[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Senate]
[Pages 20017-20051]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  ENERGY POLICY ACT OF 2003--Continued

  Mr. CRAIG. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. FEINGOLD. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FEINGOLD. Mr. President, I ask unanimous consent to speak as if 
in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Wisconsin is recognized.
  Mr. FEINGOLD. I thank the Chair.
  (The remarks of Mr. Feingold pertaining to the introduction of S. 
1480 are located in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  Mr. FEINGOLD. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant 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quorum call be rescinded.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. Without objection, it is so ordered.
  Mr. REID. Mr. President, there is an order floating around here on 
the floor that sets forth about 7 hours of debate on these two trade 
agreements, the Singapore and Chilean trade agreements. Is that true?
  The PRESIDING OFFICER. The order has been obtained.
  Mr. REID. It has been obtained?
  The PRESIDING OFFICER. That is correct.
  Mr. REID. It is my understanding the Senator from California, Senator 
Feinstein, has an hour under that agreement. Is that true?
  The PRESIDING OFFICER. That is correct.
  Mr. REID. I ask unanimous consent that Senator Feinstein be allowed 
to use her hour on the trade agreements at this time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from California.


           The Chilean and Singaporean Free Trade Agreements

  Mrs. FEINSTEIN. Mr. President, I thank the Senator from Nevada for 
the courtesy of allowing me to move ahead with some additional remarks 
on the Chilean and Singaporean free-trade agreements and on the 
immigration policy that is attached to those agreements. I have 
expressed my deep concern about the temporary entry provisions of the 
free-trade agreements on which we are about to vote. I was prepared to 
support the trade agreements. However, I believe the USTR has made a 
terrible mistake in negotiating immigration provisions in these trade 
agreements, and, thus, delving into areas of authority that should have 
been left to the Congress.
  I spoke to this to some extent on Friday, and I would like to speak 
again today because I think this is like peeling an onion. The more you 
look at it, if you look at immigration law, the more you see the major 
loophole this agreement is creating.
  This agreement would create new categories for nonimmigrant visas for 
free-trade professionals. It would permit the admission, on its face, 
of up to 5,400 professionals from Singapore and up to 1,400 from Chile 
each year. That is on its face.
  It would require the entry for their spouses and children, so they 
could join foreign workers in the United States. That, of course, makes 
it less of a temporary visa program. Those visas can be extended 
indefinitely. They can be renewed year after year after year ad 
infinitum. The bill would require without a numerical limit the entry 
of business persons under categories that parallel three other current 
visa categories: The B-1 visitor visa, the E-1 trader or investor visa, 
and the L-1 intercompany transfer visa.
  In fiscal year 2002, the State Department issued more than a total of 
5,232,492 visas to foreign nationals under the current temporary visa 
category that parallels those in the free-trade agreement--5.2 million 
individuals from foreign countries who come here each year and replace 
American workers in various pursuits.
  How many more do we need? This legislation requires the entry of 
foreign workers in a new way on L-1 visas regardless of whether they 
are nationals of Singapore or Chile.
  I don't think most Members realize that. You can get an L-1 visa now 
under this trade agreement just if you have been employed by a Chilean 
or Singaporian country. You don't have to be a citizen of that country. 
This is

[[Page 20018]]

particularly egregious, and I will explain why a little later.
  The bill would permit but not require the United States to deny the 
entry of a free-trade professional if his or her entry would adversely 
affect the settlement of a labor dispute. It would require the United 
States to submit the dispute about whether it should grant certain 
individuals entry to an international tribunal. An international 
tribunal for the first time that I can recall would determine now under 
this treaty a sovereign right which belongs to the United States of 
America.
  In enacting the Trade Promotion Act, the Congress did not provide the 
USTR authority to negotiate new visa categories or immigration programs 
or to impose new requirements on the existing temporary entry system. 
In fact, the USTR has taken that upon itself.
  In negotiating these agreements, the USTR has negotiated a perpetual 
visa category that we as Members will not be able to modify no matter 
what the circumstances or the economic consequences may be. Employers 
can renew these new employee visas each and every year under the 
agreement with no limit while also bringing in every year an additional 
crop of new entrants to fill up the annual numerical limits for new 
visas.
  This makes it possible for foreign employees entering the country on 
a supposedly temporary basis at the age of 22 to remain until he or she 
is ready to retire at the age of 70.
  That is not what temporary visas aim to do.
  In effect, by voting for these provisions we are adding to the U.S. 
labor market a continuous supply of 6,800 guest workers a year in 
addition to the more than 40,000 from Chile and the 30,000 from 
Singapore who came in last year under the existing temporary work 
categories.
  In other words, this is in addition to the 50,000 workers who have 
already come in from these two countries. I don't believe Members 
realize that.
  These workers come in without taking into account the potential 
impact on U.S. workers.
  By voting on this agreement, we as Members of Congress are 
effectively ceding our authority to limit the duration of these visas 
when it is in the national interest to do so because we can't change a 
thing. We can't change a comma. We can't dot an ``i''. We can't cross a 
``t''. That is fast track.
  Another problematic provision--and we should be very concerned about 
this--is that the unlimited L-1 visa category included in the Chile and 
Singapore agreement does not require that these workers be citizens of 
either Chile or Singapore. They can be from anywhere as long as they 
are working for a company right now located either in Chile or 
Singapore.
  This means under the agreement, a Chinese or Indian or any other 
country's multinational corporation with offices in Singapore, for 
example, can transfer an unlimited number of Chinese or Indian 
employees to the United States.
  What happens if the corporation also has offices in countries hostile 
to the United States or are state sponsors of terrorism?
  Under these agreements, the corporation may send an unlimited number 
of such nationals to the United States under the E-1 trader visa and 
the L-1 intercompany transferee visa category.
  In other words, these trade agreements create a major loophole 
through which thousands of foreign workers can come into the country 
with little scrutiny.
  I don't believe there is anybody virtually in this Senate who 
understands that.
  This is the problem of having the USTR negotiate an immigration 
agreement. They don't understand it either. And I don't think they 
really understand what has been accomplished here.
  Effectively, these agreements permit unlimited entry through 
Singapore and Chile under the L-1 visa category for any worker 
anywhere.
  In negotiating these agreements, the USTR has eviscerated existing 
requirements that U.S. corporations first demonstrate that there is a 
shortage of domestic workers in an industry seeking foreign workers. 
Every one of us knows that unemployment rates are on the rise. In 
professional and technical services, it is over 6 percent. In computer 
and mathematical occupations, it is 5 percent. In architecture and 
engineering occupations, it is 4 percent. In informational technology, 
it is 7 percent. In financial services, it is about 4 percent. In 
business and professional services, it is almost 9 percent.
  When there are all of these vacancies, why are we allowing new 
sources of low-wage labor into this country when we are not facing a 
labor shortage in any of these industries today? There is no public 
interest in keeping Americans unemployed in order to accommodate new 
guest worker programs that would be established by these trade 
agreements. Quite the contrary. We face the highest unemployment rate 
in almost a decade, and I can tell you it is high among these worker 
categories as well.
  I think these agreements are going to do no more than foster a race 
to the bottom where American workers are forced to compete with 
whatever foreign workers will accept in the lowest wage categories. 
That is wrong. This trend should be stopped, not exacerbated.
  In negotiating these agreements, the USTR has expanded the types of 
occupations currently covered under the H- 1B visa to include 
management consultants, disaster relief claims adjusters, physical 
therapists, and agricultural managers--professions that do not require 
a bachelors degree. This a weakening of what are supposed to be highly 
qualified and highly skilled workers. Now they are amending this to 
permit a whole host of unskilled categories. You don't even have to 
have a higher education to qualify to come in as a skilled worker in a 
technical field.
  These agreements lower the skill level in another way, too. In 
negotiating the agreements, the USTR has lowered the standards for 
which foreign professionals could enter the United States to work. 
Under current law, H-1B professionals must exhibit--and this is a term 
of art--highly specialized knowledge in the occupation for which he or 
she is seeking a visa. This agreement would require the applicant only 
to possess specialized knowledge. In other words, they are weakening 
the requirement. You don't need to be highly specialized, just 
specialized. And then for some, you don't even need to have a higher 
education.
  This distinction is critical because the highly specialized knowledge 
criteria used under the H-1B program was designed to ensure that 
employers don't abuse the program to undercut American workers in 
occupations where there is no skill shortage. I assume that this is a 
crucial point.
  To back that up, neither the trade agreement nor the implementing 
language would enable the Department of Labor to have the authority to 
investigate or conduct spot checks at worker sites, as they do now with 
H-1B visas, to uncover instances of U.S. worker displacement and other 
labor violations pertaining to the entry of foreign workers. So what 
this agreement is doing is handcuffing the Labor Department and 
removing from it specific authority that it has now to go out to 
investigate and to see whether the law is being abused and domestic 
workers are being replaced purposefully with foreign workers.
  You would say: Well, is this really necessary for them to have this 
authority? The answer is absolutely. There have been labor violations 
involving H-1B visas, and not a few but a lot. These violations have 
jumped more than fivefold since 1998, according to the Labor 
Department. Back pay awards for such employees who have been replaced 
have soared by more than 10 times, jumping from about $365,000 in 1998 
to over $4 million in 2002. So we know there is fraud going on. What 
this bill does is just simply eliminate the regulations to eliminate 
any investigation as to whether the fraud exists or not.
  In response to what I have just said about the soaring awards because 
of fraudulent uses of visas, Labor Department officials have stepped up 
H-1B investigations. They say there really could be thousands of H-1B 
workers today who don't file complaints because they fear the loss of 
their visa.

[[Page 20019]]

  In the last 5 years, Labor investigated 656 complaints involving H-1B 
visas. What did they find? They found that out of 308 cases that have 
become final, the Labor Department found 261 H-1B violations. That is 
almost a two-thirds rate of violation. Of that number, 227 employers 
owed 1,413 domestic workers who were replaced by foreign workers almost 
$8 million in back wages.
  This temporary work visa system gives employers tremendous power over 
immigrants. More than 1 million people already are employed in the 
United States under visas for skilled workers. The growing trend in H-
1B violations is proof that some companies will, in fact, violate and 
have violated the worker protection laws to protect their bottom line. 
This is happening now, and in a tough economy it is going to happen 
more often. Those of us who are elected by workers to protect them, if 
we vote for this agreement, fail to do our job because this agreement 
weakens protections. The most offensive aspect of these provisions is 
that the USTR has bargained away our sovereign right to set the 
criteria for admitting foreign visitors and workers to our country. 
Under the agreement, if Congress determines that the visa categories in 
this agreement should be subject to numerical limits or labor 
certification, we could well be subject to defending that decision 
before an international tribunal. So an international tribunal would 
decide the sovereignty of the United States of America to make these 
decisions.
  During a time when our country is preoccupied with the threat of 
terrorism on our soil, what protection do we have to prevent 
individuals from purposely utilizing and abusing this visa process?
  In essence, control over employment-based visas will effectively be 
taken out of the hands of Congress and placed in the hands of corporate 
executives, the USTR, and countries that are parties to these types of 
agreements. That is, frankly, unacceptable to me, and such proposals 
should be rejected by Congress.
  I don't think this Congress should relinquish its plenary authority 
over immigration to any administration, whether it be Democratic or 
Republican, nor to any country that is party to a trade agreement. It 
is hard to imagine that against the backdrop of the highest 
unemployment rate in almost a decade, this administration has 
negotiated what, in essence, is a permanent guest worker program. That 
is the hard fact of what is in this bill.
  Today in our Nation, 15 million people are unemployed, underemployed 
in part-time jobs out of economic necessity, or have given up looking 
for work altogether; 9.4 million are considered officially unemployed. 
In California, 1.1 million are out of jobs. The average person has been 
out of work for 20 weeks, a phenomenon this country has not seen since 
1948, in over 50 years.
  Yet while we are faced with unprecedented unemployment, we are 
negotiating and accepting a permanent guest worker program.
  Beneath the aggregate unemployment numbers is an even more disturbing 
trend. Unlike past instances of high unemployment, the ranks of the 
jobless are increasingly populated by highly skilled, college-educated 
workers. Workers who typically had little difficulty finding a new job 
are becoming discouraged by their lengthy stay on the unemployment 
roll.
  A recent CBS news segment on the Nation's unemployed captured so 
poignantly the lives behind the numbers. The Presiding Officer should 
know that this CBS clip was actually done in his State. The news 
footage shows a line of cars stretching out of sight down a flat two-
lane road in Logan, OH, where the jobless and struggling families were 
waiting for the twice-a-month distribution of free food by the local 
office of America's Second Harvest. The head of the agency said: We are 
now seeing a new phenomenon. Last year's food bank donors are now this 
year's food bank clients.
  CBS reporter Cynthia Bowers observed:

       You could call it a line of the times, because in a growing 
     number of American communities these days, making ends meet 
     means waiting for a handout.

