monitoring those markets over time.
  The definition of insanity is watching something fail and then doing 
it again. And that is what we are headed towards doing. It would be 
insane for us to enact further flawed deregulation without at least 
addressing the importance of providing consumer protections.
  Consumers know that they are ultimately the ones who will get stuck 
holding the check. And they are right. It is wrong policy to deregulate 
without protecting consumers. And ultimately, it hurts them where it 
hurts most: in their pocketbooks.
  This amendment addresses the need for consumer protection from 
deregulation by creating safeguards from potential market failures and 
abuses.
  The amendment would prevent a repeat of soaring electricity rates in 
deregulated markets by directing FERC to establish rules and 
enforcement procedures for market monitoring to protect electricity 
consumers.
  The market rate provisions of this amendment are actually quite 
simple in concept.
  As I said earlier, for the first time in this legislation, the 
underlying authority is given to FERC instead of to the SEC. While 
giving this new power to FERC, we need to make sure consumers are 
protected by making sure they do not lower the standard.
  I believe it is critical that within this legislation we not lower 
the legal standard by which these mergers were held in the past. FERC 
can have new responsibility, but we must make sure we are not lowering 
the legal standard by which we allow these companies to merge. FERC 
needs statutory guidance on just what factors it should consider before 
it allows market-based rates to be charged. That is, before FERC opens 
up the energy market, it should have to ensure that those markets are 
going to operate efficiently and not gouge consumers.
  The bill currently does not adequately offer consumer protection, 
especially in view of the House of Representatives' electricity bill, 
which I think goes too far in giving a wish list to the big energy 
companies. The electricity provisions of this bill right now actually 
lower the overall merger standard.
  This amendment would maintain current law with regard to that merger 
standard. It is a very important point--that current law be the 
standard for FERC.
  In fact, there have been something like 30 major utility mergers and 
acquisitions over the past few years alone. That is a testament to the 
need for laws to protect consumers from consolidation which is 
happening in the utility sector.
  It is also a powerful reminder that current law is in no way too 
prescriptive. Maintaining the legal merger standard currently on the 
books--I think it is important to do this--is a critical part of the 
amendment.
  The electricity provisions in this bill also fall short, in my view, 
on the issue of insulating consumers from the economically devastating 
effects of the energy markets which have gone horribly awry.
  The primary difference between the Senate energy bill as it is 
currently written and what we are trying to accomplish with this 
amendment is simple. It is the difference between preventing 
dysfunctional markets from happening in the first place, and post hoc 
investigations that are unlikely to provide better relief for consumers 
harmed by skyrocketing energy prices.
  What I mean by that is, without these specific requirements in place, 
and new mergers and market-based rates happening, and without the 
oversight, it is very hard, once consumers are gouged, to then come 
back and ask for records and information that show what kind of 
protections should have been on the books.
  I do not think many of my colleagues realize that, for the very first 
time, this legislation, the underlying bill, gives FERC explicit 
statutory authority to allow companies to charge market-based rates. So 
nowhere had FERC ever been given that statutory authority. They had 
always been cost-based rates. But this legislation will, for the first 
time, give FERC statutory authority to allow companies to charge 
market-based rates that they decided administratively to start allowing 
in the mid-1980s.
  While the Energy Policy Act of 1992 affirmed the direction FERC was 
moving in regard to opening of the Nation's transmission system, it did 
not contain this explicit authority for FERC to grant market-based 
rates.
  I believe this is a very important point because if we are going to 
move forward in saying that market-based rates should be there, then we 
must make sure those consumer protections are in place as well.
  In sifting through the ashes of the California experiment, it is now 
obvious that FERC did not pause to consider the constraints--whether 
real or manipulated--on natural gas transportation into the State, 
which, in turn, drove up the price of electrical generation. FERC 
approved a system without assessing the market power of what became 
known as the big five energy companies in the California crisis, 
including Enron, and the impact they had.
  It is also clear that FERC approved the California proposal without 
assurances that the State's independent system operator could 
effectively monitor market conditions. I have heard from numerous 
utilities involved in the California market that the ISO began 
declaring emergencies purely subjectively because its mechanisms for 
assessing where physical megawatts actually existed--and whether these 
shortages were real or imagined--were so incredibly flawed.
  In addition, it has been repeatedly alleged that the ISO declared 
these emergencies for political reasons because utilities, as such in 
those States, were obligated to sell into the California market, first 
under a Department of Energy order, and later under an order from FERC 
itself, when emergencies were declared. FERC did not have the market 
monitoring practices in place that would have been the protections the 
consumers needed.
  So why give them more authority now to do market-based rates without 
making sure the legal standards are in place and making sure that 
consumer protections are in place?
  In summary, I want it to be clear to my colleagues that this 
amendment today should do its job to prevent a flawed deregulation bill 
and to help protect consumers.
  This legislation specifically does several things: It helps maintain 
the competitive markets, it effectively monitors markets, it prevents 
the abuse of market power and manipulation, and it ensures the 
maintenance of just and reasonable rates.
  The amendment would also require utility mergers to serve the public 
interest and for utility books to be fully open. It would protect 
consumers from absorbing the costs of utility diversifications and 
prevent them from being basically subject to the various tactics in 
which consumers are held to higher costs when the markets are 
consolidated or market-based rates are charged and things can actually 
go awry.
  This amendment does not take away any of FERC's authority to allow 
market-based rates. It does not stop the

[[Page 5582]]

move toward deregulation. In fact, it is consistent with the concept of 
deregulation. It simply says we need a roadmap for consumers. We need 
protections for this new market-oriented approach.
  I am reminded by something that FERC Chairman Pat Wood said on March 
11:

       I'm probably the world's biggest believer in markets.

  But Mr. Wood also said:

       But I'm also the world's biggest believer that people will 
     take advantage of it if they don't have a cop walking down 
     the street.
  This amendment provides the ``cop walking down the street'' for our 
electricity markets in protecting consumers. With all that we have read 
and seen of what happened during the Western energy crisis and the role 
that Enron and other power companies played in it, how can we even 
consider further deregulation without putting in place real consumer 
protections? It is practically malpractice for us to think about these 
new deregulations without thinking about how to protect consumers.
  That is why we are offering this amendment today. We need to say to 
the people of this country, we are going to protect you from the crisis 
that has happened in California and in Washington and in Oregon. And we 
are going to make sure the markets operate in a way in which consumers 
are protected.
  This is a critical amendment and should be adopted as a part of this 
bill. We need to say to the consumers that we are thinking about their 
needs, their protections, and the high price of electricity throughout 
the country.
  I yield back the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. DAYTON. Mr. President, I rise to say that I welcome the amendment 
by Senator Cantwell and others that greatly strengthens the amendment 
that I previously brought to the floor. I compliment the Senator from 
Washington, who has done an extraordinary amount of work on this 
measure, for her leadership in bringing together Senators, consumer 
groups, and others who would be affected by this legislation.
  I think her work has been extraordinary. I know from my own 
observation that her work behind the scenes over the last days and 
weeks has been phenomenal. She has put countless hours into bringing 
this coalition together, bringing these amendments together, and 
bringing them to the floor for our consideration today.
  Again, I want the Record to show that the Senator from Washington has 
been extraordinary in her efforts to bring this to the floor.
  I yield the floor.
  The PRESIDING OFFICER (Mrs. Clinton). The Senator from New Mexico.
  Mr. BINGAMAN. Madam President, I rise to speak against the amendment 
that my colleague from Washington and the Senator from Minnesota have 
offered. This is an issue on which I think we need to refresh people's 
memory because it has been a few weeks since we had votes on this 
portion of the energy bill.
  But let me recall for Senators and their staffs exactly with what we 
are dealing. This is the electricity title of the energy bill. We have 
worked hard on that title, those of us who have been involved on the 
issue for a long time. Senator Thomas, in particular, and myself have 
worked hard to come up with language which we believe ensures that 
consumers are protected and which ensures that mergers and acquisitions 
are properly reviewed before they are permitted to go forward or are 
turned down if they do not meet strict criteria. We have put together 
language we believe is very favorable to consumers.
  Part of what we are proposing is that the Public Utility Holding 
Company Act be repealed. That is an issue that continues to be the 
subject of controversy. I understand that. And I understand the 
amendment, of course, that we are now presented with would try to 
eliminate the repeal of the Public Utility Holding Company Act and keep 
that current law.
  This is a legitimate issue. In the Energy Committee, in the most 
recent hearing we had on energy-related issues, we had a hearing on 
this issue. I am trying to get the whole list of witnesses so that I 
can inform people about that. But we had one of the Commissioners from 
the Securities and Exchange Commission, the SEC, which currently has 
authority and responsibility to enforce the Public Utility Holding 
Company Act. The testimony of that Commissioner was very clear. Their 
testimony was that they do not support keeping that authority at the 
SEC. They do not support keeping the Public Utility Holding Company Act 
on the books. They have taken that position for the last 20 years. They 
continue to take that position. That was the position under the Clinton 
administration and that was the position under the Bush administration. 
And there was unanimous testimony to our committee that, in fact, we 
should shift this responsibility over to the Federal Energy Regulatory 
Commission, as we are proposing to do in this legislation.
  Let me clarify that the problems the Senator from Washington refers 
to are very genuine problems.
  I am sympathetic to those problems. I do think there were some 
shortcomings on the part of the Federal regulators as well as others in 
the way the crisis on the west coast was dealt with, but I point out 
that all of that happened under current law. All of that happened with 
PUHCA in force--with the Public Utility Holding Company Act in force--
and we are proposing the repeal of that and a change in the authority 
so that it can be done much more effectively.
  Our bill does nothing to deregulate electricity markets. It 
recognizes that the market depends on competition. It gives the Federal 
Energy Regulatory Commission the tools to be sure that competition does 
in fact work for consumers. We have enhanced FERC's authority over 
mergers and market-based rates. We have required new disclosure rules. 
We have required the Federal Trade Commission to issue rules to protect 
consumers.
  We take authority away from the SEC, as I mentioned, because the SEC 
has never enforced this law. We take the authority away from them and 
give it to FERC, which does understand the industry. It is the agency 
with the appropriate expertise to actually look out for consumers in 
this regard.
  The bill we have brought to the Senate floor and on which Senator 
Thomas and I have worked very hard requires four things before any 
disposition or consolidation or acquisition of utility assets is 
possible.
  It requires, first, that the Federal Energy Regulatory Commission 
determine that the proposed disposition or acquisition be consistent 
with the public interest. That is a pretty good indication.
  A second would be that they make a determination it will not 
adversely affect the interests of consumers of the electricity utility. 
That again is an important safeguard.
  Third, it requires that any acquisition, any consolidation that is 
approved by FERC be determined by FERC not to impair the ability of 
regulators to regulate the utility.
  The final thing we have required FERC to determine is that any 
acquisition that might be approved would not lead to cross-
subsidization of associated companies. We believe that is also 
important. If in fact we are going to permit companies to purchase 
utilities, to acquire utilities, to acquire utility assets, we do not 
want to see the ratepayers of the utility having their rates go to 
cross-subsidize other companies. We require that FERC make that 
determination.
  We believe the provisions we have in the bill are not only adequate 
but strengthening provisions. There are requirements in the amendment 
proposed here that go substantially further. There is a requirement 
that there be a determination that the transaction enhanced competition 
in wholesale markets. We do not believe it is an appropriate role for 
us to be blocking an acquisition unless it can be proven that it 
enhances competition. We believe a ``do no harm'' standard is the right 
standard for a regulatory agency. Clearly, that is where we come out.