  There are many reasons for the persistent weakness in the labor 
market. But I think we are making the situation worse by agreeing to 
the immigration provisions set out in these trade agreements. 
Increasingly, American workers have expressed fears of losing their 
positions to foreign workers who are paid considerably less and whose 
ability to remain in the United States is often contingent upon their 
not making trouble from their employer. I must tell you, I didn't 
believe this 5 or 6 years ago because I was importuned by one CEO after 
another to vote to increase the quota on H-1B visas.
  They all supported me, that there was no abuse. It was only when we 
began to look deeply into it that we found there was abuse.
  Today, more and more out-of-work technology workers are filing 
complaints with the Government or going to court to protest perceived 
abuses of temporary visa programs. We cannot simply blame the foreign 
workers for causing Americans to lose their jobs. It is shortsighted, 
behind-the-scenes policies such as these visa provisions, negotiated in 
secret, without any meaningful public hearing, included in trade 
agreements in small print, that invite a dependence on cheaper, more 
pliable foreign labor, and thus threaten American jobs.
  The scarcity of jobs has left many skilled immigrants more dependent 
on their employer and less willing to quit if trouble starts. The 
abuses have been particularly widespread in the high-tech industry, 
which used H-1B visas to bring in tens of thousands of programmers and 
other professionals. Remember, it is not just these workers; there are 
another 5.2 million coming in each and every year. They come in and 
companies seize upon them.
  Let me give you an example of testimony that is going on right now in 
the Judiciary Committee in the Immigration Subcommittee. A woman named 
Pat Fluno, a computer programmer and former Siemens employee, is 
testifying that she and 14 of her colleagues were required to train 
their foreign worker replacements before U.S. workers were laid off. 
Their replacements were foreign nationals on L-1 visas. That is exactly 
the visa program we are establishing in this trade agreement. They were 
paid one-third the salary the U.S. workers were making. There is no 
requirement that L-1 visa employers pay the prevailing wage. Ms. Fluno 
was making $98,000 a year. Her replacement is making $32,000 a year. 
This is Siemens, and that is what it did to 15 workers.
  Unlike U.S. workers, foreign workers on L-1 visas don't pay income 
tax. Ms. Fluno, before the Immigration Subcommittee of Judiciary right 
now, estimates that the Federal Government and the State of Florida 
would lose over $1.1 million in income taxes as a result of layoffs of 
the 15 employees.
  The international consulting firm that Siemens used to obtain the 
foreign workers knew that the U.S. workers would be laid off, so they 
did not use the H-1B visas to bring the workers in; they used the 
underregulated L-1 visa to get around the existing employer protection 
of the H-1B visa program. That is what we are creating more of in this 
bill.
  This type of abuse really should stop because if we don't stop it, it 
is going to go on. Look, if you pay an American worker $98,000 and you 
can bring in a technical worker and pay them $32,000, and it is OK, how 
would any of our workers ever be able to own a home and raise their 
kids?
  Temporary professional workers are often paid less than American 
workers despite requirements that they be paid prevailing wage rates. 
Employers seeking to hire H-1B workers can base their prevailing wage 
rates on third party salary surveys up to 2 years old. An H-1B worker 
in a job since the beginning of 2003 might still be getting the 2001 
prevailing rate.
  I only use this because H-1B is a much more regulated program than 
the L-1 visa program that is in this bill. You see how they can kind of 
gerrymander this program by using out-of-date prevailing wage rates.
  In December of last year, a New Jersey-based company, Pegasus 
Consulting Group, was ordered to pay

[[Page 20020]]

$231,279 in back wages to 19 former employees. Most of them were Indian 
nationals. The judge also required the company to pay $40,000 in civil 
money penalties for violating the prevailing wage provisions of the H-
1B visa rules. The judge found that some of the employees had gone 
several months without being paid. So this is happening today.
  Our Nation's growing dependence on foreign workers is not--and I 
originally thought it was--spurred by a lack of skills or education in 
the United States. In June of this year, an estimated 1.286 million 
bachelor's degrees were conferred all across the United States, along 
with 436,000 master's degrees, 80,400 professional degrees, and 46,700 
doctoral degrees. In addition, an estimated 633,000 associate's degrees 
were awarded. We have told, and continue to tell, our young people to 
acquire more education, to get a skill, to remain competitive in the 
job market, and they are doing so.
  If an advanced degree, years of experience, and a good work ethic are 
not enough to land a job and to keep a job, what does the future hold 
for the American worker? Now, for some, the answer to that question is 
really pretty tragic.
  Just in April of this year, Kevin Flanagan, a 41-year-old software 
programmer, took his life in the parking lot of Bank of America's 
Concord Technology Center on the afternoon he was told he lost his job. 
His father said it was the ``straw that broke the camel's back.'' 
Flanagan knew that his employer, Bank of America Corporation, as other 
corporations weathering the economic storm, was cutting high-tech jobs 
and sending them overseas. He applied for other jobs at the bank but 
didn't receive responses. His father said: ``He felt like he was 
fighting a large corporation that pretty much didn't care.''
  Kevin Flanagan's death, which is a suicide, underscores the anxiety 
that has swelled among technology workers throughout this land, at the 
Bank of America in particular, and elsewhere, as more businesses shift 
high-tech jobs to foreign workers, even as they cut those jobs in the 
United States. To add insult to injury, some employers are requiring 
U.S. workers to train their replacements before they are laid off, and 
then they see where their replacement worker earns one-third the 
salary.
  So I don't think we should gamble with the lives and livelihoods of 
American workers with an agreement the consequences of which are so 
problematic. I really find expanding the least regulated of all the 
visa categories at a time of economic distress in the United States, at 
a time when we have so many of our own highly skilled domestic workers 
out of work and looking for a job, somewhat cynical.
  To do this in secret, not do it by virtue of lawmakers who are 
elected, who know their States, who hold hearings, and then make 
adjustments to visas is really stealth and very ill advised.
  We should never use immigration law as a bargaining chip to negotiate 
bad trade deals. We should never have offered visas to Chile and 
Singapore as part of these trade deals, and we should not trade 
American jobs as part of a free-trade agreement. That is what we are 
doing in this trade agreement.
  Bear in mind, we already have tens of thousands of workers, highly 
skilled workers, coming in from Chile and Singapore every year under 
the H-1B visa. What is cynical here is that the L-1 visa does not have 
the protections the H-1B visa has, and the Labor Department cannot go 
out and do an investigation and, therefore, cannot certify that no 
American worker is being replaced in his or her job. So I have to 
accept that the reason they are doing the L-1 visa is because they want 
to do just that: replace American workers with foreign workers. 
Remember, you can have a Chilean-owned company or Singaporean-owned 
company, I believe, not necessarily in Singapore, that can qualify 
under this agreement.
  The fast-track process should not undermine Congress's authority 
under the Constitution, and that is what this agreement does. This is a 
bad trade bill, a bad precedent, and if this Congress does not stand up 
for its right to protect the American people, who will?
  We asked in the Judiciary Committee for more time. We were denied 
more time. We asked to send this bill back to the administration and 
ask them to sever the immigration provisions from the trade provisions, 
and we were refused in our request. I do not think because immigration 
law is complicated and every visa program has with it a different set 
of rules, regulations, procedures, and protocols and that creating more 
of one of the weakest, in terms of protecting American workers at a 
time when American workers need the most protection because of rampant 
unemployment--the highest unemployment in the 10 years I certainly have 
been in the Senate--seems to me it is not timely, it is not 
economically productive except for the bottom line of some companies.
  I believe in these remarks I have shown where many of these visas are 
being misused. I have shown where there is fraud, where there have been 
back payments made. And I have shown where already without this 
program, year in, year out, 5.2 million technical foreign workers come 
into this country without this addition.
  I conclude by saying that I think the real angst, if I may use that 
word, of this bill is for us to accept the abdication of our 
constitutional authority and power over immigration law. I cannot do 
that because I represent a very large State that is going to be 
affected by this trade agreement, and a State where we have 1,100,000 
people out of work, a State where the unemployment insurance trust fund 
is going to be in deficit at the end of next year and workers will not 
get anything when unemployed.
  I think it is not good public policy at a time of economic 
deprivation for millions of Americans to be bringing in workers who 
will take a third of the salary of their American counterpart, displace 
that counterpart, not complain and to, by law, say to the Department of 
Labor of the United States of America: You cannot investigate any one 
of these complaints, and you cannot make a determination whether, in 
fact, an American worker has been replaced unfairly by a foreign 
worker. We should not do that.
  I thank the Chair. I yield the floor.


                    Amendment No. 1386, As Modified

  Mr. ALLEN. Mr. President, I ask unanimous consent to speak for 5 
minutes in support of the Bond-Levin amendment.
  Mr. REID. Mr. President, under the order now in effect, we have to 
take somebody's time.
  The PRESIDING OFFICER. The Senator is asking consent.
  Mr. REID. To take whose time?
  The PRESIDING OFFICER. To have his own time.
  Mr. REID. I have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALLEN. Mr. President, I thank the Senator from Nevada.
  I rise today to join my colleagues in support of the Bond-Levin fuel 
economy amendment that reasonably improves safety, fuel economy, and 
environmental conservation as mutual goals. I am pleased to join with a 
bipartisan list of Senators as a sponsor of this amendment that will 
ensure that our public policy in America does not compromise common 
sense, the free market, consumer choice, safety, or American workers. I 
wish to touch on some of these key issues.
  Insofar as safety is concerned, estimates from the Harvard Center for 
Risk Analysis, Journal of Law and Economics, and Regulation Magazine 
have shown that between 2,000 and 4,500 deaths occur each year as a 
result of our current CAFE standards.
  The reality is very logical: With smaller, lighter cars there is a 
higher risk of injury when an accident occurs. The issue of vehicle 
cost also affects consumers. The National Academy of Sciences concluded 
that CAFE standards have raised prices by as much as $2,500 for cars 
and $2,750 for pickup trucks and SUVs.
  Clearly, if the opposition's amendments are adopted rather than the 
commonsense, reasonable approach that is proposed by Senator Bond and 
Senator Levin, we would have higher

[[Page 20021]]

prices. With higher prices, what do we get? Obviously, if fewer people 
can afford to purchase new vehicles, sales are reduced, which 
translates into fewer jobs in the automobile industry.
  The job loss issue is not theoretical. I have met with United Auto 
Workers in Virginia and learned that even a 1-mile-per-gallon increase 
in CAFE standards would result in the loss of approximately 10 percent 
of auto manufacturing jobs. The last thing I want to do is go down to 
the Ford F-150 assembly plant in Norfolk, Virginia and have the 2,000-
plus employees line up and say to them: One out of every 10 of you is 
going to lose a job because of what some officious people in Congress 
want to impose on America's auto industry and consumers.
  I do not want to do the same thing with the GM Powertrain facility in 
Fredericksburg-Spotsylvania County and tell those employees: One out of 
10 of you will lose your job because certain elected officials in 
Washington are taking away your ability to put food on the table for 
your families.
  The employment of over 116,000 Virginians is dependent on the 
automobile industry, and congressionally mandated unreasonable 
increases in CAFE standards will put these jobs in jeopardy.
  The great success of America as a world economic leader is based on 
freedom and the ability of the free market and consumer choice to 
prevail in the marketplace.
  Recently, my friend and fellow colleague from Missouri, Senator Bond, 
used a clever reference to a recent movie to describe the other side's 
approach to CAFE mandates, calling the approach ``too fast, too 
furious.''
  I also want to draw on Hollywood and the recent success of Arnold 
Schwarzenegger's latest ``Terminator'' movie and point out that the 
other side's unreasonable and unscientific approach terminates jobs, 
terminates safety, terminates consumer choice and terminates common 
sense.
  American's already have the choice of what vehicles they wish to 
drive. There are already vehicles available that get 40, 45, 50-plus 
miles a gallon. If Americans want smaller, lighter vehicles, they are 
available. It is important that we use sound science and common sense 
and trust free people to make the right choices for themselves, their 
families, and the environment.
  The Bond-Levin amendment states that auto experts at the National 
Highway Transportation Safety Administration and the auto and safety 
industry ought to have the ability to determine the best methods of 
achieving these goals. The CAFE numbers used by the other side, in our 
view, are arbitrary and truly based on political science as opposed to 
sound science.
  The Bond-Levin amendment increases the use of incentives to industry 
and consumers alike rather than punitive market distorting mandates 
that would decimate an industry responsible for approximately 3 percent 
of our gross domestic product and employs about 2\1/2\ percent of all 
Americans.
  Also, it is a very forward looking approach in that it provides tax 
incentives for research and development of advanced technological 
innovation in fuel cells, hybrids, and electric vehicles.
  It is my view that Congress should be in the business of providing 
incentives to people and manufacturers for innovation that do not 
compromise safety, do not cause the loss of American jobs, and do not 
preclude individual choice in the marketplace so that people can make 
their own decisions for themselves and their families.
  I ask my colleagues to support the Bond-Levin amendment. We should 
trust free people to make decisions for the health, safety, comfort, 
and well-being of their families. Most importantly, we ought to make 
sure that America stays strong and competitive.
  When we look at our auto industry, our strongest market base is in 
SUVs, minivans, and pickup trucks, which would be harmed by the 
opposition's amendments. So let us stand strong for American workers, 
as well as our families and free market, and support the Bond-Levin 
amendment.
  I ask unanimous consent that the text of a letter from the American 
International Automobile Dealers Association in support of the Bond-
Levin amendment be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            American International


                               Automobile Dealers Association,

                                    Alexandria, VA, July 25, 2003.
     Hon. George Allen,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Allen: On behalf of the American International 
     Automobile Dealers Association (AIADA), I am writing to urge 
     your support of the proposed amendment by Senators Bond (R-
     MO) and Levin (D-MI) to allow a regulatory approach to the 
     raising of CAFE standards. AIADA is the national trade 
     association representing over 10,000 American international 
     nameplate automobile dealers and the 500,000 American workers 
     who sell and service some of the finest automobiles and 
     trucks available in the world.
       The National Highway Traffic Administration (NHTSA) 
     recently issued a final rule on April 1, 2003 aggressively 
     increasing CAFE standards for light-duty trucks. NHTSA 
     increased the light-truck CAFE standard from the current 
     standard of 20.7 mpg to 21.0 mpg in model year (MY) 2005, 
     21.6 mpg for MY 2006, and 22.2 for MY 2007, the biggest 
     increase in over twenty years. The standard applies to pickup 
     trucks, mini-vans, and sport utility vehicles. NHTSA's charge 
     was to set the light-truck CAFE standard at the ``maximum 
     technologically feasible level'' while weighing the impact of 
     increasing CAFE standards against a host of criteria, 
     including vehicle safety, employment, and consumer choice, 
     among other factors. NHTSA allows a process to increase CAFE 
     standards that is based on sound science.
       AIADA believes the regulatory process is the best way to 
     increase standards in light of changing technology and market 
     conditions. The Bond-Levin amendment establishes new 
     standards through the regulatory process therefore ensuring 
     the consideration of key factors when increasing CAFE 
     standards.
       Lastly, consumer choice should not be jeopardized to meet 
     new federal standards. Consumer demand drives the automobile 
     retailing market. A dramatic increase in CAFE standards could 
     eliminate some of the most popular vehicles from the 
     marketplace.
       AIADA believes the Bond-Levin amendment is the best 
     solution to achieving increased fuel economy without 
     jeopardizing consumer choice and safety. AIADA opposes any 
     other CAFE amendments that propose to legislatively increase 
     current CAFE standards. We ask you to support the Bond-Levin 
     amendment as part of a national comprehensive energy policy.
           Sincerely,
                                               Marianne McInerney,
                                                        President.

  Mr. ALLEN. I yield the floor.
  Mr. VOINOVICH. Mr. President, as cochairman of the Senate Auto 
Caucus, I am pleased to join with my colleagues, Senator Bond and 
Senator Levin, as a cosponsor of this CAFE standards amendment to the 
energy bill. This is truly an important issue; one that impacts upon 
our Nation's economy, our environment, and the safety of the traveling 
public.
  There is no doubt that each of us wants the automobile industry to 
make cars, trucks, SUVs, and minivans that are as energy efficient as 
possible. Not only is it good for the environment, it also means more 
money in the pocket of the American consumer because they will spend 
less at the gas pump.
  However, I am deeply concerned that the extreme Corporate Average 
Fuel Economy standard supported by some of my colleagues will have a 
devastating effect on public safety, as well as put a severe crimp in 
the manufacturing base of my State of Ohio which is already under 
duress because of high natural gas costs, litigation, health care 
costs, and competition from overseas.
  Two years ago, new vehicle sales of trucks, SUVs and minivans 
outpaced the sale of automobiles for the first time in American 
history. This remarkable result can be attributed to a number of 
factors, but one reason that is often cited is the fact that these 
vehicles are seen as safer.
  Another concern is that an arbitrary standard would have a 
devastating effect on jobs. Ohio is the No. two automotive 
manufacturing State in America, employing more than 630,000 people 
either directly or indirectly. I have heard from a number of these men 
and women whose livelihood depends on the auto industry and who are 
frankly very worried about their future.

[[Page 20022]]

  There is genuine concern that a provision mandating an arbitrary 
standard could cause a serious disruption and shifting in the auto 
industry resulting in the loss of tens of thousands of jobs across the 
Nation.
  For example, DaimlerChrysler's fleet of light trucks makes up more 
than 50 percent of their entire fleet. The company manufactures the 
Jeep Liberty and the Jeep Wrangler in Toledo, OH and employs 
approximately 5,200 workers at this plant. If an arbitrary CAFE 
provision is mandated that requires a shifting of vehicles 
manufactured, this plant could close because Chrysler would be forced 
to redistribute their manufacturing base to build more small, high-
mileage cars.
  The Bond-Levin amendment is a rational proposal that will keep 
workers both in Ohio and nationwide working, allowing these men and 
women to continue to take care of their families and educate their 
children while also encouraging greater fuel efficiency and safer 
vehicles.
  This amendment calls for the Department of Transportation to increase 
fuel economy standards based on several factors including the 
following: technological feasibility; economic practicability; the need 
to conserve energy; the desirability of reducing U.S. dependence on 
foreign oil; the effect on motor vehicle safety; the effects of 
increased fuel economy on air quality; and the effect on U.S. 
employment.
  I believe this is a much more responsible approach that will improve 
the fuel efficiency of our Nation's vehicles while also protecting 
public safety and our nation's economic security.
  This amendment also requires that the Department of Transportation 
complete the rulemaking process that would increase fuel efficiency 
standards within 2\1/2\ years. If the administration doesn't act within 
the required timeframe, Congress will act, under expedited procedures, 
to pass legislation mandating an increase in fuel economy standards 
consistent with the same criteria that the administration must 
consider.
  The amendment will also increase the market for alternative powered 
and hybrid vehicles by mandating that the Federal Government, where 
feasible, purchase alternative powered and hybrid vehicles.
  I believe that this guaranteed market will encourage the auto 
industry to continue to increase their investment in research and 
development with an eye towards making alternative fuel and hybrid 
vehicles more affordable, available and commercially appealing to the 
average consumer.
  As a matter of fact, I have ridden in a hybrid manufactured by 
DaimlerChrysler, and I have driven a fuel cell automobile manufactured 
by General Motors. I firmly believe that my children and grandchildren 
will one day be driving automobiles that run on hydrogen and give off 
only water. However, it will take time for the technology that makes 
these vehicles possible to be cost-effective and for these vehicles to 
be marketable.
  Until then, truck, SUV, and minivan demand is not expected to 
decrease anytime soon. Automakers that are meeting this demand will 
have to manufacture and sell a high-gas mileage vehicle that likely 
does not exist now. This will only increase prices for the safe 
vehicles America wants.
  I urge my colleagues to support the Bond-Levin amendment. It meets 
our environmental, safety and economic needs in a balanced and 
responsible way, contributing to the continued and needed harmonization 
of our energy and environmental policies.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, pending are the Durbin amendment, the Levin 
amendment, another Durbin amendment, and the Campbell amendment. I ask 
unanimous consent that the Feinstein CAFE amendment be the next 
Democratic amendment in order. I recognize that the right of first 
recognition comes on the other side. I want there to be an agreement 
though that the next amendment we would offer would be that of Senator 
Feinstein dealing with CAFE.
  The PRESIDING OFFICER. Is there objection?
  Mr. LEVIN. Reserving the right to object.
  Mr. ALLEN. Objection.
  Mr. LEVIN. We object.
  The PRESIDING OFFICER. Objection is heard.
  The Senator from Michigan.
  Mr. LEVIN. Mr. President, I rise in support of the Bond-Levin 
amendment. I ask that Senator Mikulski be added as a cosponsor to my 
amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEVIN. Mr. President, I rise in support of the Bond-Levin 
amendment and in opposition to the Durbin amendment. I will take about 
8 or 9 minutes to lay out some of the differences between the two 
amendments. There are some very key differences.
  First, our amendment, the Bond-Levin amendment, employs positive 
incentives to promote the leap-ahead technologies which are so critical 
if we are going to make significant improvements in fuel economy. We do 
this in a number of ways right in this amendment, including the 
research and development part of this amendment where we authorize a 
significant increase in the funds for the Department of Energy to 
develop advanced hybrid vehicles, where we provide significant funds 
for the Department of Energy to work collaboratively with industry to 
research and develop clean diesel technologies, and a number of other 
ways.
  In a separate amendment, dealing with the tax side, there will be an 
effort made to provide some additional incentives in that area as well.
  In the body of the Bond-Levin amendment, we will be promoting the 
leap-ahead technology development by using the purchasing power of the 
Government to buy the hybrids which are going to be made available in 
the next few years. Since Government purchases a significant number of 
vehicles, it is essential that we use that purchasing power to acquire 
those new vehicles which will create a demand for those vehicles and 
help to commercialize them as well.
  We require the Government purchase of hybrid trucks for our fleet of 
light trucks that are not covered by the Energy Policy Act. So there is 
no conflict between what we do in this bill and the Energy Policy Act 
itself.
  There is another major difference between our approach and the 
approach in the Durbin amendment. What we do is we direct NHTSA, the 
Department of Transportation, to raise the fuel economy standards but 
we do not pick an arbitrary number to be reached. Instead, we set forth 
a series of factors which we want NHTSA, the Department of 
Transportation, the agency that has the expertise to do this and has 
done this and has been given that responsibility historically to set 
these standards, we lay out a number of criteria which we want them to 
consider, including what technologies might be available, which are 
emerging, what will be the cost of those technologies, what are the 
safety considerations, what are the job considerations, what are the 
air quality considerations, what will be the savings in terms of fuel, 
including imported oil. A whole host of criteria are set out which they 
should consider but which are not at all considered by selecting an 
arbitrary number and simply plugging that into a law.
  To pick one factor which is real, and that is the safety factor, the 
National Academy of Sciences, in its report, found that in just the 1-
year study, which was 1993, the effect of CAFE, which was already in 
law, was the death of between 1,300 and 2,600 people. They also found 
that between 13,000 and 26,000 additional moderate to critical injuries 
occurred because the CAFE standard which had been put in law resulted 
in down weighting and downsizing of vehicles.
  Should we consider safety? Should someone consider safety? I would 
hope so. Should that be a factor which should be looked at in the 
rulemaking process? I would hope so, among all the other factors.
  Saving fuel is important, and our amendment does that. It will lead 
to fuel savings but we do it in a very different way. Instead of 
selecting an arbitrary number, a very high number in

[[Page 20023]]

the Durbin amendment, 40 miles per gallon, we direct NHTSA to use the 
various relevant factors to reach a conclusion, not just what is 
technologically achievable regardless of cost but what is the cost, 
what is the cost benefit, and all the other factors, including safety 
and impact on jobs.
  There is another major difference between our approach and the Durbin 
amendment. It is not just that the Durbin amendment picks a number, a 
very high number, for this new CAFE standard, but in doing so, it uses 
the current structure. That so-called CAFE structure limits the 
production and sale of domestic SUVs of the same efficiency as imported 
SUVs, on which it has far less impact.
  This is a critical issue. It is an issue which is not adequately 
understood by colleagues because it is very complicated. The very 
fundamental CAFE structure, because it was designed to look at the 
entire fleet instead of dividing the fleet into different 
classifications by weight, has an inherently discriminatory impact on 
those companies which have traditionally produced the larger vehicle. 
It has favored the imports because those companies have tended to 
produce the lighter weight vehicles, the vehicles at the lighter end of 
the continuum.
  I quote the National Academy of Sciences because they have made a 
statement which I hope all of our colleagues would pause to consider 
before voting for the Durbin amendment. This is what they said in a 
January 2002 report:

     . . . one concept of equity among manufacturers requires 
     equal treatment of equivalent vehicles made by different 
     manufacturers.

  Now the key words:

       The current CAFE standards fail this test.