[[Page 5583]]

  The one other provision which is in their amendment which we believe 
goes too far is it requires that the transaction produce significant 
gains in operational and economic efficiency. I hope very much that any 
time there is an acquisition of a utility asset or a merger or a 
consolidation of any kind, it does produce significant gains in 
operational and economic efficiency. That would be a wonderful thing. I 
don't think it is reasonable to say all acquisitions, consolidations, 
and mergers should be blocked unless they can demonstrate that they 
will in fact demonstrate or produce significant gains in operational 
and economic efficiency.
  We believe the provisions we have in the bill are the appropriate 
ones. For that reason, I will have to resist the amendment and hope 
Senators will oppose it.
  I know Senator Thomas has worked very hard on this issue as well. I 
know he is anxious to speak about it at some point.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. Madam President, I rise to speak on the amendment now 
before the Senate. As the Senator from New Mexico mentioned, he and I 
and others have worked very long and hard on this electricity portion 
of the energy bill. When the Daschle-Bingaman bill was brought to the 
floor, we went into it and tried to work at it to make it more workable 
and, indeed, more simple, to give the States more authority but 
continue to have the protection, of course, for consumers. So that is 
what we sought to do.
  I believe this amendment is not necessary. Certainly it does not add 
to but, in fact, detracts from that goal of protecting consumers and 
making the system more simple.
  It seems we have heard an awful lot about the California problem, and 
it was a difficult one. It affected the rest of the west coast States, 
of course. Senator Bingaman held two hearings to examine the California 
collapse and the Enron collapse and its impact on the energy markets. 
The result of these hearings was a clear consensus that Enron had 
little, if any, impact on wholesale or retail electric markets. So this 
continued effort to do something with FERC because of that simply 
doesn't connect. I hope we can deal with it as it is in reality.
  I rise in strong opposition to the pending amendment. The amendment 
proposes a major change in the standard FERC would use to review asset 
sales, mergers, and acquisitions. Under the proposed standard, in order 
to approve an asset sale, merger, or acquisition, FERC would have to 
affirmatively find that the action would, at a minimum, enhance 
competition in the wholesale markets, produce significant gains in 
operational and economic efficiency, and result in a corporate and 
capital structure that facilitates effective regulatory oversight.
  This proposed change in the review standard, when coupled with an 
earlier amendment adopted by the Senate, expands the type of actions 
FERC must review and puts industry restructuring into gridlock. We are 
always talking about the overamount of regulation and so on, and we 
have sought a balance here between States and FERC. This adds back to 
the problem that we sought to resolve. It will take FERC forever to go 
through the procedural steps necessary to allow even the most mundane 
asset sale.
  Slowing restructuring and competition would be bad for both 
competition and consumers. The amendment also establishes a full new 
set of rules and procedures for FERC to follow in regulating the 
wholesale power market. It gives FERC sweeping authority to do just 
about anything it wants to do--the very provisions that the bipartisan 
Thomas amendments adopted by the Senate struck from the underlying 
Daschle-Bingaman bill. That is what we voted on before. Now we are 
seeking to go back to what we tried to eliminate and did eliminate.
  The amendment also modifies the Banking Committee PUHCA repeal 
provisions. For example, the pending amendment takes away the 
provisions dealing with State access to utility books and records. That 
is a part of the Banking-reported bill. The amendment also imposes a 
host of new transaction approval requirements under the guise of so-
called transaction transparency. The transaction transparency 
provisions of the amendment do not just require the disclosure of 
information, they require FERC preapproval of all interaffiliated 
purchases, sales, leases, or transfer of assets, goods or services, and 
financial transactions.
  Talk about creating a regulatory nightmare--Federal bureaucratic 
redtape--this is it.
  Madam President, it is not clear what problems this amendment is 
intended to address that are not already addressed by other provisions 
or existing law.
  It cannot be aimed at curbing market power since it makes it more 
difficult for utilities to sell assets, such as generation and 
transmission.
  It cannot be aimed at protecting consumers from undue price increases 
because, under existing law, FERC has jurisdiction over wholesale rates 
and the State public utility commissions have jurisdiction over retail 
rates.
  With or without this amendment, the retail/wholesale electric rates 
have been and will continue to be subject to State and Federal review. 
Moreover, this issue is already addressed in the bipartisan electricity 
amendments adopted by the Senate on March 13.
  For the benefit of the Senate, let me read some of the language from 
the amendment adopted by the Senate.
  Section 203 of the Federal Power Act, as amended by the bipartisan 
amendment, will read:

       No public utility shall, without first having secured an 
     order of the Commission authorizing it to do so . . . merge 
     or consolidate, directly or indirectly . . . by any means 
     whatsoever.
       The Commission shall approve the proposed disposition, 
     consolidation, acquisition or control, if it finds that the 
     proposed transaction--
       (A) will be consistent with the public interest;
       (B) will not adversely affect the interest of consumers; 
     and
       (C) will not impair the ability of FERC or any State 
     commission . . . to protect the interests of consumers or the 
     public.

  Exactly. It is already there. Frankly, we are wasting our time with 
this.
  In addition, there are other consumer protection provisions already 
in the underlying bill.
  For example, in the PUHCA title there are provisions which 
specifically give FERC and State public utility commission access to 
books and records so that they can do their job to protect consumers. 
In the PUHCA title there is a Federal task force to review the status 
of competition. In the PUHCA title there is a provision requiring a GAO 
study and report on competition. And in another amendment, the Senate 
has already adopted an office of Consumer Advocacy in the Department of 
Justice.
  Mr. President, in today's rapidly changing electric marketplace, 
utilities need to be able to buy and sell generation and other assets 
in order to be able to respond quickly to market conditions. This 
amendment will tie FERC and industry restructuring up in red tape.
  I ask: How does slowing industry restructuring and handicapping 
competition benefit consumers?
  We know the answer. It doesn't.
  Requiring utilities to wait months--possibly years--for FERC to 
review and approve even relatively routine transactions simply does not 
make sense. It satisfies no public purpose, and it threatens to bury an 
already overburdened FERC staff in a blizzard of needless paper 
shuffling.
  In sum, the proposed amendment appears to be a heavy-handed solution 
in search of a non-existent problem to solve. It is an extreme 
amendment that is intended to overturn a bipartisan, Senate-adopted 
amendment. It appears to be a thinly-disguised attempt to throw sand in 
the gears of competition, not to improve the legislation.
  The amendment should be rejected.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Ms. STABENOW. Madam President, I rise today to proudly support the 
Cantwell amendment which I am very pleased to be cosponsoring.

[[Page 5584]]

  I thank the Senator from New Mexico for all of his leadership, 
overall, on this important energy package. He has had a thankless job. 
There has been a tremendous amount of work. While I respectfully 
disagree with his position on this amendment, I commend him for his 
incredible leadership in this effort.
  I am very pleased to support this amendment which would add important 
and much-needed consumer protection to the Senate energy bill. The 
Senate energy bill repeals most of what is called PUHCA. Many people 
are not aware of what that is and how important it is in terms of 
protecting consumer prices as it relates to electricity. It is the 
Public Utility Holding Company Act. This would repeal it without 
putting in place any protections to ensure that consumers are in fact 
protected.
  Now, in light of what happened with Enron, what happened on the west 
coast with the electricity crisis, we need to be strengthening consumer 
protections, not weakening them. Last spring, when the Senate Banking 
Committee took up PUHCA repeal, I in fact was the only member of the 
committee who voted against that because I believed we should not be 
doing that independently of a larger focus to guarantee that if the 
bill were repealed--the statute--we in fact would keep the consumer 
protections in the act which are so critical. So I voted against that 
bill.
  I believe we should be including this in the context of a broad bill, 
such as the Senate energy plan, that would include consumer and 
competitive protections. I believe this amendment puts into place those 
important consumer protections and competition protections.
  This amendment would ensure that utility company mergers ``advance 
the public interest'' in order to be approved by FERC. That is a very 
important principle. FERC would assess the impact on the public 
interest by examining such criteria as the merger's effects on 
competition, economic efficiency, and regulatory oversight. We need to 
ensure that utility mergers promote, and not undermine, competition. 
That is what this amendment would do.
  This amendment would also establish clear rules and enforcement 
procedures to prevent a repeat of soaring electricity rates in 
deregulated markets that are not really competitive. This amendment 
would also protect consumers from unjustified rate hikes and help 
ensure fair and competitive markets.
  The amendment also would provide more transparency in the utility 
market to protect consumers from situations like Enron. The amendment 
would require public disclosure of financial transactions between 
holding companies, utilities, and their affiliates, as well as FERC 
preapproval of transactions that are not publicly disclosed.
  This has been a real issue for small businesses in Michigan. The 
amendment would protect consumers from the costs and risks of utility 
diversification and prevent utilities from unfairly subsidizing their 
affiliates that compete with small businesses, with independent 
businesses--those that sell the furnaces, air-conditioners, and so on. 
This has been an important issue in Michigan where many of my small 
businesses have been concerned about competing against utility 
companies that are able to have their prices subsidized.
  Finally, the amendment would give State and Federal regulators 
enhanced access to books and records. If we are going to move to a 
truly competitive utility market, we need to reshape FERC's role in the 
market. We need to increase the market transparency and make certain 
that consumer protections are maintained.
  I strongly urge my colleagues to support this amendment. I believe it 
is absolutely necessary as we move into this deregulated marketplace to 
make sure there really is competition to lower prices, there is 
accountability, transparency, and in fact in the end all of our 
consumers, the citizens of the country, are protected.
  I thank the Chair.
  Mr. FEINGOLD. Madam President, I rise in support of amendment 3234 
offered by my colleague from Washington, Ms. Cantwell, and I am pleased 
to be a cosponsor.
  I support and have been actively involved in the drafting of this 
amendment, which includes provisions from the sponsors of amendment 
3097, Mr. Wellstone and Mr. Dayton, on mergers as well as provisions 
from the Senator from California, Mrs. Boxer, and the Senator from 
Oregon, Mr. Wyden.
  These amendments would improve on the bill by making clear the 
actions that the Federal Energy Regulatory Commission, or FERC, must 
take in determining that proposed mergers in the electric power sector 
advance the public interest in order to secure Federal regulatory 
approval. Those of us who have worked on this package are deeply 
concerned about the effects of deregulation of the electric power 
sector.
  The underlying bill says that FERC would have to determine that 
mergers be ``consistent with'' the public interest, a more typical 
standard used by other agencies reviewing other mergers, like the 
Federal Trade Commission.
  My concern is that electricity is not just 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. As my colleague from Minnesota, Mr. Wellstone, noted 
earlier in the debate on this bill, in the last past 3 years alone, 
there have been more than 30 major utility mergers and acquisitions, 
including several in my own home State and with utilities in Minnesota 
that serve Wisconsin. Many merchant generating companies have seen 
their stock prices plunge and credit ratings downgraded, and these 
companies are now prime buy-out targets.
  I acknowledge that utility mergers are not inherently bad and should 
not be prevented. Such mergers can produce efficiencies, economies of 
scale and cost savings for electrical consumers. A merger can, however, 
also reduce competition, increase costs, and frustrate effective 
regulatory oversight.
  In Wisconsin, we have been concerned about efforts to aggressively 
push electricity deregulation, because we are served in my state by a 
diverse number of local utilities: municipal utilities, electric 
cooperatives and investor-owned utilities. This diversity of electrical 
suppliers, about which my colleagues from Minnesota have eloquently 
spoken, are absolutely critical parts of our small rural communities.
  In many cases, Wisconsin's rural coops and rural municipal utilities 
are the only entities interested in serving the electrical needs of the 
rural parts of my State. If we deregulate, we shouldn't create an 
environment that leaves these communities behind.
  Federal electricity merger review policy should distinguish between 
those mergers that promote the public interest and protect our local 
sources of electrical power and those that don't. In proposing to amend 
the Federal Power Act to change FERC's merger review standard we are 
seeking to require merger applicants to show that the merger, which 
eliminates a competitor in a marketplace, provides affirmative benefits 
to the public that are not achievable without merger. Thus, the utility 
seeking the merger approval would need to show that the merger provides 
tangible public benefits by increasing competition or lowering prices 
through increased efficiency.
  The amendment would improve on the language in the underlying energy 
bill in several ways. First, the language requires that proposed 
mergers promote the public interest in order to secure Federal 
regulatory approval. Second, the amendment spells out specific 
standards for assessing the impact on the public interest, including 
effects on competition, operational and economic efficiency, and 
regulatory oversight. Finally, this amendment prevents utilities from 
skirting Federal