  This is something which is so fundamental to American jobs that it is 
critical all of us take some time to read that portion of the National 
Academy of Sciences study and to fully soak in its impact as to what it 
is saying. Equal treatment of equivalent vehicles made by different 
manufacturers is not achieved by CAFE.
  By piling an arbitrary number on that CAFE structure, as the Durbin 
amendment does, it worsens the situation. The equivalent vehicles of 
equal efficiency are treated differently depending on the manufacturer, 
and the difference works against the domestic manufacturer; that is, 
jobs which are lost with no benefit to the air at all.
  There is no reason I can conceive as to why we would want to say it 
is OK to drive a 17-miles-per-gallon imported SUV, but it is not OK to 
drive a 17-miles-per-gallon domestic SUV. It does nothing for the air 
to reach that result. Yet that is what the current CAFE structure leads 
to.
  I have one other quote from the National Academy of Sciences report.

       A policy decision to simply increase the standard for 
     light-duty trucks to the same level as for passenger cars 
     would operate in this inequitable manner. Some manufacturers 
     have concentrated their production in light-duty trucks while 
     others have concentrated production in passenger cars. But 
     since trucks tend to be heavier than cars and are more likely 
     to have attributes, such as four-wheel drive, that reduce 
     fuel economy, those manufacturers whose production was 
     concentrated in light-duty trucks would be financially 
     penalized relative to those manufacturers whose production 
     was concentrated in cars. Such a policy decision would impose 
     unequal costs on otherwise similarly situated manufacturers.

  I don't understand why we would even think about treating similar 
vehicles of similar fuel efficiency in a different way, particularly 
when that works against the domestic manufacturers.
  The Durbin amendment compounds this problem by raising the SUV level, 
at least in the case of the minivans and SUVs themselves, to the same 
requirement as standard vehicles. In doing so, it compounds the 
problem, the discriminatory effect, of the CAFE structure. I hope for 
that reason and the other reasons I have mentioned that we will defeat 
the Durbin amendment and adopt an alternative approach which focuses 
more on positive incentives to achieve fuel economy, which is what the 
Bond-Levin approach does and which also focuses more on the rulemaking 
authority, the efficiency, the experience, and the fairness of the 
Department of Transportation that would look at all of the factors 
which should go into the rulemaking rather than picking an arbitrary 
number.
  I yield the floor.
  Mr. BOND. Mr. President, I have conferred with the minority whip. 
Some of our colleagues are in a meeting of the Energy and Natural 
Resources Committee. I urge those who have time who are not on the 
Energy and Natural Resources Committee to follow the distinguished 
Senators from Michigan and take their time and express their views so 
we may get on with this debate. We hope to have votes on these very 
important amendments.
  Mr. REID. Mr. President, I will yield in a brief minute to the junior 
Senator from Michigan. While the acting leader is here, I want the 
record to reflect we are doing everything we can to cooperate in the 
consideration of this Energy bill. There was an hour we could have done 
nothing because there was no one here to do anything because they are 
meeting at the White House. In an effort to expedite matters, there was 
an order pending on the Singapore and Chile trade agreements. There are 
7 hours of debate in an order here before we vote on that; we used an 
hour of that time even though that was not anything we had to do.
  If we were trying to ``slow walk,'' as was said here today, that 
would have been an easy way to slow walk. The Senator from California 
came to the floor and used her hour.
  The record should reflect this Energy bill is a very complex bill. 
People in good faith have different views on the legislation. As I said 
this morning, there is not a single Democratic Senator who does not 
want an Energy bill.
  Mr. BOND. I thank the minority whip for his words. Obviously, there 
are times when other discussions have to go forward on the floor, and 
it was clear that the Senator from California had time. There will be 
many other areas of accommodation, setting aside amendments, to move on 
to the electricity amendment, for example.
  We appreciate the cooperation of both sides of the aisle. I simply 
urge those who are not committed to the energy meeting to bring their 
positions to the floor and let us hear them.
  The PRESIDING OFFICER (Mr. Chafee). The Senator from Michigan.
  Ms. STABENOW. Mr. President, I rise today to support the Bond-Levin 
amendment and I am very pleased to be a cosponsor. I commend both my 
colleague from Missouri and my senior Senator from Michigan for their 
work on this issue, and I certainly commend the Senator from Michigan 
for his statement. He presented the argument very well.
  I also rise to oppose the Durbin amendment. I begin by saying this 
debate is not about whether we should increase vehicle fuel efficiency. 
That is not what this is about. I agree with Senator Durbin about the 
importance of creating more fuel-efficient cars and SUVs, not only 
because it decreases our consumption of oil and our dependence on 
foreign oil but because of the important benefits it has to our 
environment.
  This debate is about what is the best way to increase fuel efficiency 
without punishing U.S. manufacturers and American jobs. We have made 
significant progress since last year's debate. NHTSA is moving forward 
with increasing CAFE standards. This past April, it announced its final 
rulemaking for light trucks for model years 2005 through 2007. This 
will be the largest CAFE increase in 20 years and
  NHTSA has already announced plans to continue with rulemaking for the 
2008 model year and beyond, later this year.
  While this progress is extremely important, there are significant 
problems with the current CAFE standards and the way they are 
calculated. For example, the regulations continue to ignore such basic 
factors as the adverse competitive impacts of CAFE on our U.S. 
automakers, impacts on U.S. employment, and technology costs and 
necessary lead-time--which is very important.
  The Bond-Levin amendment addresses these problems and builds on 
Senator Landrieu's amendment to reduce

[[Page 20024]]

our dependence on foreign oil by 1 million barrels a day, an amendment 
I supported.
  However, the Durbin amendment not only fails to fix the problems with 
the current CAFE system, but it makes them significantly worse.
  Despite producing vehicles that are as fuel efficient, and often more 
fuel efficient than their foreign counterparts, our U.S. automakers 
continue to have a lower CAFE average then their foreign competitors. 
Why? That doesn't make any sense. Because the CAFE system does not 
reflect the real fuel economy of the cars and trucks in an automaker's 
fleet; instead it really reflects what vehicles consumers buy.
  Therefore, an automaker can increase the fuel efficiency of all of 
its vehicles but still have a decline CAFE average depending on what 
models sell the most.
  For example, over the past 4 years, GM has introduced new car and 
light truck models that are more fuel efficient than the models that 
they replaced, but GM's light truck CAFE has actually gone down.
  In model year 2001, GM's combined car and truck CAFE average was 24.2 
miles per gallon. For model year 2002, GM made fuel economy 
improvements to 18 different vehicles in its fleet, including SUVs and 
pickup trucks.
  Some of these vehicles had 18 percent, 17 percent, 10 percent 
improvements in fuel economy over the previous year's models. The 
Chevrolet Silverado, a full size pickup truck, had over a 7 percent 
improvement on fuel economy.
  But do you know what GM's combined car and truck CAFE average was for 
model year 2002? It was 23.4 miles per gallon, a 0.8 mile per gallon 
decrease from 2001. GM improved the fuel economy of 18 vehicles and 
their CAFE actually went down.
  How does a system that does not reflect actual improvements in 
vehicle fuel economy and penalizes automakers for doing the right thing 
make sense? That is what this debate is about.
  During last year's debate on this issue, we discussed in great depth 
the need for building a real federal partnership with our automakers to 
develop cleaner, advanced technologies, over arbitrarily picking higher 
CAFE numbers. The Senate resoundingly supported the first approach with 
a vote of 62-38 for last year's Levin-Bond amendment which I was 
pleased to cosponsor.
  The Durbin amendment, however, would increase the CAFE standard for 
passenger cars from 27.5 miles per gallon to 40 miles per gallon--a 45 
percent increase--in only 10 years. Incidentally, excluding hybrid and 
diesel vehicles, there are no cars on the market today that would meet 
this requirement.
  It would also shift SUVs into the passenger car category, requiring 
SUVs that currently have a 20.7 mile per gallon CAFE standard, to 
double their fuel efficiency and meet a 40 mile per gallon standard. 
That would require an almost 100 percent CAFE increase for SUVs in just 
10 years.
  This amendment will have a disproportionately negative impact on our 
Big Three automakers, since they make a higher proportion of SUVs and 
pick up trucks than passenger cars. Furthermore, this CAFE proposal 
will not guarantee a more fuel efficient SUV, but it will guarantee 
that the SUV will not be made by an American auto company. How does 
that make sense?
  It is also important to remember that the 40 miles per gallon number 
in this amendment is not anywhere in the National Academy of Science's 
2001 report on CAFE.
  Even under the most optimistic scenarios in the NAS report, which 
assume that consumers are willing to recover the higher costs of the 
technology over a 14 year period instead of a 3 year period and assume 
``low'' technology costs, the highest projected level for any car 
within the 10-15 year timeframe, is 38.9 miles per gallon and that is 
for subcompact passenger cars.
  And that is less than 40.
  So if you assume that everyone gives up the SUV, gives up the truck, 
gives up the midsize car even, and goes to a subcompact passenger car, 
even if we all did that, we would not be able to reach the number in 
the Durbin amendment.
  This amendment sets a CAFE number that according to the experts at 
NAS, not even the smallest passenger car could meet today.
  The Bond-Levin amendment increases vehicle fuel efficiency without 
placing anticompetitive restrictions on our U.S. automakers. The 
amendment looks to the future, and provides the market incentives and 
investment in developing technologies that will really revolutionize 
the automobile industry.
  The amendment directs the NHTSA to complete a rulemaking to increase 
fuel efficiency for passenger cars within the next 30 months, and 
standards for model year 2008 and beyond for light trucks within the 
next 32 months, but it also requires NHTSA to consider the flaws in the 
current CAFE system for this rulemaking.
  We need to let the experts at NHTSA continue to do their job. And 
NHTSA has already moved forward by announcing the recent regulations 
for light trucks, the largest CAFE increase in 20 years.
  Congress also needs to help automakers move in the right direction, 
instead of pulling them in the wrong one. Our automakers have already 
invested millions of dollars in developing cleaner, better 
technologies, and these investments are starting to pay off for the 
American consumer.
  For example, a hybrid electric version of the GM Sierra full size 
pickup truck is going into production next year. Ford is currently 
developing a hybrid Ford Escape SUV which will be capable of being 
driven more than 500 miles on a single tank of gasoline.
  In addition to these great technological developments, automakers 
have been working on fuel cell vehicles which could revolutionize the 
automobile sector within the next 15 years.
  The Durbin amendment will force automakers to divert funding and 
research away from these important technological advancements and make 
meeting these incremental CAFE increases a funding and research 
priority. The Durbin amendment also locks the automakers into a rigid 
fuel efficiency plan for the next 10 years, setting back the progress 
they should be making on these important technologies.
  Instead of placing restrictions on what our automakers produce, we 
should be looking for ways to help them introduce these better, cleaner 
technologies.
  The Bond-Levin amendment includes incentives such as federal fleet 
purchase and alternative fuels requirements and a real federal 
investment in hybrid and clean diesel research and development.
  These incentives will help create and build market demand for the 
more fuel efficient hybrid, electric or fuel cell vehicles, instead of 
locking automakers into costly incremental CAFE increases.
  I urge my colleagues to vote for Bond-Levin-Domenici-Stabenow 
amendment and support increased fuel efficiency and a vibrant, 
economically healthy U.S. auto industry.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I rise to support the Durbin amendment 
to raise the fuel economy standard and close the SUV loophole. I 
consider this truly bipartisan because I disagree with Democrats as 
well as our Republican friends. But I feel compelled to bring a problem 
to the public with which we have to deal.
  I think it is fair to say that this amendment strikes a reasonable 
note in what is too often a contentious debate.
  Today, 18 years after the first Corporate Average Fuel Economy 
standards were implemented, the standards for cars, trucks, and SUVs 
remain unchanged.
  We are running in place and a major reason is that when CAFE 
standards were first required in 1975, light trucks made up just 20 
percent of the market and were used mostly for work, not for 
negotiating congested urban streets.
  But that was a quarter century ago. Today, light trucks--a category 
that includes SUVs and minivans--represent half of all vehicles sold.

[[Page 20025]]

  SUVs produce 48 percent more smogforming exhaust and 44 percent more 
greenhouse gases than cars.
  Today's SUVs are not light trucks. They are passenger vehicles and we 
should regulate them as such.
  The impact of regulating SUVs as passenger vehicles, instead of 
trucks, would be impressive: we would save more than 40 billion gallons 
of gasoline by 2010--an average of 6 to 7 billion gallons a year.
  By updating our regulations to reflect today's driving realities 
consumers would also save $7 billion at the pump during that same 
period, according to the Union of Concerned Scientists.
  Another reason to raise CAFE standards is global warming.
  The U.S. transportation sector is responsible for nearly one-third of 
all U.S. greenhouse gas emissions.
  Since 1975, the miles traveled by vehicles have skyrocketed by 150 
percent.
  Higher CAFE standards are essential to cleaning up the air of our 
Nation's metropolitan areas and in protecting the health of Americans--
especially the health of our young and our elderly who are most 
vulnerable.
  The Durbin amendment provides until 2015 to set the CAFE standard to 
40 miles per gallon.
  So this amendment is reasonable, it is doable, and it is the right 
step toward reducing our dependence on foreign oil.
  But there are a few standard myths invoked by opponents of better 
fuel economy standards that could prevent some of our colleagues from 
supporting this amendment. I would like to try to straighten that out.
  For example, we usually hear that jobs will be lost. Detroit worries 
that requiring better mileage standards will hurt car sales and lead to 
job losses.
  But I submit that by their insistence on maintaining a decades-old 
status quo, American car manufacturers are stuck in reverse.
  Instead of improving fuel economy, we have just hit a 22-year low.
  The Big Three have demonstrated considerable skill in improving 
everything about American vehicles--except for their fuel economy.
  It is that backward thinking that will actually hurt their businesses 
and lead to job losses.
  EPA's Green Vehicle Guide for 2003 models revealed that out of the 
top 75 most fuel efficient vehicles, there were only four American 
models--only four! We can do better than that!
  Another claim often heard is that lighter cars will lead to more 
highway deaths.
  I submit this is a disingenuous and specious scare tactic.
  In fact, a University of Michigan study found that based on deaths 
per million vehicles sold, SUVs are more dangerous than most types of 
cars on the road.
  Contrary to conventional wisdom, the study went on to say that many 
small cars have lower total mortality rates than SUVs.
  In other words, vehicle weight does not necessarily determine a 
vehicle's overall safety performance.
  The Big Three insist that they are victims of ``consumer choice,'' 
that they only give American car buyers what they demand.
  But while Americans like the convenience of an SUV, they certainly 
don't like to spend $45 or $50 filling the tank once or twice a week.
  Americans want fuel-efficient automobiles which save them money at 
the pump.
  The facts are clear. For the health of Americans, for environmental 
protection, for our energy security and for our pocketbooks, I urge my 
colleagues to close the SUV loophole and raise the bar for CAFE 
standards by voting for the Durbin amendment.
  I also not once again the fact that there is a sufficient period of 
time put out there for these standards to be met.
  I yield the floor.
  Mr. FEINGOLD. Mr. President, I am voting in favor of the Bond-Levin 
Amendment, and I want to explain my views in detail. Fuel efficiency is 
a critically important issue for our country, for my home State of 
Wisconsin, and for our future. I remain committed to the goal that 
significant improvements in automobile and light truck fuel efficiency 
can be achieved over an appropriate time frame. Some will argue that my 
vote for Levin-Bond is a vote against increasing Corporate Average Fuel 
Economy, CAFE, standards; I do not share that view. The Bond-Levin 
amendment seeks to renew the Department of Transportation's role in 
setting CAFE standards acting through the National Highway Traffic 
Safety Administration, NHTSA. It requires NHTSA to set new standards by 
a time certain. If Congress does not act today to try to restore 
normalcy to the NHTSA process, Congress will always either block or act 
to set CAFE standards, every 20 years or so, when the political will is 
sufficient to do so. It will never become part of the normal process of 
reviewing and incrementally improving fuel efficiency for automobiles, 
as Congress originally intended when it passed the CAFE law in the 
1970s.
  As I did in the debate on last year's energy bill, I am committing 
myself to a consistent position on CAFE. Other interests have not done 
so. With my vote, I am affirming my past position, and I want to 
explain the evolution of that position.
  Months prior to the midterm elections in 1994, NHTSA published a 
notice of possible adjustment to the fuel economy standards for trucks 
before the end of the decade. The following year, however, the House-
passed version of the fiscal year 1996 Department of Transportation 
Appropriations bill prohibited the use of authorized funds to 
promulgate any CAFE rules. The Senate version did not include the 
language, but it was restored in conference. Much the same scenario 
occurred in the second session of the 104th and the first session of 
the 105th Congresses. In both those sessions, a similar rider was 
passed by the House and not by the Senate, but included by the 
conferees and enacted. However, the growth in gasoline consumption and 
the size of the light-duty truck fleet were concerns cited behind 
introduction in the Senate of an amendment to the bill expressing the 
Sense of the Senate that the conferees should not agree to the House-
passed rider for fiscal year 2000. The amendment, sponsored by the 
former Senator from Washington, Mr. Gorton, and the Senator from 
California, Mrs. Feinstein, was defeated in the Senate on September 15, 
1999 by a vote of 55-40 and the rider was once again enacted into law.
  As I stated on the Senate floor in the debates on the CAFE rider on 
June 15, 2000, my vote was about ``Congress getting out of the way and 
letting a federal agency meet the requirements of federal law 
originally imposed by Congress.'' I supported removing the rider 
because I was concerned that Congress had blocked NHTSA from meeting 
its legal duty to evaluate whether there is a need to modify fuel 
economy standards by legislative rider.
  As I made clear then, I have made no determination about what fuel 
economy standards should be, though I do think that additional 
increases are possible, and that the recent rulemaking affirms that 
view. NHTSA has the authority to set new standards for a given model 
year taking into account several factors: technological feasibility, 
economic practicability, other vehicle standards such as those for 
safety and environmental performance, the need to conserve energy, and 
the recommendations of the National Academy of Sciences. I want NHTSA 
to fully and fairly evaluate all the criteria, and then make an 
objective recommendation on the basis of those facts. I expect NHTSA to 
consult with all interested parties--unions, environmental interests, 
auto manufacturers, and interested citizens--in developing this rule. 
And, I expect NHTSA to act, and if it does not, this amendment requires 
Congress to act on a standard.
  Voting against the Bond-Levin amendment would mean that I subscribe 
to the view that the rulemaking process cannot work. I do not support 
that view, just as I could not support retaining the CAFE rider in law.
  The NHTSA should be allowed to set this standard. Congress is not the 
best forum for understanding whether or not improvements in fuel 
economy can

[[Page 20026]]

and should be made using existing technologies or whether emerging 
technologies may have the potential to improve fuel economy. Changes in 
fuel economy standards could have a variety of consequences. I seek to 
understand those consequences and to balance the concerns of those 
interested in seeing improvements to fuel economy as a means of 
reducing gasoline consumption, dependence upon foreign oil, and 
associated pollution.
  In the end, I would like to see that Wisconsin consumers, indeed all 
consumers, have a wide range of new automobiles, SUVs, and trucks 
available to them that are as fuel efficient as can be achieved while 
balancing energy concerns with technological and economic impacts. That 
balancing is required by the law. I fully expect NHTSA to proceed 
expeditiously with the intent to fully consider all those factors, and 
this amendment ensures they do so.
  In supporting this amendment, I maintain the position that it is my 
job to ensure that the agency responsible for setting fuel economy be 
allowed to do its job. I expect them to be fair and neutral in that 
process and I will work with interested Wisconsinites to ensure that 
their views are represented and the regulatory process proceeds in a 
fair and reasonable manner toward whatever conclusions the merits will 
support.
  Ms. MIKULSKI. Mr. President, I rise as a cosponsor of the Bond-Levin 
amendment to provide a reasonable compromise on CAFE standards. Our 
amendment provides a strategy for energy conservation while 
safeguarding American jobs. I strongly believe in energy conservation, 
and I support the effort to build more fuel efficient cars. Yet I also 
believe in job conservation. I believe we can improve the fuel 
efficiency of our cars without making it even harder for American 
workers to compete.
  In considering any fuel efficiency standard proposal, I apply four 
criteria. Any proposal must achieve real savings in oil consumption. 
Secondly, it must preserve U.S. jobs. The goals for increased CAFE 
standards must be realizable and achievable by giving companies a 
reasonable lead time to adjust their production. And finally, it must 
create incentives to enable companies to achieve these goals. The Bond-
Levin amendment meets this criteria.
  I strongly agree with the underlying goals of greater fuel efficiency 
and energy conservation associated with increases in CAFE standards. We 
desperately need to reduce our dependence on foreign oil. We use about 
20 million barrels of oil a day. About 40 percent of that goes to fuel 
cars and light trucks. Half of our oil is imported, a quarter of which 
from the Persian Gulf. It is imported from countries like Saudi Arabia, 
which sits on roughly two-thirds of all the oil reserves in the world. 
A reduction in our dependency on foreign oil would also greatly 
increase our flexibility in the war against terrorism. That's why I 
supported the Landrieu amendment. This amendment requires the President 
to submit to Congress a yearly report on the progress made toward 
reducing our dependency on foreign petroleum imports by 2013. This 
amendment also requires the Administration to develop and implement 
strategies to reduce our dependency by 1 million barrels of oil per day 
by 2015.
  I support the key provisions in the energy bill that will help us 
conserve fuel. We need to build on these innovative provisions that 
encourage better fuel economy. And we must do it in a way that doesn't 
cost American jobs. That's why I oppose legislating arbitrary increases 
on CAFE.
  Arbitrary increases in CAFE would be counterproductive. Any increase 
should be a question of science, not the result of legislative 
compromise. The NAS study said the most efficient small car could 
achieve 35.1 mpg within 15 years and the most efficient small truck 
could achieve 30 mpg within 15 years. One standard for small cars, one 
for small trucks. The study said nothing about a combined calculation 
for cars and trucks. There was no recommendation for an entire vehicle 
fleet.
  Other proposals which call for an arbitrary increase in CAFE would 
have a devastating effect on our Nation's biggest industry--the 
automobile industry. It is unfair to the American auto worker. In my 
State of Maryland, 1,500 people work at the GM plant at Broening 
Highway in Baltimore building mini-vans. The workforce at the Broening 
Highway plant is down from 2,700 workers in the mid 1980's. Arbitrary 
increases would give an unfair advantage to foreign car manufactures 
and penalize U.S. automakers and auto workers, like the hard-working 
men and women at the Broening Highway plant, for selling vehicles that 
Americans are actually buying.
  Large vehicles represent a small portion of the total fleet of 
European and Japanese auto companies. These companies produce so many 
smaller cars because that's what their customers buy. Most of their 
markets are in Europe and Asia where the landscape is much different. 
Consumers pay as much as $4 or $5 per gallon of gas. They have narrower 
roads and a limited highway infrastructure. Bringing a small fleet into 
the U.S. allows them to easily comply with our fuel economy standards. 
Even when you include their SUV's and light trucks, the average fuel 
efficiency standard for their fleet is still low.
  When a foreign auto maker exceeds our fuel efficiency standards they 
also earn CAFE ``credits'' to buffer them in future years. These 
credits can be shifted to offset shortfalls for up to three model 
years. This means that if companies have a banner year selling smaller, 
more efficient vehicles, they can buffer future sales of larger trucks 
and SUVs. But this does not mean that foreign manufacturers sell more 
fuel efficient trucks and SUVs. In fact, the difference is usually 3-4 
mpg. Their dependence on a smaller fleet allows them to enter the truck 
and SUV market without worrying about the CAFE standards of the larger 
vehicles.
  Over the past decade, U.S. manufacturers struggled to meet CAFE 
requirements across a full-line of vehicles--both cars and trucks. 
Because a higher proportion of the U.S. automakers' fleets are trucks, 
raising CAFE standards will have more severe adverse effects on GM, 
Ford, and DaimlerChrysler than on other manufacturers.
  Proposals to increase CAFE standards are also unattainable. They set 
aggressive standards on too short a timeline. This is in direct 
contrast to the NAS panel, which states ``Technology changes require 
very long times to be introduced into the manufacturers' product 
lines.''
  Within any argument on CAFE, we must not forget to take into account 
the demands of consumers. A drastic increase in fuel efficiency 
standards causes a drastic change in the types of cars, which causes a 
limited choice of available cars and trucks for consumers. Alternate 
proposals set a default level for light trucks that is not achieved by 
ANY light truck on the road today. This would effectively cap the sales 
of light trucks--it would curb consumer choice.
  I believe we can find other ways to achieve fuel conservation that 
won't cost American jobs. Our domestic automakers have already been 
weakened by the current recession, and we can't rely on foreign 
manufacturers to provide American jobs.
  The numbers don't lie. The NAS reports that the United Auto Workers 
has seen its membership drop from 1.4 million members to 670,000 from 
1980 through 2000. This loss was countered by the creation of only 
35,000 jobs in assembly plants built in the U.S. by foreign automakers 
although imports have risen by 9 percent over the past 8 years. Our 
domestic auto share is falling. Only 64 percent of cars bought in 
America today are built in America compared to 73.9 percent in 1994. 
1,000 workers were recently laid off at the GM plant in Baltimore, and 
the plant went through another shutdown after slow sales. In fact, GM 
shut down 14 of its 29 North American assembly plants for at least a 
week last year.
  Today, all manufacturers have advanced technology programs to improve 
vehicle fuel efficiency, lower