[[Page 5585]]

review by using partnerships or other corporate forms to avoid 
classification as a ``merger.''
  I want to address concerns that some of my colleagues may have about 
the scope of this amendment. This amendment does not impose new 
regulatory requirements on proposed utility mergers. Rather, the 
standards contained in the amendment mirror those contained in the 
Public Utility Holding Company Act, or PUHCA, which the bill before us 
would repeal. While the standards are comparable, the amendment 
provides greater flexibility than exists under PUHCA. PUHCA requires 
that utilities be physically integrated in order to merge; the 
amendment waives that requirement. PUHCA also prevents the merger of 
multi-State electric and gas utilities; the amendment waives that 
requirement while providing for FERC review of such mergers.
  I also want to speak in favor of language that my colleague from 
Oregon, Mr. Wyden, and I developed on transactions between utility 
company affiliates. This amendment protects consumers from assuming the 
costs and risks of utility diversification into non-utility businesses 
and prevents utilities from subsidizing affiliate ventures and 
competing unfairly with independent businesses.
  The language that the Senator from Oregon, Mr. Wyden, and I worked to 
include in this package does three things. First, it extends to 
electricity suppliers the requirements we placed upon 
telecommunications companies when we repealed PUHCA in the 
telecommunications sector in 1996 in the Telecommunications Act. 
Second, it requires utilities to disclose all transactions with 
affiliates, including those that are off the books or with overseas 
affiliates. Finally, it establishes safeguards regarding the purchase 
of goods and services between the utility and their affiliates.
  These provisions are needed, because we are already experiencing 
concerns about utilities expanding into electricity related services 
and out competing 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 
PUHCA 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 a diversity of energy 
supply and fairness in a deregulated system to support this amendment.
  Mrs. MURRAY. Madam President, I want to speak for a moment about the 
Consumer Protection Amendments being offered by Senator Dayton and a 
number of co-sponsors, including myself. I want to thank all of my 
colleagues who have been working hard to improve this bill, 
particularly, my colleague from Washington, Senator Cantwell, who has 
pushed to bring this amendment to a vote today.
  This consumer protection amendment improves this bill by providing a 
number of much needed consumer protections for electricity customers. I 
have spoken a number of times expressing my concern regarding enacting 
broad, far-reaching electricity de-regulation in these turbulent times. 
California's attempts to deregulate electricity markets were 
disastrous. We are all still trying to figure out what happened to 
Enron and thousands of retirement and saving accounts. Consumers in the 
Pacific Northwest are still paying for some of the aftereffects of 
these events.
  Repealing the Public Utility Holding Company Act, which was enacted 
in 1935, without adding strong consumer protections would be 
irresponsible. In this energy bill, we are also contemplating major 
changes to the Publicly Utility Regulatory Policies Act and the Federal 
Power Act.
  When making these changes, it is essential that we make sure 
consumers do not suffer. A number of people have indicated that 
appropriate consumer protections are already in place in the underlying 
bill.
  I disagree. I think that additional consumer protections are 
necessary.
  This amendment strengthens the consumer protections by: ensuring 
electric holding company mergers advance the public interest; requiring 
FERC monitor and prevent market power abuses; ensuring market abuses 
are remedied; ensuring open access to utility holding company records 
by State Regulatory Commissions; and, requiring transparency in market 
transactions.
  These provisions will greatly improve the electricity title of this 
bill and I am proud to be a co-sponsor. I encourage my colleagues to 
also lend their support.
  Energy is very important to our quality of life, particularly in the 
Pacific Northwest. The electricity title of this bill continues to 
concern me and many in the Northwest. However, it is important that we 
all work together to develop an energy bill that will benefit the 
entire country.
  The PRESIDING OFFICER. The Senator from Washington is recognized.
  Ms. CANTWELL. Madam President, I want to take an opportunity to 
respond to a few points my colleagues made about this amendment, which 
I think is necessary in protecting consumers.
  It does repeal PUHCA and takes that measure off the books. What is 
important about that is, while we can say our current law didn't 
protect us from the mishaps in the California market and the Western 
energy crisis, it certainly means we should not be lowering the 
standard and taking away more consumer protections.
  I applaud the chairman of the committee for trying to focus more 
attention in a particular area of energy expertise, to say let's look 
at these problems. But what we are doing by also saying let's have the 
energy expertise within FERC look at these problems, we are also 
saying, look at these problems within a framework that is less onerous 
on the energy companies; let's lower the legal standard by which they 
have to come before the Commission. And, basically, instead of saying 
they have to serve the public interest, they go for a lower standard by 
which those mergers can be completed.
  It gives FERC the ability, with market-based rates, something they 
have never statutorily had. So instead of the consumers being able to 
have cost-based rates on electricity, we are saying, for the first time 
in statutory authority, they can charge market-based rates.
  But we are saying charge market based-rates, and we are saying you 
don't have to consider some of the same things that ought to be 
considered, given that we are repealing PUHCA; and that is: What is in 
the public interest, and how is it advancing the public interest, how 
is it preventing unjust and unreasonable rates?
  If we have learned anything from the California experience, it is 
that there has not been enough clout within a singular agency in the 
Federal Government to adequately protect consumers from unjust and 
unreasonable rates. They have not had enough protection.
  That is why the AARP, the American Public Power Association, the 
Consumers Union, the Sierra Club, the U.S. Conference of Mayors, the 
Air Condition Contractors of America, the Consumer Federation of 
America, the Consumers for Fair Competition--all these organizations 
support this amendment, including the Electricity Consumers Resource 
Council, the National Association of State Utility Consumer Advocates, 
the National Environmental Trust, the National League of Cities, the 
National Rural Electric Co-op Association, the National Resources 
Defense Council, the Transmission Access Policy Study Group, the Union 
of Concerned Scientists, and U.S. Public Interest Research Group.
  All these organizations are warning us, telling us, there are not 
enough consumer protections as this bill moves from having the PUHCA 
law on the books and having the SEC involved to FERC authority, which 
albeit could play a more responsible role and one with larger 
oversight, but we are not giving them the direction to do so in this 
bill. We are repealing those statutes that would give them specific

[[Page 5586]]

standards by which to measure both these issues of market-based rates 
and mergers. We are giving new responsibility to an organization and 
taking away the consumer protections.
  It does not make sense, in this time and era of an energy crisis in 
the West, where consumers have been gouged, where FERC has not been 
able to protect consumers before the incident in reviewing statistics 
and after the incident, to now say, Let's lessen the standard by which 
FERC should be involved, let's give them more authority to allow the 
energy companies to move more quickly, to move more aggressively 
without oversight on increasing electricity rates.
  We cannot say to the consumers of America that we learned nothing 
from the Western energy crisis. We cannot say that to them. We have to 
adopt this amendment and say we know that, while we are repealing some 
laws and putting more responsibility on FERC, we are going to make sure 
consumers are protected.
  I urge my colleagues to adopt this very needed consumer protection 
amendment.
  The PRESIDING OFFICER. The Senator from California.
  Mr. REID. Madam President, will the Senator yield for a brief 
announcement?
  Mrs. BOXER. Yes, I will be glad to yield.
  Mr. REID. Madam President, we expect a vote on this matter within the 
next 15 or 20 minutes. All Senators should be aware there will be an 
effort to vote in the near future. All Senators should be aware of 
that.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. I thank the Chair.
  Madam President, I thank my friend and colleague, Senator Maria 
Cantwell, and Senator Dayton for bringing this amendment to the floor. 
I am a strong cosponsor of it.
  Senator Cantwell made a point that we need to learn what happened to 
those of us on the west coast who went through a terrible crisis in 
electricity and runaway price hikes. We all know if we do not look at 
history and the mistakes that were made, we are going to repeat those 
mistakes.
  What the Senator from Washington is trying to do--and some of us are 
strongly behind her--is to tell the rest of our colleagues that we hope 
they prepare against what happened to us and make sure consumers are 
not forgotten.
  I am stunned that there would even be objection to this amendment. 
All we are doing is ensuring that since PUHCA was repealed, we want to 
make sure the standard is not lowered. We want to make sure consumers 
are protected.
  I can guarantee that those who vote for this bill, if this amendment 
goes down, are going to be back here complaining that they really did 
not understand what we were doing when we did not protect consumers. 
How do I know this? Because it is clear. What did we learn from Enron? 
Remember Enron? We learned that they did everything in secret. They did 
everything in secret. They sold the same electricity 15 times over. 
This is according to testimony from the people in California who 
suffered the consequences.
  I guess, I say to my colleague, if the rest of this Senate wants to 
see an energy crisis happen in their States, all we can do is offer up 
this amendment as a way to stop it. But in the underlying bill, there 
is very little transparency. We need to make sure the books and records 
of these companies are open and they are clear so that my colleagues in 
their States can see why their prices are going up 100 percent, 200 
percent, 300 percent. In our case, it was over a 500-percent increase 
in the price of electricity. By the way, demand was going down.
  It is extraordinary. One year ago, April 2001, wholesale electricity 
was selling for $201 per megawatt. A year earlier before the crisis 
began, it was $32 per megawatt. It went up $32 to $201. That is a 528-
percent increase.
  Why did it happen? Because of deregulation. The problem is, there was 
no transparency. Everyone was paying more. We had rolling blackouts. We 
had horrible problems. Believe me when I tell you, Madam President--you 
know this because you have visited California often--this is a State 
that, if it was a nation, according to our gross domestic product, 
would be the fifth largest nation in the world. When I started in 
politics, we were ninth. It shows you how long I have been in politics, 
but it also shows the incredible growth of our agricultural sector and 
Silicon Valley and their need to have electricity.
  Mind you, it is not wasted. California now is the No. 1 State in 
energy efficiency per capita. During the crisis, our demand went down. 
No one can tell us our prices went up because demand went up, which is 
what the Vice President said. Our demand went down. We have been 
amazing at saving.
  Someone has to look out for the consumer, and that is why I support 
what Senator Cantwell is doing.
  I, frankly, believed repealing PUHCA in the underlying bill was not 
the way to go. That was my opinion. But since we have taken the matter 
of PUHCA and transferred those responsibilities to FERC, let's at least 
make sure FERC has the same opportunity to learn the facts as the SEC 
did under PUHCA. That is why this amendment is so important.
  This is what Loretta Lynch, the president of the California Public 
Utilities Commission, testified last week before the Commerce Committee 
about FERC and the weakening of its reporting requirements. Ms. Lynch 
testified:

       FERC has over the past few years at the urging of Enron and 
     others diluted the reporting requirements, loosened the 
     accounting rules and exempted large classes of energy sellers 
     from making required disclosures.