[[Page 20027]]

emissions and increase occupant protection. A return to a flawed 
regulatory program of higher CAFE standards would divert resources from 
these efforts. Raising CAFE standards to levels that effectively squash 
the American auto industry is not the only solution. Senators Bond and 
Levin have an alternative that is reasonable and fair. It brings 
together two common goals of Increasing fuel efficiency and protecting 
jobs and the American economy.
  The Bond-Levin amendment directs the Department of Transportation to 
increase CAFE standards for cars and light duty trucks based on several 
factors. These include the desirability of reducing our dependence on 
foreign oil; the effect on U.S. employment; impacts on motor vehicle 
safety; cost and lead time required for introduction of new 
technologies; and the effects of increased fuel economy on air quality.
  It also directs the Department of Transportation to complete two 
rulemakings. First, they must complete a rulemaking within 30 months to 
increase standards for passenger cars. Second, they must complete a 
rulemaking to increase standards for light trucks no later than April 
2006. This will go into effect for model year 2008. Each rulemaking is 
to be given on a muliti-year basis, but cannot exceed 15 model years. 
This amendment also directs Congress to take action on CAFE should the 
DOT not take action in the required timeframe.
  This bi-partisan amendment also includes expanded research and 
development into the production of hybrid electric vehicles and to 
improve diesel combustion. It authorizes $50 million per year over the 
next three years to conduct the hybrid electric technology research, 
and $75 million per year over the next three years for advanced 
combustion engine research and development.
  Finally, the Bond-Levin amendment requires the Federal Government to 
purchase advanced technology vehicles, beginning in 2005. Hybrid 
vehicles must be purchased or leased for light duty truck fleets and 
alternative fuel vehicles must be purchased or leased for passenger car 
fleets.
  We can have both energy conservation and job conservation. But it 
cannot be done by changing a number. It will take innovative solutions, 
improved technology, and the setting of realistic, achievable goals. 
The Bond-Levin amendment accomplishes these goals.
  I urge my colleagues to join me in supporting the Bond-Levin 
amendment.
  Thank you.
  Mr. DOMENICI. Mr. President, parliamentary inquiry: I just returned, 
and I apologize. Where are we now? As I understand it, some time was 
used on a matter other than this bill charged to other matters. How 
much time is left now, and who has the time?
  The PRESIDING OFFICER. The Senator from New Jersey has 4 minutes 
remaining. The Senator from Illinois has 15 minutes. The junior Senator 
from New Mexico has 5 minutes. The senior Senator has 5 minutes. The 
Senator from Mississippi has 1\1/2\ minutes.
  Mr. DOMENICI. I note the distinguished minority whip is here.
  The PRESIDING OFFICER. Does the Senator from New Jersey yield his 
time?
  Mr. REID. No. He is not yielding back his time.
  Mr. DOMENICI. He did. Yes.
  Mr. LAUTENBERG. I am reserving the rest of my time.
  Mr. REID. Mr. President, now that the manager of the bill is here, I 
renew a unanimous consent request that I made a short time ago. I ask 
unanimous consent that the Feinstein CAFE amendment be the next 
Democratic amendment in order. In addition to the unanimous consent 
request, I know the Republican manager has first right of recognition, 
but there is going to come a time when we offer our next amendment. I 
am alerting everyone that it will be the Feinstein CAFE amendment.
  Mr. DOMENICI. We object to granting you that privilege at this point. 
We understand the time will come, but it isn't certain that she will 
have the next amendment. That is the point.
  Mr. REID. Mr. President, I have the floor.
  The PRESIDING OFFICER. The Senator does not have time under the 
agreement.
  Mr. REID. I ask unanimous consent to have the Lautenberg time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, all day we have heard that we are slow-
walking this bill. In an effort to help manage what goes on here, we 
have asked the Senator from California who has a CAFE amendment to be 
the next in order. We have 382 amendments. We have about half of them 
over here. Any one of the Senators can call up any one of their 
amendments. I think it would be in the best interest of the Senate if 
we have an orderly process for offering these amendments. This does not 
disadvantage the majority in any way. We have done what we can to help 
move this bill forward. Senator Feinstein spoke. She came over to offer 
this amendment and couldn't do it.
  Mr. DOMENICI. We have no objection. I misunderstood. I apologize. If 
you want the Record to reflect that the next Democratic amendment will 
be Senator Feinstein's amendment on CAFE, we have no objection.
  Mr. REID. Mr. President, so there is no misunderstanding. I ask 
unanimous consent--this is for the Democratic Senators--that next 
Democratic amendment that we offer, whenever that might be, will be the 
Feinstein CAFE amendment.
  Mr. DOMENICI. That is correct; whenever you do.
  Mr. REID. That is right.
  Mr. DOMENICI. So you don't have any misunderstanding either, we will 
be finished with the debate and, as we understand it, we will then 
vote.
  Mr. REID. We will vote. Following that vote we have two amendments to 
dispose of--another Durbin amendment which may work out very easily, 
and the second is the Campbell amendment. Following that, we have been 
advised on several occasions that the majority who has first right of 
recognition wants to offer the new electricity section.
  Mr. DOMENICI. That is correct.
  Mr. REID. That is fine. Whenever we offer our next amendment, Senator 
Feinstein will offer her amendment on CAFE.
  Mr. DOMENICI. We want to accommodate. If there was any 
misunderstanding, it perhaps was on my part. I have no objection.
  I yield the floor and suggest the absence of a quorum, and I ask 
unanimous consent that the time be charged equally to the remaining 
three Senators.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BINGAMAN. Mr. President, how much time remains for me to discuss 
the Levin-Bond amendment and the Durbin amendment under the unanimous 
consent agreement?
  The PRESIDING OFFICER. The Senator has 4 minutes remaining.
  Mr. BINGAMAN. Mr. President, let me speak for that 4 minutes to 
indicate my opposition to the Levin-Bond amendment. As I see that 
amendment, by adopting it, we would do two things. First, we would be 
erecting new barriers to the development of meaningful fuel economy 
standards. Secondly, we would be effectively walking away from an 
opportunity to do something right about decreasing our growing oil 
consumption. In both cases, we would be making a mistake.
  The Bond-Levin amendment establishes additional criteria that would 
impose unnecessary hurdles to any significant increase in fuel 
efficiency standards. There are multiple new factors such as the effect 
of CAFE standards on the relative competitiveness of manufacturers and 
levels of U.S. employment. Those kinds of criteria are being added to 
the current rulemaking process. In my view, adding those kinds

[[Page 20028]]

of criteria will only cause the courts to revisit the careful balance 
that is already struck in the present statute.
  NHTSA already considers in-depth evaluations of the impact of a 
standard on safety, on the environment, and on American jobs. And the 
Levin-Bond amendment complicates the agency's task by providing a 
lengthy list of 13 items which, in my view, are unnecessary and 
deliberately vague new statutory provisions that have to be considered.
  This is not progress. We need to be honest with the American people 
and ourselves and recognize that if Alan Greenspan cannot even tell us 
the effect of a small drop in interest rates on the economy in the near 
future--as it is clear that he cannot and has not been able to, and he 
readily admits has not been able to--how can we expect the National 
Highway Transportation Safety Administration to possibly determine with 
accuracy the effect of any change in CAFE standards on employment 
levels or on relative competitiveness?
  Passenger vehicles today already use more petroleum than is currently 
produced in the United States. The Energy Information Agency projects 
consumption to increase an additional 2 million barrels per day before 
the end of this decade. Consumer preference has switched to light 
trucks and sport utility vehicles in recent years, and this has caused 
the average fuel economy in the U.S. passenger fleet to actually drop 
rather than improve. We are going backward with regard to fuel 
efficiency in vehicles.
  Today, we have the lowest fuel efficiency we have had since the early 
1980s in our entire fleet of vehicles. A decision not to increase CAFE 
standards significantly is a decision to become more and more dependent 
on foreign energy sources.
  I just returned from a meeting in the White House, where the 
President met with many of us, including my colleague from New Mexico, 
myself, the majority leader, the Democratic leader, and all of us were 
talking about how important it is that we move ahead with progressive 
energy legislation, and that we do so in order to reduce our dependence 
on foreign oil. The biggest factor causing an increased dependence on 
foreign oil is the increase in the use of oil and gasoline in motor 
vehicles. Instead of increasing the efficiency with which we reduce the 
efficiency of our motor vehicles, we are moving in just the opposite 
direction.
  Despite what automakers are saying, new engines, transmission, and 
hybrid technologies are now available to give automakers the means to 
increase gas mileage over the next 10 years without reducing either 
vehicle size or weight. Mr. President, we drove to the White House a 
few minutes ago in a new Honda Civic that is a hybrid. The average 
miles per gallon of that vehicle is between 45 and 50 miles.
  It is very unfortunate, in my view, that the only hybrid vehicles 
available to a U.S. consumer today are Japanese vehicles. They are the 
hybrid that is produced by Honda and the hybrid produced by Toyota.
  I see that my time is up. I urge my colleagues to oppose the Levin-
Bond amendment. I do support Senator Durbin's amendment. I hope we can 
adopt that amendment and make some significant progress toward 
increasing vehicle fuel efficiency.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, would you tell me how much time there is 
before the votes on the Durbin and Bond-Levin amendments?
  The PRESIDING OFFICER. The Senator from Illinois has 12 minutes; the 
Senator from New Jersey has 1 minute 40 seconds; the Senator from New 
Mexico has 3 minutes 45 seconds; the Senator from Mississippi has 1 
minute 8 seconds.
  Mr. REID. Will the Senator yield?
  Mr. DURBIN. Not on my time.
  Mr. REID. This will be off of Senator Lautenberg's time. The Senator 
from Missouri, Mr. Bond, has asked that the proponents of these 
amendments have some time to speak before the votes take place. Senator 
Durbin should be able to speak last, which is normal; it is his 
amendment. I want to make sure everybody has ample time to speak. The 
Senator from Missouri said he wants 2 or 3 minutes. Is that OK if 
Senator Bond has 2 minutes?
  Mr. DOMENICI. That is fine. I was going to make sure he got it by 
giving him some of mine. I appreciate that very much. It is hard to say 
who should speak last because the first amendment to be voted on is 
Senator Bond's amendment. Maybe he should be speaking last. If that is 
the way we are going to do it----
  Mr. BOND. Mr. President, to clarify, is there time after the vote on 
the Durbin amendment for debate on the Bond-Levin amendment?
  Mr. REID. The Senator said you are going to be first.
  Mr. BOND. Is there time for debate after that on the Bond-Levin 
amendment?
  Mr. REID. Mr. President, I ask unanimous consent that there be 4 
minutes equally divided.
  Mr. DURBIN. Mr. President, what is the regular order of the votes on 
the amendments?
  The PRESIDING OFFICER. The vote will occur first on the Durbin 
amendment, followed by the Bond amendment.
  Mr. DURBIN. If I understand the unanimous consent request by the 
Senator from Nevada, there will be 4 minutes before the vote on the 
amendment of the Senator from Missouri.
  Mr. REID. I modify my request to that effect.
  Mr. BOND. There will be time allotted for those of us on the other 
side prior to the Durbin amendment--who has the last minutes on that, I 
ask the managers?
  Mr. DOMENICI. Well, look, Senator Durbin has 15 minutes. We don't 
need to give him any more time. He can save 2 of that for just before 
the vote. We need to save Senator Bond 2 minutes. We need to give 
Senator Bond 2 minutes to speak in opposition. Senator Durbin doesn't 
need any additional minutes beyond the 15.
  Mr. DURBIN. I probably have all I need.
  Mr. DOMENICI. I thought you had been speaking all afternoon--but it 
is eloquent.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. DURBIN. Mr. President, please alert me when I have 3 minutes 
remaining.
  The PRESIDING OFFICER. The Chair will do so.
  Mr. DURBIN. Mr. President, before us is the most important single 
amendment on the question of energy security of the United States. That 
is quite a bold assertion but I stand by that because we understand how 
dependent we are on foreign oil. We understand that as long as the cars 
and trucks that we use in America are not fuel efficient, we will 
continue to have this dependence on foreign oil. So if we want to 
secure the Nation from an energy point of view, we have to show 
leadership on the floor of the Senate. We did that in 1975; 28 years 
ago, we established standards that said to those producing cars for 
sale in America: You are not doing a good enough job. Fourteen miles a 
gallon is unacceptable. You have to do better and we will give you 10 
years to improve that. And they did.
  At the end of 10 years, 27 and a half miles per gallon was the 
average fleet economy average across America. It was done because this 
Congress had the will. This Congress stood up to the special interest 
groups and said it is more important for the energy future of America 
and for families and businesses for us to have fuel efficiency. Look 
what we got for it: safe, fuel-efficient vehicles by 1985--double the 
fuel efficiency of just 10 years before.
  Now I come to the floor and say, why haven't we done anything since 
1985? Eighteen years of inaction. Isn't it time for us to show 
leadership again? You would think I was proposing the end of the 
automobile industry in America. Listen to the arguments we hear from 
the other side. A Senator came on the floor today and said: If Durbin 
has his way, we are all going to be driving golf carts.
  Get real. The technology is there. Don't take my word for it. I am a 
liberal arts lawyer. What do I know about engineering?

[[Page 20029]]

  In 2001, the National Research Council came out with a report 
specifying all the technologies currently available that could increase 
fuel efficiency in cars and trucks. Why aren't they being put on those 
vehicles? Because Detroit doesn't have the will to do it. And because 
they don't, we continue to be sold heavier, more cumbersome, and, in 
many respects, more dangerous vehicles, with even worse fuel economy; 
we continue to import oil from overseas and be dependent on the Middle 
East; we continue to burn that oil, polluting the environment, creating 
greenhouse gases, resulting in public health problems and a degradation 
of the environment and, frankly, endangering species on Earth that 
could live, because they are God's creation, but will be destroyed 
because we are ignoring our responsibility today.
  There are those who said: We cannot do this. We must understand that 
when it comes to this technology war between the United States and 
other countries, those who oppose this amendment say: Don't you 
understand, Senator Durbin, we are not up to this fight; we cannot win 
this fight; we have to find a way to avoid this battle. And I will say 
to them: That is not my point of view. I believe America can compete. 
We have proven it in the past. We proved it in 1975.
  These people who are so afraid that we will be forced to put a more 
fuel efficient car on the road that is also safe have told us it is 
impossible, and leading that chorus is none other than the big three in 
Detroit, once again falling behind when it comes to a global challenge 
to do the right thing. That is sad.
  For those of us who want to encourage American automobile 
manufacture, for those of us who want to stand behind those workers, I 
ask them the simple question: Why are they afraid to lead? Why are they 
afraid of a challenge to their creativity, to their innovation, to 
their leadership? Why must we always take second place when it comes to 
automobile technology? I think America is capable of much more. But 
those doubters, those who do not believe America is up to the 
challenge, say: Defeat the Durbin amendment. If you establish a 
standard of 40 miles a gallon, America is throwing in the towel; we are 
giving up; no way we can compete on that kind of a standard.
  They also say--and this is the saddest part of their argument--we 
also know foreign countries can compete and will compete successfully 
against us. What a sad commentary on American industry for the critics 
of this amendment to come up with that argument. I do not stand by it. 
I think if we show our leadership, they will show theirs. They did it 
in 1975; they can do it again today.
  There is an old story--and it is probably anecdotal--that after we 
passed the CAFE standards in 1975 and said we wanted better fuel 
efficiency in our cars, in Japan they got the message of the passage of 
this new law and they said: Go out and hire an army of engineers; we 
have to be ready to compete. When they got the news of the passage of 
this new law in Detroit, they called all their leaders together and 
said: Go out and hire an army of lawyers to fight this law. That is 
sadly reflective of the mentality that comes to the floor today.
  Instead of saying American industry can do better, that American 
families can expect more, that the next generation will have more safe 
and fuel-efficient cars, the opponents of this amendment say it is 
impossible, it cannot be done, and it can only be achieved at the 
expense of the American automobile industry.
  That is a sad commentary. Frankly, it is one we should reject. I say 
to my colleagues in the Senate: If this Energy bill that involves so 
much work by so many people, S. 14, is to have any value, aren't we 
going to address the most important single use of energy by American 
families and businesses today--our transportation sector and its 
utilization of the imports of oil? If we do not do that, this bill is 
just window dressing. It is nice.
  There are some aspects of the bill I actually like, but it does not 
get to the heart of the issue. It fears the heart of the issue because 
there are people who are afraid of it, and I think they are just plain 
wrong.
  Let me mention a couple of other arguments brought up by my 
opponents. They said the Durbin amendment achieving 40 miles a gallon 
by 2015 is too fast and too furious. I remind them, the Durbin 
amendment is an increase of less than 1 mile per gallon per year for 
the first 6 years. That is hardly fast and furious.
  They say my amendment is going to terminate jobs, safety, and 
consumer choice. The same weak arguments were made in 1975, and they 
should be rejected today as they were in 1975.
  They say my CAFE levels are arbitrary. Listen, we use a standard, not 
political argument. The National Academy of Sciences already identified 
the technologies that can be put in cars and trucks effectively. They 
also say the Bond-Levin amendment is a great leap forward, but it is a 
great leap forward for litigation.
  The Bond-Levin amendment is not an invitation to innovation; it is an 
invitation to litigation. Let me tell my colleagues why I say that. 
They establish the standards by which we can improve fuel efficiency in 
America through the National Highway Traffic Safety Administration. On 
one side of this chart are the existing standards. There are a handful 
of them. The opponents of my amendment decided to add all of these 
items to the standards that have to be followed by NHTSA before they 
can improve fuel economy.
  What does this mean? It means that if they ever muster the courage to 
say we can have more fuel efficient vehicles, they will be challenged 
in court on each and every one of these elements. They will be tied up 
in court for years. That is exactly what the opponents of the Durbin 
amendment want. They do not want to see more fuel efficiency. They want 
this delayed indefinitely. And that delay means more dependence on 
foreign oil. It means more pollution. It means less energy security for 
America.
  To come up with all of these new categories that have to be met is 
just a guarantee that, in our lifetime, we will never see a change. For 
18 years we have not. NHTSA, left on its own for the last 18 years, has 
nominally improved MPG, miles per gallon, in America by 1.5 miles per 
gallon--in 18 years. How long will it take us to reach 32 miles a 
gallon by that standard? We would not see it this century. That is how 
slow they are today.
  In comes the Bond-Levin amendment and it says: Let's throw some other 
categories in here and obstacles to increasing fuel efficiency.
  The American people get this. American businesses do, too. They 
understand that more fuel efficient vehicles are going to make a more 
productive economy, make certain that America is more competitive, make 
certain there are more and good paying jobs. We are not going to throw 
in the towel. With the Durbin amendment, we accept the challenge that 
we can keep our love affair with the automobile alive but do it in a 
responsible way. It is the kind of situation our Nation has responded 
to time and again, and I think we should today.
  The PRESIDING OFFICER. The Senator has 3 minutes remaining.
  The Senator from Missouri.
  Mr. BOND. Mr. President, obviously, I do not have the time the 
Senator from Illinois has, but I do want to point out that the National 
Academy of Sciences says:

       The committee cannot emphasize strongly enough that cost 
     efficient fuel economy levels are not recommended CAFE goals.

  The National Academy of Sciences also said that when the politically 
driven fuel economy numbers were imposed in the seventies and eighties, 
somewhere roughly approximating 2,000 deaths a year occurred on the 
highways due to smaller cars. Talk about the production of automobiles 
in auto-related industries in Missouri and Illinois, even in New 
Mexico: 21,000 in New Mexico; 16,000 in Rhode Island; 221,000 in 
Missouri; 331,000 jobs in Illinois.
  I previously submitted for the Record a letter from the United Auto 
Workers saying it would endanger the jobs of their members.

[[Page 20030]]

  Furthermore, we also know it does not relate to consumer choice. 
Thirty cars on the road today get more than 30 miles per gallon, and 
they represent only 2 percent of the sales. Consumers do not want them. 
Unless we have to tell people what they have to drive, we are not going 
to get them to drive around in these cars unless and until we get the 
technology to produce more fuel efficient cars.
  We have seen NHTSA, the National Highway Traffic Safety 
Administration, make the most significant increase in fuel economy with 
their light truck standards which are going into effect. We mandate in 
the Bond-Levin amendment that the maximum feasible technology be 
utilized to increase standards in the future.
  Let's get real. Let's talk about what is technologically feasible, 
what will continue jobs, get better fuel economy, not risk the lives of 
the drivers on the road and their families, and also not throw out of 
work the very wonderful American men and women who are making these 
automobiles in my State and others.
  I urge my colleagues to reject the Durbin amendment and support the 
Bond-Levin amendment.
  The PRESIDING OFFICER. Who yields time?
  The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I have how many minutes?
  The PRESIDING OFFICER. Two minutes 53 seconds.
  Mr. DOMENICI. Mr. President, I will try to do it in that period of 
time. I ask unanimous consent for 3 minutes instead of the 2 minutes 
and something.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. Reserving the right to object, the Senator from New Mexico, 
the manager of this bill, can have whatever time he wants.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, I think I am going to do it in 2 minutes 
and whatever few seconds.
  First, I have been looking forward to this debate all day because it 
is a very mature debate. The Senate spent a good deal of time last year 
discussing these two amendments, as well as others. The Feinstein 
amendment we agreed to and that we will be talking about, I think we 
discussed it heretofore also, but in any event, a lot of time has been 
spent discussing these amendments.
  In addition to these amendments, I remind Senators that we have 
already adopted an amendment, that came as quite a surprise, by Senator 
Landrieu that would require the President to develop a plan to reduce 
domestic petroleum consumption by 1 million barrels a day by 2013. 
Since major reductions in oil consumption are most likely going to be 
achieved through reductions in the use of transport fuels, the 
President, as a result of the Landrieu amendment, will probably have to 
focus on measures to increase fuel economy.
  I suggest to Senators that the Landrieu amendment may obviate the 
need for further debate. Nonetheless, we are debating and we will 
continue to debate. It seems to me the Landrieu amendment gives the 
President the kind of authority and flexibility needed in this country 
if, in fact, this issue is as important as it is being alluded to.
  Keeping that in mind, if the Senate must choose among the offered 
CAFE amendments, I must lend my support to the amendment offered by 
Senator Bond and Senator Levin. Under Bond-Levin, standards will be 
based upon sound science and solid technical advice. Their amendment 
mandates that NHTSA experts set a new CAFE number considering jobs, 
safety, technology, and other key factors.
  The Bond-Levin amendment passed overwhelmingly last year. I do not 
think much has changed. As a matter of fact, we are a little bit more 
secure in terms of energy now. We are still using a lot, maybe more, 
but the world is a little more secure in terms of oil dependence. The 
amendment they have offered is what I would call a commonsense 
amendment. It would not adversely affect employment, safety, or 
consumer choice, but it would do the job.
  Incidentally, the amendment is supported by the United Auto Workers, 
the National Chamber of Commerce, the AFL-CIO, the Association of 
Manufacturers, the Farm Bureau of America, and over 30 additional 
associations.
  When combined with the considerable tax incentives for advanced 
vehicle technology in the Finance Committee package, the Bond-Levin 
amendment offers a sensible way to achieve fuel efficiency gains and to 
reduce our dependence on foreign oil. It does so in a way that would 
not hurt the United States economy, increase vehicle cost to consumers, 
and cost American jobs or endanger lives.
  I understand the distinguished Senator from Illinois has about 3 
minutes, after which time we will start a vote.
  The PRESIDING OFFICER (Mr. Coleman). The Senator from Illinois.
  Mr. DURBIN. Mr. President, I understand I have 3 minutes to close the 
debate, is that right?
  The PRESIDING OFFICER. Two minutes and 45 seconds.
  Mr. DURBIN. I ask unanimous consent that a list of organizations 
supporting the Durbin amendment, as well as a letter from Mr. Chuck 
Frank of Z. Frank, the world's largest Chevrolet dealer, who supports 
my amendment, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             National Support for the Durbin CAFE Amendment

       Cosponsors: Nelson (FL), Jeffords, Reed (RI), Reid (NV), 
     Kennedy, Boxer, Lautenberg.
       Supporting Organizations: Sierra Club, Union of Concerned 
     Scientists, Natural Resources Defense Council, U.S. PIRG, 
     National Environmental Trust, Friends of the Earth, Public 
     Citizen, The Wilderness Society, Citizen Action Illinois.
       Coalition on the Environment and Jewish Life, National 
     Council of Churches, Hadassah, the Women's Zionist 
     Organization of America, American Jewish Committee, Jewish 
     Council for Public Affairs, Union of American Hebrew 
     Congregations, Central Conference of American Rabbis, MoveOn, 
     Chesapeake Climate Action Network.
                                  ____