  This is not from me. This is from someone on the ground, the head of 
our public utilities commission. Then she goes on to say:

       FERC does not even require the same data to be filed in its 
     quarterly reports, allowing companies like Enron to hide the 
     true nature and extent of activities through skeletal public 
     reporting and not be called to account by FERC.

  The bottom line is, with this amendment, we are trying to restore 
some transparency. We need to see what these companies are doing.
  As I say, it is stunning to me that we do not have support for this 
amendment, which is very modest in what it tries to do. The Senator 
from Washington has taken the critiques of this amendment and has 
answered one point at a time. The critiques we have heard in this 
debate simply are not right.
  One of the claims is that we keep PUHCA on the books. How ridiculous. 
PUHCA is repealed. We do not bring it back. All we are saying is now 
that the underlying bill gives the responsibility of PUHCA to FERC, 
there ought to be some rules that show we care about the consumer and 
that the consumer will not be forgotten.
  In closing, I think the Senator from Washington knows her stuff on 
this. She is on the Energy Committee. She gets it. She is taking the 
lessons of the west coast, what happened to our consumers, which was 
devastating, and saying to everyone: Please listen to us. We want to 
avoid this in the rest of the country. That is why she has the support 
of the AARP. Older Americans are the ones who get caught. They live on 
fixed incomes. When those electricity prices go up, it is not fun and 
games. This is real people suffering. They suffered in Oregon, they 
suffered in Washington, and they suffered in California.
  So what are we doing in this bill? Nothing to really help them. We 
are ensuring this cannot happen elsewhere, and that is why we have so 
many others supporting this amendment, such as the Consumer Federation 
of America, the Consumers for Fair Competition, the Consumers Union, 
the Electricity Consumers Resource Council, the National Alliance for 
Fair Competition, the National Association of State Utility Consumer 
Advocates, the National Environmental Trust, the National League of 
Cities, the National Rural Electric Cooperatives Association, the 
Natural Resources Defense Council, the Physicians for Social 
Responsibility.
  This is a health issue when people cannot turn on the air-
conditioning. If

[[Page 5587]]

we do not protect the consumers, we have problems. Public Citizens 
supports this amendment, the Sierra Club, the U.S. Conference of 
Mayors, the Union of Concerned Scientists, and the U.S. Public Interest 
Research Group. This is the consumer protection package.
  My colleague from Washington did a good job. She took amendments from 
those of us who were looking at different areas where we thought the 
bill did not reach the level of consumer protection it should and put 
them into an omnibus amendment. I congratulate her.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Washington.
  Ms. CANTWELL. Madam President, I appreciate the comments of the 
Senator from California on the amendment. I also appreciate her support 
for it and her articulation of the problem.
  I ask the Senator from California--obviously, both of our States are 
being greatly impacted from this crisis. I think we have had numerous, 
thousands, of constituents who ask us how we got into this situation 
and ask us exactly how this situation occurred to this degree and why 
there were not more Federal protections in place.
  Given the impact to both Washington and California, consumers want to 
know how is it this kind of deregulation went through at the State 
level and then certain protections were not in place at the Federal 
level.
  Before the Senator from California leaves the Chamber, I ask if she 
would answer this question about her constituents' desires to see a 
safeguard at the Federal level to make sure that further deregulation, 
and the incurring investigation of high energy prices, are adequately 
dealt with and whether consumers believe these protections have been 
adequately up to date, because in my State people have said repeatedly, 
where is the Federal role and responsibility in making sure these 
consumers were not gouged?
  In California, a new system was put in place. The Federal Energy 
Regulatory Commission was supposed to oversee that and to judge whether 
it was going to work as far as market-based rates, and clearly it did 
not work. Not only did FERC approve it, it did not monitor it after it 
went into place. It did not stop and say that unjust and unreasonable 
rates are gouging consumers in California, until the lights went out.
  So why would we now say--and I am curious as to the Senator's 
experience in hearing from constituents about this Federal role--to 
them, we are going to consolidate and make it even easier; put 
authority under FERC and weaken the standard? Not only are we going to 
give them direction, but we are going to say we are going to give them 
less tools to play that role; we are going to give them a lower legal 
standard by which to review these; we are going to allow them to make 
market-based decisions without the criteria of respecting the consumers 
and protecting and advancing their interests as they look at mergers.
  I am curious as to the California experience. I know the experience 
has been clear in my State. They wanted unjust and unreasonable rates 
to be looked at when they were being charged 85 percent more. They 
thought it was very clear that was unjust and unreasonable. In my 
State, these people have to live with 8- and 9-year Enron contracts.
  As my California colleague said, they sold power 15 times to 
different people. They are literally buying power at a cheap rate and 
within my State selling it at an increase, double, triple the increase, 
to other consumers in my State. They are getting away with it, and FERC 
is doing nothing to make sure those rates are being investigated as 
unjust and unreasonable, and they are not letting my constituents out 
of those long-term contracts in the next maybe 8 or 9 years of 85-
percent increases in energy prices.
  So why would States that have been impacted want to give FERC the 
direction but say, here are the legal standards, they are less than 
they were before, so go at this business? So if my colleague from 
California could comment on her experience in that Federal role and 
what it is that safeguards constituents who have been harmed in 
personal situations and in economic businesses.
  States' economies have been ruined over this situation, and now we 
are saying to them that our colleagues are going to provide less 
protections for them.
  Mrs. BOXER. That is the key. The fact is, in our States--I will just 
talk to my State--the only agency we had to protect us was FERC. FERC, 
under the Clinton administration, found that the prices were unjust and 
unreasonable. Then there was a switch in administrations and they never 
repealed that. They admitted they were unjust and unreasonable, but 
they did absolutely nothing to help us--for 1 year. We were talking 
about billions of dollars of costs. The long-term contracts were signed 
under duress by our Governor because the spot market was so impossible 
he tried to get some of the demand away from the spot market, went into 
these long-term contracts. Fortunately, he has begun to renegotiate 
those.
  We have asked FERC to help us renegotiate most of them. It is 
stunning to me that this underlying bill gives so much more power to 
FERC when under the law as it existed they did nothing to help our 
people for 1 year. They finally put in place the market-based pricing 
and, by the way, it cured our problem.
  After this administration saying for a year that it would not cure 
our problem, it cured our problem. Those market-based prices are set to 
expire in September, and already the new Chairman of FERC has hinted 
that he is not going to reimpose those price caps.
  So I say to my colleague, the only agency--because we had deregulated 
in our State, and believe me there was enough blame to go around. It 
was a bipartisan deregulation recommended by Pete Wilson, our then-
Governor, and it went through. Enron and others had absolutely no one 
looking over their shoulder, and the only agency that could have done 
anything to help us against unjust and unreasonable prices was FERC. 
The bottom line is: They did nothing for a year. It was a disaster.
  In this underlying bill, we are giving FERC even more work by 
repealing PUHCA, which was administered by the SEC, and giving it over 
to FERC, and having very few requirements on the open books and 
records.
  So a company such as Enron--Enron is gone. They said California would 
sink, but they sank. We are OK. They sank. But there is going to be 
Enron II and Enron III and Enron IV because, unfortunately, they showed 
how it could be dealt with, at least in the short term. When that 
happens under the underlying bill, there is very little that FERC will 
be able to get at in terms of the transparency of the records.
  The one thing we learned was there was a lot of secrecy going on. The 
sale of electricity--Enron was a broker, in between the generators and 
the consumers, so Enron would go buy electricity from a generator at a 
pretty good price for the generator but then they would sell it to 
themselves, 14 times to subsidiaries. Each time they showed a profit on 
the books to make Enron look more successful, more profitable, and each 
time they jacked up the rates until it got to the final sale at 520 
percent--sometimes higher--than it was the year before, and that became 
the benchmark price. All this was secret.
  We have an opportunity in an energy bill to make sure this experience 
does not happen again. What do we do? We step back. That is why the 
consumer groups in this country are absolutely upset about this bill 
and why they have come together in an unprecedented number. I ask 
unanimous consent to have the list of organizations supporting this 
amendment printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                Support the Consumer Protection Package

       Amendment #3097, offered by Senators Dayton, Wellstone, 
     Feingold, Cantwell, Boxer and Wyden, would add crucial 
     consumer protections to the electricity title of

[[Page 5588]]

     the Senate energy bill, incorporating lessons learned from 
     the Western electricity crisis and Enron's collapse.
       AARP.
       Air Conditioning Contractors of America.
       Alliance for Affordable Energy.
       American Public Power Association.
       Consumers Federation of America.
       Consumers for Fair Competition.
       Consumers Union.
       Electricity Consumers Resource Council.
       National Alliance for Fair Competition.
       National Association of State Utility Consumer Advocates.
       National Environmental Trust.
       National League of Cities.
       National Rural Electric Cooperatives Association.
       Natural Resources Defense Council.
       Physicians for Social Responsibility.
       Public Citizen.
       Sierra Club.
       Transmission Access Policy Study Group.
       U.S. Conference of Mayors.
       Union of Concerned Scientists.
       US Public Interest Research Group.
       Vote ``Yes'' on the Consumer Protection Package.

  Mrs. BOXER. They have come together behind Senators Cantwell and 
Dayton to say: Please, fix this bill. Do not do what California did.
  Just because something is changing does not mean it is changing in a 
right way. We have to be very careful. Did we learn anything in 
California, Washington, and Oregon? The word ``deregulation'' is a 
beautiful word. I love it. I wish we didn't need regulations, and I 
wish everyone did everything right. However, in a society where you 
must have your heat and you must have your air because you must run a 
business, you must make sure an elderly person in summer does not 
suffer from the dangers of heat exhaustion, you have to have a way to 
make sure this important need is not forgone.
  I thank my friend. The California experience is forever seared in my 
mind and heart. I don't want other States to go through the same thing. 
This amendment will help in that regard. I hope the Senator wins this 
amendment. The way things are going, we may not make it. But we are on 
the right side. We are not going to give up. Just as we learned in 
California, we can vote a lot of things in, but when the people say, 
What are you doing, we come back here pretty darn quick. From my 
experience in California, this is not the way to go. This underlying 
bill is not the way to go. My friend has pinpointed the need for 
consumer protections.
  I thank the Senator.
  Ms. CANTWELL. I thank my colleague from California for her articulate 
rendering of what has happened in the California market and the 
complexity of this issue. She is right, the consumers have asked, Where 
have the Federal role and responsibility been? People in our States did 
not think FERC responded quickly enough and do not believe FERC has all 
the tools now necessary to protect other States from this same thing 
happening again or to conduct the investigation that needs to take 
place to make sure consumers are not gouged after September when the 
expiration of this current FERC order occurs.
  We are saying: If you are going to give FERC the responsibilities and 
repeal PUHCA, and also change from SEC to FERC authority, we are giving 
FERC real responsibility with no statutory guidance. But then we are 
essentially saying--wink, wink--we are not giving you any of the tools 
to enforce these authorities; we want you to just be part of the 
equation but not have any statutory authority to make the 
investigations. Let's say instead: You can proceed with market-based 
rates instead of cost-based rates. But if you are going to proceed with 
market-based rates, you must make sure there are competitive markets. 
You must make sure you effectively monitor those markets. You must make 
sure you prevent the abuse of those market powers. You must make sure 
you are protecting the consumer interests, and you must ensure that 
there are just and reasonable rates. That seems to me to be very fair, 
that these consumer issues are protected in legislation. That is all we 
are asking.
  If we are going to give responsibility to FERC, let's make sure we 
tell them to protect the consumer interests, not the big business 
interests that have caused so much economic devastation in the West.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. I will speak briefly in response to some of the 
comments made, and then I will move to table the amendment.
  We have had a good debate about it. I will speak about three aspects: 
First, the argument, the allegation, that we are, in the underlying 
bill before the Senate, agreed to on a bipartisan basis, lowering the 
legal standard. That is one of the arguments that has been made. It is 
simply wrong. We are not lowering the legal standard. The legal 
standard is, and always has been, that determinations be consistent 
with the public interest; that acquisitions, mergers, consolidations, 
be consistent with the public interest.
  What we are doing is saying that, for mergers, we have enhanced the 
authority and responsibility of the Federal Energy Regulatory 
Commission by saying that not only must they determine it is consistent 
with the public interest, which has been the standard in the past, we 
are requiring them to determine that consumers will not be harmed--that 
is, consumers, ratepayers of existing utilities, will not be harmed. We 
are requiring them to make a determination that regulation, either 
Federal or State regulation, will not in any way be impaired. And we 
are requiring FERC to make a determination that there will be no cross-
subsidy to any other company than the company being acquired or merged.
  What we are doing is increasing the responsibilities we are imposing 
on FERC. A lot of criticism has been leveled against FERC in the way 
they responded on the west coast. I agree with much of that. I think 
they were very slow to respond to the spike in prices in California and 
the Northwest. I was critical at the time, and I continue to be 
critical that they were slow to respond. We are putting an affirmative 
duty on FERC to step in anytime there is evidence that a market-based 
rate is not just and reasonable. It is FERC's responsibility under the 
language we have to withdraw those market-based rates and to require 
just and reasonable rates.
  That is a new responsibility we are imposing. It is an appropriate 
responsibility. The argument that, because they did not move quickly 
enough under current law, we should now go ahead and change the law to 
give them this new responsibility does not make sense to me.
  With regard to the provisions the Senator from California was raising 
about the transparency of books and records, I agree entirely that the 
books and records of any and all of these companies that are subject to 
regulation should be open for inspection. The provisions we have in the 
bill require each of these companies to maintain and make available to 
FERC the books, accounts, the memoranda, the records, that the 
Commission deems relevant to the costs that are incurred by that public 
utility. Each affiliate company is also required to do the same.
  There is a provision saying that the right of States to request 
books, records, accounts, memoranda, and other records they identify in 
writing as needed by the State commissioner--that right for them to 
obtain those is also protected.
  We have in this underlying bill the protections that are required for 
consumers. I am persuaded that the enactment of this legislation, this 
title 2, this electricity provision, will cure many of the problems the 
Senators from Washington and California have been concerned with--and 
very rightly concerned with this last year.
  I think the argument that we are not dealing with these issues is 
wrong. I urge my colleagues to join us in tabling this amendment which 
would undermine the bipartisan agreement we made on this provision some 
weeks ago.
  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 to table the amendment No. 
3234. The clerk will call the roll.

[[Page 5589]]

  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle) 
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) is necessarily absent.
  The PRESIDING OFFICER (Mrs. Murray). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 58, nays 39, as follows:

                      [Rollcall Vote No. 80 Leg.]

                                YEAS--58

     Akaka
     Allard
     Allen
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Carper
     Cleland
     Cochran
     Craig
     Crapo
     DeWine
     Domenici
     Ensign
     Enzi
     Fitzgerald
     Frist
     Gramm
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Landrieu
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Mikulski
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Roberts
     Rockefeller
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner

                                NAYS--39

     Baucus
     Boxer
     Byrd
     Cantwell
     Carnahan
     Chafee
     Clinton
     Collins
     Conrad
     Corzine
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Kennedy
     Kerry
     Kohl
     Leahy
     Levin
     Lieberman
     Murray
     Nelson (FL)
     Reed
     Reid
     Sarbanes
     Schumer
     Smith (OR)
     Snowe
     Stabenow
     Wellstone
     Wyden

                             NOT VOTING--3

     Daschle
     Helms
     Johnson
  The motion was agreed to.
  Mr. BINGAMAN. Madam President, I move to reconsider the vote.
  Mr. REID. 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. BINGAMAN. Madam President, I believe the clerk was going to 
report the amendment by the Senator from Nebraska.


                Amendment No. 3140 To Amendment No. 2917

  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Nebraska [Mr. Nelson], for himself, Mr. 
     Smith of Oregon, and Mr. Craig, proposes an amendment 
     numbered 3140 to amendment No. 2917.

  Mr. NELSON of Nebraska. Madam President, I ask unanimous consent that 
reading of the amendment be dispensed with.
  Mr. BINGAMAN. Mr. President, I call up amendment No. 3316 and ask for 
its immediate consideration.
  The PRESIDING OFFICER. Is the Senator objecting to terminating the 
reading?
  Mr. BINGAMAN. I do not object to terminating the reading. I do call 
up amendment No. 3316 and ask for its immediate consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Strike Title III and insert the following:

     SEC. 301. ALTERNATIVE CONDITIONS AND FISHWAYS.

       (a) Alternative Mandatory Conditions.--Section 4 of the 
     Federal Power Act (16 U.S.C. 797) is amended by adding at the 
     end the following:
       ``(h)(1) Whenever any person applies for a license for any 
     project works within any reservation of the United States 
     under subsection (e), and the Secretary of the department 
     under whose supervision such reservation falls (in this 
     subsection referred to as the Secretary) shall deem a 
     condition to such license to be necessary under the first 
     proviso of such section, the license applicant may propose an 
     alternative condition.
       ``(2) Notwithstanding the first proviso of subsection (e), 
     the Secretary of the department under whose supervision the 
     reservation falls shall accept the proposed alternative 
     condition referred to in paragraph (1), and the Commission 
     shall include in the license such alternative condition, if 
     the Secretary of the appropriate department determines, based 
     on substantial evidence provided by the license applicant, 
     that the alternative condition--
       ``(A) provides for the adequate protection and utilization 
     of the reservation, and
       ``(B) will either--
       ``(i) cost less to implement or
       ``(ii) result in improved operation of the project works 
     for electricity production as compared to the condition 
     initially deemed necessary by the Secretary.
       ``(3) The Secretary shall submit into the public record of 
     the Commission proceeding with any condition under subsection 
     (e) or alternative condition it accepts under this subsection 
     a written statement explaining the basis for such condition, 
     and reason for not accepting any alternative condition under 
     this subsection, including the efforts of the condition 
     accepted and alternative not accepted on energy supply, 
     distribution, cost, and use, air quality, flood control, 
     navigation and drinking, irrigation, and recreation water 
     supply, based on such information as may be available to the 
     Secretary, including information voluntarily provided in a 
     timely manner by the applicant and others.
       ``(4) Nothing in this subsection shall prohibit other 
     interested parties from proposing alternative conditions.
       ``(b) Alternative Fishways.--Section 18 of the Federal 
     Power Act (16 U.S.C. 811) is amended by--
       ``(1) inserting ``(a)'' before the first sentence; and
       ``(2) adding at the end the following:
       ``(b)(1) Whenever the Secretary of the Interior or the 
     Secretary of Commerce prescribes a fishway under this 
     section, the license applicant or the licensee may propose an 
     alternative to such prescription to construct, maintain, or 
     operate a fishway.
       ``(2) Notwithstanding subsection (a), the Secretary of the 
     Interior or the Secretary of Commerce, as appropriate, shall 
     accept and prescribe, and the Commission shall require the 
     proposed alternative referred to in paragraph (1), if the 
     Secretary of the appropriate department determines, based on 
     substantial evidence provided by the license, that the 
     alternative--
       ``(A) will be no less protective of the fishery than the 
     fishway initially prescribed by the Secretary; and.
       ``(B) will either--
       ``(i) cost less to implement, or
       ``(ii) result in improved operation of the project works 
     for electricity production as compared to the fishway 
     initially prescribed by the Secretary.
       ``(3) The Secretary shall submit into the public record of 
     the Commission proceeding with any prescription under 
     subsection (a) or alternative prescription it accepts under 
     this subsection a written statement explaining the basis for 
     such prescription, and reason for not accepting any 
     alternative prescription under this subsection, including the 
     effects of the prescription accepted or alternative not 
     accepted on energy supply, distribution, cost, and use, air 
     quality, flood control, navigation, and drinking, irrigation, 
     and recreation water supply, based on such information as may 
     be available to the Secretary, including information 
     voluntarily provided in a timely manner by the applicant and 
     others.
       ``(4) Nothing in this subsection shall prohibit other 
     interested parties from proposing alternative prescriptions. 
     ''


                Amendment No. 3316 To Amendment No. 3140

  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from New Mexico [Mr. Bingaman] proposes an 
     amendment numbered 3316 to amendment No. 3140.

  Mr. BINGAMAN. 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:

       In lieu of the matter proposed to be inserted, insert the 
     following:

                    TITLE III--HYDROELECTRIC ENERGY

     SEC. 301. ALTERNATIVE MANDATORY CONDITIONS.

       (a) Review of Alternative Mandatory Conditions.--The 
     Federal Energy Regulatory Commission, the Secretary of the 
     Interior, the Secretary of Commerce, and the Secretary of 
     Agriculture, in consultation with the affected states and 
     tribes, shall undertake a review of: (1) options for a 
     process whereby license applicants and third parties to a 
     relicensing proceeding being undertaken pursuant to Part I of 
     the Federal Power Act could propose alternative mandatory 
     conditions and alternative mandatory fishway prescriptions to 
     be included in the license in lieu of conditions and 
     prescriptions initially deemed necessary or required pursuant 
     to section 4(e) and section 18, respectively, of the Federal 
     Power Act; (2) the standards which should be applicable in 
     evaluating and accepting such conditions and prescriptions; 
     (3) the nature of participation of parties other than the 
     license applicants in such a process; (4) the advantages and 
     disadvantages of providing for such a process, including the 
     impact of such a process on the length of time needed to 
     complete the relicensing proceedings and the potential 
     economic and operational improvement benefits of providing 
     for such a process; and (5) the level of interest among 
     parties to relicensing proceedings in proposing such 
     alternative

[[Page 5590]]

     conditions and prescriptions and participating in such a 
     process.
       (b) Report.--Within twelve months after the date of 
     enactment of this Act, the Federal Energy Regulatory 
     Commission and the Secretaries of the Interior, Commerce, and 
     Agriculture, shall jointly submit a report to the Committee 
     on Energy and Natural Resources of the Senate and the 
     appropriate committees of the House of Representatives 
     addressing the issues specified in subsection (a) of this 
     section. The report shall contain any legislative or 
     administrative recommendations relating to implementation of 
     the process described in subsection (a).

     SEC. 302. STREAMLINING HYDROELECTRIC RELICENSING PROCEDURES.

       (a) Review of Licensing Process.--The Federal Energy 
     Regulatory Commission, the Secretary of the Interior, the 
     Secretary of Commerce, and the Secretary of Agriculture, in 
     consultation with the affected states and tribes, shall 
     undertake a review of the process for issuance of a license 
     under Part I of the Federal Power Act in order to: (1) 
     improve coordination of their respective responsibilities; 
     (2) coordinate the schedule for all major actions by the 
     applicant, the Commission, affected Federal and State 
     agencies, Indian Tribes, and other affected parties; (3) 
     ensure resolution at an early stage of the process of the 
     scope and type of reasonable and necessary information, 
     studies, data, and analysis to be provided by the license 
     applicant; (4) facilitate coordination between the Commission 
     and the resource agencies of analysis under the National 
     Environmental Policy Act; and (5) provide for streamlined 
     procedures.
       (b) Report.--Within twelve months after the date of 
     enactment of this Act, the Federal Energy Regulatory 
     Commission and the Secretaries of the Interior, Commerce, and 
     Agriculture, shall jointly submit a report to the Committee 
     on Energy and Natural Resources of the Senate and the 
     appropriate committees of the House of Representatives 
     addressing the issues specified in subsection (a) of this 
     section and reviewing the responsibilities and procedures of 
     each agency involved in the licensing process. The report 
     shall contain any legislative or administrative 
     recommendations relating to improve coordination and 
     streamline procedures for the issuance of licenses under Part 
     I of the Federal Power Act. The Commission and each Secretary 
     shall set forth a plan and schedule to implement any 
     administrative recommendations contained in the report, which 
     shall also be contained in the report.

  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Madam President, was the amendment offered by the Senator 
from New Mexico in the spirit of a second degree to the Nelson 
amendment?
  The PRESIDING OFFICER. The amendment is drafted as a substitute for 
the first-degree amendment.
  Mr. CRAIG. I thank the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. Madam President, this issue, of course, relates to 
hydroelectric power. This is a subject on which we have been working 
for several months with interested Members, with the Senator from 
Idaho, the Senator from Oregon, the Senator from Nebraska, and their 
staffs, in an effort to achieve consensus on a very difficult issue. I 
very much thank them for all the work they have put into this effort 
and their efforts to come to agreement as to how we should proceed. 
Unfortunately, we have not been able to resolve the issues.
  I know hydropower plays a very significant role in providing needed 
energy to the entire Nation and particularly to the Northwest. It is a 
very important energy source in other parts of the country as well, 
particularly New England.
  There are now five first-degree amendments and three second-degree 
amendments that have been filed to this bill with regard to the topic 
of hydroelectric relicensing. So the proliferation of amendments 
reflects the fact that, in spite of a lot of good work that has been 
done, there is no consensus about how to proceed. Unfortunately, I 
cannot support the amendment the Senators from Nebraska and Idaho are 
offering today. In my view, it does not reflect a consensus.
  At this juncture, given the procedural posture of the bill, I believe 
the best course is to adopt the amendment I have offered which provides 
that there be a review undertaken by the relevant agencies with respect 
to two aspects of the hydroelectric relicensing process. Let me recount 
what those are.
  First, whether provisions for alternative mandatory conditions such 
as those included in the Nelson-Craig amendment would work to improve 
the process and, secondly, methods that should be adopted to streamline 
the process.
  The hydroelectric relicensing process has come under criticism. Much 
of that criticism is justified due to its complexity and the length of 
time it takes to issue a renewal license. These delays are not good for 
government, and they are of great concern to my colleagues and to me as 
well.
  There are interagency efforts in place to try to improve that 
process. We need to encourage those efforts. We need to try to let 
those efforts play out.
  My amendment would do this by requiring all the involved agencies--
that includes the Secretary of the Interior, Federal Energy Regulatory 
Commission, the Secretary of Commerce, Secretary of Agriculture--to 
report on whether the alternative would require all the agencies to 
work together to make recommendations to the Congress on how we can 
improve the process.
  The second thing the amendment does is require the agencies to report 
on whether the alternative mandatory conditioning authority provisions 
included in the underlying amendment would work. My amendment would 
require recommendations as to what standard should apply with respect 
to alternative mandatory conditions and the nature of participation of 
interested parties.
  In addition, the amendment I have offered would require an assessment 
of whether this new authority would delay an already complex and slow 
process, which is a very real concern I have.
  The Nelson-Craig amendment would adopt alternative mandatory 
conditioning authority while doing nothing to streamline the process. I 
am concerned that the amendment, rather than improving the process, 
will inadvertently add complexity and delay to an already overly 
complex and slow relicensing process.
  I am also concerned that the Craig amendment undermines protections 
for Federal lands and resources provided for in the Federal Power Act. 
Under that act, mandatory conditions and prescriptions are developed by 
the Federal land management or resource agency for inclusion in the 
license to protect wildlife refuges, national parks, other Federal 
lands, and Indian reservations. This conditioning authority and these 
standards have been in place for over 80 years.
  The Senate energy bill provides new flexibility relating to this 
conditioning authority by including alternative mandatory conditioning 
authority. But the bill does this in a way that we believe is 
environmentally protective in an appropriate way.
  The amendment by the Senators from Nebraska and Idaho would change 
this alternative mandatory conditioning authority to make it less 
protective of Federal lands and resources by modifying the standard for 
alternative mandatory conditions from that included in the bill.
  Finally, the Craig amendment would give greater weight to the views 
of the license applicants over the views of States and tribes and the 
public. This is another change we believe is inappropriate and causes 
me to propose the amendment I have called up for consideration.
  I acknowledge these are difficult issues. Consensus has been 
difficult to achieve. Rather than proceeding with either the Craig 
amendment or the language in the Senate bill, the one before the Senate 
now, I believe the sound approach is to learn more about the 
implications of these provisions and seek expert input from the 
agencies involved, and that is what the amendment I have called up 
would do.
  I urge my colleagues to support the amendment I offer as an 
alternative to the Nelson-Craig amendment.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. NELSON of Nebraska. Madam President, I commend my colleague from 
New Mexico for his very able work on bringing forth an energy bill. It 
is with some sadness I find myself opposing his substitute amendment.
  The substitute amendment is essentially requesting a study in an area

[[Page 5591]]

where we already know the results. I support studies when we don't know 
what the study will tell us and we don't know the results and we need 
to find out what the situation is. But in this case, we know what the 
situation is.
  We have a system that suffers from dispersed decisionmaking authority 
and an inability to balance competing values and a system that is 
certainly jeopardizing the relicensing of many of our hydropower 
facilities across the Nation.
  Nearly every State will have one or more and as much as 99.9 percent 
of its hydroelectric power facilities come up for the licensing review 
within the next 15 years. If they have the experience I have had in 
Nebraska, they won't have to have a study. They can simply look to see 
what has happened in Nebraska to tell them what the future holds for 
them.
  The future of Nebraska is dimmed because of the past experience we 
have had with the relicensing process.
  We spent $40 million for one hydroelectric powerplant in 14 years to 
realize this project--a project built in the 1930s. That experience can 
tell you that the system is lengthy, expensive, and it doesn't require 
any of that $40 million that was spent to go into the environment, 
habitat, wildlife retainment, or anything of that sort. It was money 
spent on application fees, filing of papers, lawyer's fees--$40 million 
to realize this one project in the State of Nebraska, taking 14 years.
  That was when we had both Senators from Nebraska, the congressional 
Representatives, and I, as Governor, supporting the effort to get it 
done in an expeditious fashion. That is expedition in reverse.
  The truth is, this system is not expedited; it is expensive, costly, 
and slow. We even had in our situation, nearly at the end of the 
process, after we had gone through the process with as many alphabet 
agencies in the Federal Government that I thought we would ever find, 
another agency that came in and said: All the work you have done is for 
naught, and we have a requirement we would like to impose at the tail 
end of the process.
  They could have done it at the beginning of the process. This will 
help alleviate and obviate that need. In the State of Washington alone, 
you are going to be facing the relicensing of 80 percent of your 
hydroelectric power in the next 15 years--21 projects. If you multiply 
that times $40 million, you can see what the cost really is. Multiply 
that times the number of staff years, in terms of what it is going to 
take, and you will see what the internal cost truly is to your power 
authorities.
  I would ordinarily support a study. But in this case, we don't need 
one. We have had the study, and the study is experience which tells us 
that we need to make this kind of correction, and we need to make it 
now, not wait until the study tells us what we already know.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon is recognized.
  Mr. SMITH of Oregon. Madam President, I rise in opposition to the 
second-degree amendment being offered by Senator Bingaman. Truly, 
another study of this issue will do nothing more than run out the clock 
on license holders who must get 53 percent of the nonfederal hydropower 
capacity in this Nation relicensed within the next 15 years.
  To give you an example of just how grave a situation this is, there 
are 307 projects under the category, including 49 projects in 
California, 21 projects in Washington, 23 projects in Wisconsin, 30 
projects in New York, 23 projects in Maine, 14 projects in Oregon, and 
14 projects in Michigan. This amounts to over 29,000 megawatts of 
capacity. To put this into context, it takes 1,000 megawatts daily to 
run the City of Seattle. So when you figure that 29,000 megawatts are 
at stake, and you figure what it takes to run Seattle, you can imagine 
how much economic difficulty will ensue if we do not figure out a more 
reasonable way to bring on hydropower relicensing.
  There have been extensive hearings already during the last two 
Congresses, in the Senate Energy Committee, on the need for hydro 
relicensing reform. I have attended them all, and there has been a 
committee that was chartered under the Federal Advisory Committee Act. 
That committee has concluded that legislative reforms are absolutely 
critical if we are to make progress and meet the deadlines that are 
looming over the energy capacity of this country.
  There have been administrative attempts to reform the process 
already. Having the same agencies that have, so far, been able to 
institute meaningful reforms further study this issue will provide us 
with no benefit at all. I urge my colleagues from all parts of this 
country, who have hydroelectric power, to please support the Nelson 
amendment. It provides modest reforms of a narrow portion of the 
relicensing process.
  The time for study is done. The time to ensure that hydropower 
remains an important part of our electricity mix is now. Madam 
President, no one knows better than you and I, from the Pacific 
Northwest, how critical an issue this is for our neck of the woods. I 
also say that, while all energy production has an environmental 
tradeoff, truly, hydropower puts out no global warming and provides our 
people with the most renewable, inexpensive, and reliable sources of 
electricity there are, frankly, on the Earth.
  I believe if we are serious about reemploying our people, getting our 
economy moving, we have to be serious about hydro relicensing reform.
  Madam President, I know a number of environmental groups have opposed 
the Nelson amendment. I want to also say we have, for those who are 
concerned about the environmental issue, as we all are, that there is a 
second degree that I will be offering that does enjoy the support of 
many environmental groups, such as Trout Unlimited. I quote their news 
release today:

       Senator Smith's amendment improves the Craig-Nelson 
     amendment by reducing the loss in fishery protection from SA 
     3140. While we support Senator Smith's amendment, we still 
     urge opposing an amended SA 3140.

  The point I am trying to make is we have improved the underlying 
amendment, and we have given the environmental community something that 
will significantly help them in their advocacy. To demonstrate what we 
are trying to do with the second degree, should the Bingaman study be 
defeated, this amendment does two important things. While it 
substantially, like Senator Nelson's, makes the changes I think provide 
value to all of the stakeholders who follow the relicensing process, 
the first would substitute the words ``fish resources'' for ``fishery'' 
in the underlying text. We want to make it clear that we are trying to 
protect all fish resources, not just those fish species that are 
harvested either commercially already or with sport fishery.
  Secondly, the amendment would begin this process in 2008. It would 
require license applicants to file their applications for a new license 
with the Federal Energy Regulatory Commission 3 years before the 
current license has expired. During the hearings before the Energy 
Committee, it was clear to me that there was frustration with the 
current statutory requirement to file only 2 years before the 
expiration of the current licenses. In most instances, this is 
insufficient time for FERC to review the adequacy of the application 
and to determine any additional studies that might be needed. The 
result is a string of annual licenses which do not provide certainty 
for consumers or the utility and results in delays in environmental 
mitigation and enhancement.
  Licensed applicants are reluctant to spend such funds until they know 
what will, in fact, be required of them under any new license. So I say 
to those who care about the environment, the Nelson-Craig amendment 
will be improved with the second degree that will follow. Truly, what 
we need, last of all, is another study on a problem that we know only 
too well through experience.
  If you want a study, the study is Senator Nelson, who was Governor 
Nelson. His experience is all the study we need that we have a broken 
system and we need to repair it. I remind my colleagues that none of us 
has a job in any

[[Page 5592]]

industry unless electricity is produced first. Hydropower is crucial in 
the mix of America's energy. It is absolutely the backbone of the 
Pacific Northwest. This is needed, and then we have a way to protect 
the environment and a way to improve this process.
  I yield the floor.
  Ms. CANTWELL. Mr. President, over the last 6 weeks, while we have 
debated essential elements of the energy bill, from ANWR and CAFE to 
electricity deregulation and ethanol, I have joined the sponsors of 
this amendment, the chairman and ranking member of the Energy Committee 
and others in trying to forge a consensus on how best to reform the 
hydroelectric relicensing process.
  Let me state at the outset, that I share the sponsor's deep sense of 
frustration and concern with how the existing hydro relicensing process 
works for all participants.
  With more than 9,300 megawatts of nonfederal hydropower capacity, 
Washington State is the single most hydro dependent State in the 
Nation. The power of the great rivers of the Pacific Northwest has 
contributed to our economy, created industries and even helped to win 
the Second World War. There is no area of the country where hydropower 
generation has greater importance.
  At the same time, Washington State also relies on the natural 
abundance of these spectacular rivers. Washington's rivers provide 
year-round recreation opportunities, including fishing and boating, 
these features contribute enormously to our economy as well as our 
environment. Our rivers are also home to salmon and steelhead runs, the 
cultural soul of the Pacific Northwest.
  The rivers serve as an important economic and cultural resource to 
several Northwest Indian tribes that entered into treaties with the 
U.S. based on the promise to protect and honor their rights and 
resources.
  Our reliance on hydropower and on the recreational and environmental 
benefits of our rivers requires us to employ a balanced approach to 
their use. Utility operators have shared with me horror stories about 
how the rising costs, loss of operational flexibility, and lost 
generation due to new operating constraints imposed during relicensing 
are impacting their ability to bring power to Washington's consumers. 
At the same time, 12 runs of Washington State salmon are now included 
on the endangered species list.
  We can and must find the right balance to ensure continued survival 
of these species while maintaining hydropower production.
  Many hydropower projects, including some in the Northwest, were built 
without adequate consideration of impacts on the environment. Most were 
built prior to the enactment of essential environmental laws like the 
Clean Water Act and Endangered Species Act. Relicensing offers a unique 
opportunity to reassess the licenses of these hydropower dams, bring 
them up to modern standards, and ensure the long-term health of our 
rivers.
  The current process for licensing hydropower projects has had mixed 
results. On the one hand, we have examples of great successes. The 
Cowlitz was once home to some of the most bountiful salmon and 
steelhead runs in the Pacific Northwest. In August 2000, a landmark 
relicensing settlement was signed that will open up more than 200 miles 
of renewed habitat. The settlement is supported by Federal and State 
agencies, conservation groups, and the hydro utility. On the other 
hand, the Cushman project has been operating under annual licenses due 
to disputes over appropriate environmental measures. While Tacoma Power 
has continued operating the project for over 20 years, there remain a 
number of serious environmental challenges.
  And on all sides we have parties pointing the finger at one another 
claiming that the other is always to blame. I do not believe that any 
of the parties to relicensing, Federal resources agencies, FERC, 
tribes, States, the industry or advocacy groups, are to blame for 
problems in relicensing. In fact, I believe most parties are good 
actors caught up in an outdated, bureaucratic process desperately in 
need of reform.
  There is no question that the existing licensing process can be 
improved. We can make it faster and cheaper without sacrificing 
environmental quality. Quicker licensing would improve the efficiency 
of these projects and improve the environment. This is a goal that I 
would strongly support, if we were debating such measures today.
  Unfortunately, that is not what the amendment before us today 
accomplishes. Instead, the amendment creates a new appeals process, 
another step, to this flawed process without requiring FERC and the 
resource agencies to address the fundamental problems contributing to 
the delays and skyrocketing costs.
  I agree with the supporters of this amendment that one part of the 
solution is to allow participants to propose creative solutions in 
balancing energy and environmental priorities. While I can't fully 
agree with the approach taken in this amendment, I do agree that 
parties should be rewarded for coming together and proposing innovative 
new solutions. But more importantly, there will be no real improvement 
until Congress requires or FERC and the resource agencies agree to 
significant structural reform. This amendment falls far short.
  Section 306 of the underlying bill provides an opportunity to 
streamline the licensing process by requiring agencies to work together 
with FERC in a more cooperative manner. It also requires the 
coordination of environmental reviews and places a number of 
requirements on FERC to maintain a better, more transparent schedule 
for relicensing proceedings.
  But the amendment before us today deletes section 306, the only hope 
for real fundamental reform of an obviously flawed process.
  It is important for the people of Washington State to get this right, 
and soon. We will have to relicense 19 hydropower projects over the 
next several years. The resulting licenses will set the terms for hydro 
projects to operate on our rivers for another 30 years. We need a 
process that will issue licenses promptly, with full environmental 
protection, bringing these projects into compliance with modern laws. 
It is disappointing that this amendment will not do the job.
  I reluctantly oppose the Craig amendment because I believe we are 
missing an opportunity to accomplish real reform. But regardless where 
the votes are on this amendment, this is not the end of the discussion 
about hydropower licensing reform, but rather a beginning. I look 
forward to working with my colleagues in the Senate and those in 
industry, the environmental community, tribes, States, and other 
interests in order to maintain the tremendous hydropower assets of our 
State while protecting and restoring our environmental future.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. NELSON of Nebraska. Madam President, I want to say that a study 
should ordinarily tell us something we don't know, bring us to 
conclusions that we have not yet reached, or provide facts that are not 
otherwise evidence.
  But there are no facts that are absent here. There are no conclusions 
that we cannot draw on the basis of what we know, and there certainly 
isn't an experience yet to be determined. So a study is unnecessary. It 
is very clear, though, action is necessary.
  Respectfully, I move to table the substitute second-degree amendment 
offered by the Senator from New Mexico.
  The PRESIDING OFFICER. The question is on agreeing to the motion.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Madam President, I thought the Senator from Nebraska asked 
for the yeas and nays.
  The PRESIDING OFFICER. The motion to table has been made.
  Mr. NELSON of Nebraska. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The Chair reminds Senators that the motion to table is not debatable. 
It will

[[Page 5593]]

take unanimous consent at this time for further debate.
  The question is on agreeing to the motion to table amendment No. 
3316. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle) 
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) is necessarily absent.
  The PRESIDING OFFICER (Mr. Cleland). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 54, nays 43, as follows:

                      [Rollcall Vote No. 81 Leg.]

                                YEAS--54

     Allard
     Allen
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Carper
     Cleland
     Cochran
     Collins
     Conrad
     Craig
     Crapo
     DeWine
     Dodd
     Domenici
     Ensign
     Enzi
     Fitzgerald
     Frist
     Gramm
     Grassley
     Hagel
     Hatch
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Landrieu
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                                NAYS--43

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Carnahan
     Chafee
     Clinton
     Corzine
     Dayton
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Gregg
     Harkin
     Inouye
     Jeffords
     Kennedy
     Kerry
     Kohl
     Leahy
     Levin
     Lieberman
     Mikulski
     Murray
     Nelson (FL)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Specter
     Stabenow
     Torricelli
     Wellstone
     Wyden

                             NOT VOTING--3

     Daschle
     Helms
     Johnson
  The motion was agreed to.
  Mr. CRAIG. Mr. President, I move to reconsider the vote.
  Mr. REID. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                            Order For Recess

  Mr. REID. Mr. President, for the information of all Members, I have 
checked with the minority, and I ask unanimous consent that between the 
hours of 3 and 4 o'clock this afternoon, the Senate be in recess to 
listen to Secretary Powell in S-407. I ask that that time count against 
the postcloture hours under this measure now before the Senate.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 3306 To Amendment No. 3140

  Mr. SMITH of Oregon. Mr. President, I call up amendment No. 3306, the 
Smith second-degree amendment to the Nelson of Nebraska amendment No. 
3140, and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The senior assistant bill clerk read as follows:

       The Senator from Oregon [Mr. Smith] proposes an amendment 
     numbered 3306 to amendment No. 3140.

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

        (Purpose: To clarify the definition of renewable energy)

       Strike Title III and insert the following:

     ``SEC. 301. ALTERNATIVE CONDITIONS AND FISHWAYS.

       ``(a) Alternative Mandatory Conditions.--Section 4 of the 
     Federal Power Act (16 U.S.C. 797) is amended by adding at the 
     end the following:
       `(h)(1) Whenever any person applied for a license for any 
     project works within any reservation of the United States 
     under subsection (e), and the Secretary of the department 
     under whose supervision such reservation falls (in this 
     subsection referred to as the `Secretary') shall deem a 
     condition to such license to be necessary under the first 
     proviso of such section, the license applicant may propose an 
     alternative condition.
       `(2) Notwithstanding the first proviso of subsection (e), 
     the Secretary of the department under whose supervision the 
     reservation falls shall accept the proposed alternative 
     condition referred to in paragraph (1), and the Commission 
     shall include in the license such alternative condition, if 
     the Secretary of the appropriate department determines, based 
     on substantial evidence provided by the license applicant, 
     that the alternative condition--
       `(A) provides for the adequate protection and utilization 
     of the reservation; and
       `(B) will either--
       `(i) cost less to implement, or
       `(ii) result in improved operation of the project works for 
     electricity production as compared to the condition initially 
     deemed necessary by the Secretary.
       `(3) The Secretary shall submit into the public record of 
     the Commission proceeding with any condition under subsection 
     (e) or alternative condition it accepts under this subsection 
     a written statement explaining the basis for such condition, 
     and reason for not accepting any alternative condition under 
     this subsection, including the effects of the condition 
     accepted and alternatives not accepted on energy supply, 
     distribution, cost, and use, air quality, flood control, 
     navigation, and drinking, irrigation, and recreation water 
     supply, based on such information as may be available to the 
     Secretary, including information voluntarily provided in a 
     timely manner by the applicant and others.
       `(4) Nothing in this subsection shall prohibit other 
     interested parties from proposing alternative conditions.'
       ``(b) Alternative Fishways.--Section 18 of the Federal 
     Power Act (16 U.S.C. 811) is amended by--
       ``(1) inserting ``(a)'' before the first sentence; and
       ``(2) adding at the end the following:
       `(b)(1) Whenever the Secretary of the Interior or the 
     Secretary of Commerce prescribes a fishway under this 
     section, the license applicant or the licensee may propose an 
     alternative to such prescription to construct, maintain, or 
     operate a fishway.
       `(2) Notwithstanding subsection (a), the Secretary of the 
     Interior or the Secretary of Commerce, as appropriate, shall 
     accept and prescribe, and the Commission shall require, the 
     proposed alternative referred to in paragraph (1), if the 
     Secretary of the appropriate department determines, based on 
     substantial evidence provided by the licensee, that the 
     alternative--
       `(A) will be no less protective of the fish resources than 
     the fishway initially prescribed by the Secretary; and
       `(B) will either--
       `(i) cost less to implement, or
       `(ii) result in improved operation of the project works for 
     electricity production as compared to the fishway initially 
     prescribed by the Secretary.
       `(3) The Secretary shall submit into the public record of 
     the Commission proceeding with any prescription under 
     subsection (a) or alternative prescription it accepts under 
     this subsection a written statement explaining the basis for 
     such prescription, and reason for not accepting any 
     alternative prescription under this subsection, including the 
     effects of the prescription accepted or alternative not 
     accepted on energy supply, distribution, cost, and use, air 
     quality, flood control, navigation, and drinking, irrigation, 
     and recreation water supply, based on such information as may 
     be available to the Secretary, including information 
     voluntarily provided in a timely manner by the applicant and 
     others.
       `(4) Nothing in this subsection shall prohibit other 
     interested parties from proposing alternative 
     prescriptions.'''
       ``(c) Time of Filing Application.--Section 15(c)(1) of the 
     Federal Power Act (16 U.S.C. 808(c)(1)) is amended by 
     striking the first sentence and inserting the following:
       `(1) Each application for a new license pursuant to this 
     section shall be filed with the Commission--
       `(A) at least 24 months before the expiration of the term 
     of the existing license in the case of licenses that expire 
     prior to 2008; and
       `(B) at least 36 months before the expiration of the term 
     of the existing license in the case of licenses that expire 
     in 2008 or any year thereafter.'''

  Mr. SMITH of Oregon. Mr. President, I yield my time for commentary to 
the Senator from Idaho.
  The PRESIDING OFFICER. The Senator has no such right. The Senator 
from Idaho can seek recognition at any time.
  Mr. CRAIG addressed the Chair.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, we just took a very critical and, I 
believe, important vote in the Senate pertaining to the Nelson-Craig 
amendment, and now second-degreed by the Senator from Oregon. While I 
know the Senator from New Mexico and I have worked long and hard on the 
issue of hydro relicensing, I think the will of the Senate has spoken 
as it relates to moving this issue to the forefront and making a 
legislative determination on what the public policy ought to be as it 
relates to the relicensing of hydro facilities around this country.

[[Page 5594]]

  We have now for well over a decade and a half spent a great deal of 
time looking at the hydro relicensing process. Many of the licensees 
have spent millions and millions of dollars trying to shape it and 
determine it. Study after study--and here are about 7 of them, some 
1,400 pages of studies over the last decade--have said there is a 
problem that can only be determined by a legislative fix. That is 
exactly what the Nelson-Craig amendment, now second-degreed by the 
Senator from Oregon, does. It maintains the amendment, and the second 
degree maintains the current standard in section 4(e).
  The Secretary of the Interior can determine whether an alternative 
condition offered by the licensee ensures the adequate protection and 
utilization of the ``Federal reservation.''
  ``Federal reservation'' is a term of art in the Federal licensing of 
projects as it relates to protecting the resources, protecting the 
land.
  The reason this amendment is important is when we go to conference 
with this bill, the House has said something very different. The House 
said, in their version of the hydroelectric relicense reform, that they 
would change the standard in 4(e), requiring the Secretary of the 
Interior to ensure an alternative condition provides no less protection 
for the reservation than provided by the conditions deemed initially 
necessary by a midlevel staff person at the Interior. That is a higher 
threshold than is currently required under licensing.
  What is so important is that we take the right language to the 
conference to make sure if we advance or change the relicensing 
projects of hydro--and the Senator from Nebraska has spoken eloquently 
about the problems of Nebraska, the Senator from Oregon has talked 
about the multitude of projects to be relicensed over the next decade; 
we know that hydro is about 19 to 20 percent of the electrical base of 
this country--while we want to modernize these facilities, bring them 
into compliance under better environmental standards, what we cannot 
have is a multi-multimillion-dollar process that doesn't get us 
anywhere and, in the end, actually reduces the ability of these 
facilities to produce power.
  The Senator from Nebraska spoke of a process in his State that cost 
$40 million to relicense a hydro project. My guess is that the project, 
when it was initially built some 30 years prior, cost a fourth of that 
amount--$8 million, $10 million. And now just to relicense it, just to 
go through the legal hoops and hurdles and timelines involved it costs 
$40 million? That doesn't talk about the retrofits. That doesn't talk 
about new concrete poured or concrete taken away or fish ladders or 
rescheduling and reprogramming the flows of waters to accommodate fish 
and habitat downstream. None of that was spoken to--nor the loss of 
generating capacity. Just the process costs that amount of money.
  That is why these studies have shown, time and time again, this is a 
problem that has to get fixed legislatively. Yes, we have had working 
groups inside the departments of our Federal Government over the last 
number of years.
  When I first began to examine the hydro relicensing problem 5 years 
ago, to the Clinton administration's credit, they began to get all 
their agencies together to try to streamline the process. That is in 
the eye of the beholder, and they did work. But there was nothing in 
the law that required it. What we were hoping to do is to do that.
  What we have done instead as an alternative is provide, when the 
licensee comes up with an approach, and a stakeholder comes up with an 
different approach, that the licensee can say: We can arrive at the 
standards and meet the needs of the stakeholder for less money in a 
different approach, and the Secretary of the Interior, in this 
instance, can arbitrate that and make those determinations they can now 
not make.
  It ensures a balance and accountability to Federal resource agencies 
that I think is critically important. Isn't it fascinating that a third 
level bureaucrat can make a demand that even the Secretary cannot act 
on, that may cost millions and millions of dollars? It may even take 
down a hydro facility because it can no longer operate in an 
economically effective way and the licensee would simply walk away and 
the facility would come down and it would be no longer productive 
because someone downline in an agency determined they needed something 
that could not in any way be arbitrated, that could not in any way be 
accommodated by different approaches, or an alternative review.
  That is what we offer in the Nelson amendment. That is why it is 
critical. The Smith amendment, then, gives a little flexibility in time 
that we think is important. Trout Unlimited has said it is important.
  We are certainly willing to accommodate this. This in no way is an 
anti-environmental vote. The process itself is still intact. All of the 
players get to the table. All of the players' viewpoints are heard.
  We said, when the licensee comes forward and says I can meet those 
new standards for less money in a different way, that is a 
consideration which becomes part of the process that does not now 
exist. We think that is right. We think it is reasonable. That is the 
way government ought to work.
  If we lose our hydro base in this country--and we could--how do we 
replace it? Coal-fired plants? A new nuclear plant? It can never be 
made up by wind and solar because it can never produce that amount of 
power. It would have to be replaced. It is replaced, at least in 
volume, by the current alternatives I have mentioned. In most 
instances, and in most States, those alternatives today are somewhat 
unacceptable.
  That is why it is so critically important that the Nelson-Craig-Smith 
amendment move forward as a part of this energy bill and into the 
conference where we can work out our differences and hopefully resolve 
a problem that has plagued this process now since it was created nearly 
two decades ago.
  I thank my colleagues and yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The pending question is the Smith of Oregon 
substitute to the Nelson first-degree amendment.
  Mr. BINGAMAN. Mr. President, I do not object to going a ahead with 
the vote. I don't believe a rollcall is required at this point.
  The PRESIDING OFFICER. If there is no further debate, the question is 
on agreeing to the substitute.
  The amendment (No. 3306) was agreed to.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, that vote was on the Nelson-Craig amendment 
in the second degree by the Senator from Oregon?
  The PRESIDING OFFICER. The Nelson-Craig amendment is now pending, as 
amended.
  Is there further debate on that amendment? If not, the question is on 
agreeing to the amendment.
  The amendment (No. 3140), as amended, is agreed to.
  Mr. BINGAMAN. Mr. President, I move to reconsider the vote.
  Mr. SMITH of Oregon. 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 Nevada.
  Mr. REID. Mr. President, I ask unanimous consent that the leader time 
which I am going to take be counted against the 30 hours on this bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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