                                                    July 24, 2003.
     Hon. Richard Durbin,
     U.S. Senate,
     Washington, DC.
       Dear Senator Durbin: I am writing in support of raising 
     fuel economy standards. I am the President of ``Z'' Frank 
     Chevrolet. I've sold well over 1,000,000 vehicles. My family 
     has been selling and leasing cars and trucks in Chicago since 
     1936. Before entering the family business in 1976, I 
     graduated from George Washington University and then the 
     University of Chicago Graduate School of Business. I have 
     been a Chevrolet dealer since 1982 and since then have also 
     held franchises from Oldsmobile, Hyundai, Mazda, Subaru and 
     Volkswagen.
       I know the car business, and I know that car companies can, 
     and must, do better for the sake of our country.
       I call on you to support the three CAFE related amendments 
     that are expected to be offered--the Durbin amendment, the 
     Kerry/McCain amendment and the Feinstein/Snowe amendment.
       I support these amendments because I know that cars, SUVs 
     and other light trucks consume 8 million barrels of oil every 
     day and account for 20 percent of U.S. global warming 
     emissions. At a time when energy security is a national 
     priority, raising fuel economy standards will cut the 
     country's dangerous dependence on oil, curb global warming, 
     and save consumers money at the gas pump. Raising fuel 
     economy standards is the best way to manage our energy future 
     and encourage automakers to implement technologies that 
     already exist.
       How do I know that the auto companies can make vehicles 
     that go further on a gallon of gas? Because they're already 
     doing it with a small number of vehicles!
       Existing fuel-saving technologies like more efficient 
     engines, smarter transmissions, and sleeker aerodynamics are 
     being put in some vehicles, but they could be in all. Already 
     this year, we have seen a host of announcements showing that 
     all kinds of vehicles can get better fuel economy using 
     existing technology. For instance:
       General Motors announced that it will be putting 
     Displacement on Demand technology in 100,000 Chevy 
     Trailblazers and GMC Envoys, helping improve the fuel economy 
     of these large SUVs. Continuously Variable Transmissions are 
     also gaining in popularity.
       Hybrid-electric drivetrains are also becoming available in 
     a range of vehicles. At this year's Detroit Auto Show, Ford, 
     General Motors, and Toyota all announced that they will have 
     hybrid gasoline-electric SUVs on the road within two years 
     that will get close to 40 miles per gallon.
       Toyota already has a hybrid gasoline-electric car on the 
     road, the Prius, and plans on

[[Page 20031]]

     having SUVs and more hybrid cars as well. The Chevrolet 
     Malibu will have a hybrid version by 2005.
       J.D. Power and Associates has forecasted that sales of 
     hybrid-electric vehicles will reach 500,000 within five 
     years.
       It is not easy for me to be at odds with the manufacturer I 
     represent. Selling Chevrolets has been very financially 
     beneficial for me and my family. But the fact is, they can 
     and must do better. They can build cars, trucks and SUVs that 
     are safe, affordable, and exciting to drive, while still 
     going further on a gallon of gas. It's in the best interest 
     of our country to raise the fuel economy standards of our 
     cars and light trucks. Please feel free to share this letter 
     with others. I hope it helps.
           Sincerely,
                                                 Charles E. Frank,
                                 President, ``Z'' Frank Chevrolet.

  Mr. DURBIN. Mr. President, when one lists all of the groups that 
oppose this, on business and labor, frankly, we would have found the 
same opposition in 1975. Those are the same groups that were arguing it 
is physically impossible for us to have more fuel-efficient cars. If 
they would have had their way, we would still all be driving cars at 14 
miles a gallon or worse.
  This Congress rejected those same groups and their positions 28 years 
ago, but we have not done a thing since. As a result, the fuel 
efficiency of our cars and trucks has gone down. Is that in the best 
interest of America? Is that as good as Congress can do, to abdicate 
our leadership and responsibility on something this essential?
  I look at these automobile manufacturers--many of them are my friends 
and I have worked with them. Certainly, United Auto Workers has been 
one of my strongest supporting organizations since I have been involved 
in politics, but I just disagree with them. I believe America can do 
better. I think if we challenge American business and labor to work 
together for more fuel-efficient vehicles, they can rise to the 
challenge. But if we throw in the towel, as the Bond-Levin amendment 
does, then we know what is going to happen. We are going to continue to 
see this situation get worse.
  The Senator from New Mexico talks about the Landrieu amendment, and I 
voted for it because it was a wonderful little message to include in 
this bill, but it does not have any teeth. It has no enforcement. What 
it basically says to the President is we hope he will see the light, we 
hope he will lead the way, and if he does, we would sure like to help 
him.
  If that is the case, if that is all Congress is about, why do we have 
this bill? Why do we not say to the President of the United States, why 
doesn't he take care of the energy needs of America, and if he needs 
us, call us? Well, we do not say that. We say we accept our part of the 
responsibility to pass reasonable laws based on sound science to make 
America more energy secure.
  I say to my colleagues, if we have an energy bill that does not 
address the fuel efficiency of vehicles, we have ignored the most 
important energy and environmental issue that should be debated under 
this bill. The special interests will have won the day again, as they 
failed in 1975, and as a result we will continue to see dependence on 
foreign oil, more air pollution, and less energy security for America.
  That is not what we should promise to further generations, and I urge 
my colleagues to support my amendment.
  The PRESIDING OFFICER. All time has expired. The question is on 
agreeing to amendment No. 1384.
  The Senator from New Mexico.
  Mr. DOMENICI. Have the yeas and nays been ordered?
  The PRESIDING OFFICER. They have not.
  Mr. DOMENICI. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, we are going to vote on this amendment, 
and then immediately following that, the next amendment will be the 
Bond-Levin amendment, which will be preceded by 2 minutes of debate on 
the part of Senator Durbin in opposition and Senator Bond in favor. So 
Senators should know we have one vote, with 4 minutes of debate 
followed by another vote. I ask unanimous consent that the second vote 
be a 10-minute vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The question is on agreeing to amendment No. 1384.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from Florida (Mr. Graham), the 
Senator from Massachusetts (Mr. Kerry), and the Senator from 
Connecticut (Mr. Lieberman) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``yea''.
  The PRESIDING OFFICER (Mrs. Dole). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 32, nays 65, as follows:

                      [Rollcall Vote No. 309 Leg.]

                                YEAS--32

     Akaka
     Bingaman
     Boxer
     Cantwell
     Carper
     Chafee
     Clinton
     Collins
     Corzine
     Daschle
     Dayton
     Dodd
     Durbin
     Edwards
     Feinstein
     Gregg
     Harkin
     Hollings
     Inouye
     Jeffords
     Kennedy
     Lautenberg
     Leahy
     Murray
     Nelson (FL)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Wyden

                                NAYS--65

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

                             NOT VOTING--3

     Graham (FL)
     Kerry
     Lieberman
  The amendment (No. 1384) was rejected.
  Mr. DOMENICI. Madam President, I move to reconsider the vote.
  Mr. CRAIG. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


               Amendment No. 1386 As Amended and Modified

  Mr. DOMENICI. Madam President, fellow Senators, if you will not 
leave, we will vote again very shortly. There are 4 minutes with 2 
minutes on each side, and then we will vote on the Bond-Levin 
amendment. The Senator from Illinois has the first 2 minutes and 
Senator Bond wraps it up. Then we will vote.
  The PRESIDING OFFICER. Who yields time?
  Mr. DURBIN. Madam President, under the unanimous consent agreement, I 
have 2 minutes to speak in opposition to this amendment.
  I understand some of my colleagues have offered this amendment in 
good faith in an effort to address the issue. The amendment which was 
just defeated addressed the issue. It would have increased fuel 
efficiency of cars. This Bond-Levin amendment establishes additional 
criteria for the National Highway Traffic Safety Administration to meet 
before they recommend and implement any increase in fuel efficiency.
  What does this mean? Here are the existing standards that have to be 
met with the passage of this amendment. We add all of these new 
standards that have to be met. There are more hurdles to be cleared. It 
is an invitation for litigation because as the rules are announced 
those who oppose them will be able to step forward and say: you didn't 
meet this Bond-Levin criteria or you didn't meet this one. It just 
means further delay.
  We know what NHTSA has done on its own. It has increased fuel 
efficiency by 1.5 miles per gallon in a span of 18 years. This is false 
hope. This is a figleaf for those who just voted no and

[[Page 20032]]

say they want to vote yes. I encourage my colleagues to oppose this 
amendment.
  Mr. BOND. Madam President, I yield to the Senator from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Mr. LEVIN. Madam President, our amendment will increase full 
efficiency but in positive ways by giving incentives to purchase 
vehicles, by having the Government buy the vehicles which are leaps 
ahead in technology, and by having the Government be more involved in 
joint research and development. By the way, we don't add criteria which 
must be met. We add criteria which we want the Department of 
Transportation to consider.
  Is there anyone who doesn't want the Department of Transportation to 
consider--consider--technological feasibility or safety or economic 
practicability or the effect on jobs?
  These are not hurdles which must be jumped. These are simply relevant 
facts which we want NHTSA to consider. For the life of me, I cannot 
understand why all of us would not want NHTSA to consider those 
relevant facts.
  Mr. BOND. Madam President, I ask unanimous consent that Senators 
Bunning, Voinovich, and Nickles be added as cosponsors.
  I thank my colleagues for a very strong vote. With the Senator from 
Michigan and other cosponsors, we ask for your support of this measure.
  As I indicated in my earlier remarks, there is strong support by the 
United Auto Workers which believes, as I do, and which I hope a vast 
majority of this body does, that we can move forward to make progress 
that is economically feasible to assure better fuel economy while not 
sacrificing safety and not sacrificing jobs but making it clear that we 
are going to use the technology to build on the most significant 
advance in fuel economy in 20 years that the National Highway Traffic 
Safety Administration has just promulgated for light trucks.
  Let us continue to move forward with CAFE based on sound science and 
not political numbers. I urge my colleagues to support the Bond-Levin 
amendment.
  The PRESIDING OFFICER. The time of the Senator from Missouri has 
expired.
  Mr. DOMENICI. 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 amendment. The clerk will call the 
roll.
  The legislative clerk called the roll.
  Mr. REID. I announce that the Senator from North Carolina (Mr. 
Edwards), the Senator from Florida (Mr. Graham), the Senator from 
Massachusetts (Mr. Kerry), and the Senator from Connecticut (Mr. 
Leberman) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``nay''.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 66, nays 30, as follows:

                      [Rollcall Vote No. 310 Leg.]

                                YEAS--66

     Alexander
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Carper
     Chambliss
     Clinton
     Cochran
     Coleman
     Conrad
     Cornyn
     Craig
     Crapo
     Dayton
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Ensign
     Enzi
     Feingold
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Hagel
     Hatch
     Hutchison
     Inhofe
     Johnson
     Kohl
     Landrieu
     Levin
     Lincoln
     Lott
     Lugar
     McConnell
     Mikulski
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Pryor
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Specter
     Stabenow
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner

                                NAYS--30

     Akaka
     Biden
     Bingaman
     Boxer
     Cantwell
     Chafee
     Collins
     Corzine
     Daschle
     Durbin
     Feinstein
     Gregg
     Harkin
     Hollings
     Inouye
     Jeffords
     Kennedy
     Kyl
     Lautenberg
     Leahy
     McCain
     Murray
     Nelson (FL)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Wyden

                             NOT VOTING--4

     Edwards
     Graham (FL)
     Kerry
     Lieberman
  The amendment (No. 1386), as modified and amended, was agreed to.
  Mr. DOMENICI. Madam President, I move to reconsider the vote.
  Mr. CRAIG. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized.
  Mr. DOMENICI. Madam President, if I may have the attention of 
Senators, please, there are two amendments. One is a Durbin amendment, 
which Senator Durbin indicated when he sent it to the desk was sent up 
by mistake. It is a so-called Durbin No. 2 tax amendment. He said, 
then, that he would like to withdraw it.
  I ask unanimous consent that he be permitted to withdraw that 
amendment.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. Objection. Madam President, I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The Senator from New Mexico retains the floor.
  Mr. DOMENICI. Madam President, I move to table the Durbin amendment.
  Mr. REID. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll to ascertain the 
presence of a quorum.
  The legislative clerk proceeded to call the roll.
  Mr. DOMENICI. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The motion to table has been made.
  Mr. DOMENICI. Parliamentary inquiry: Is a motion to set aside the 
Durbin tax amendment the pending business?
  The PRESIDING OFFICER. The Senator has made a motion to table the 
Durbin amendment.
  Mr. DOMENICI. A motion to table.
  The PRESIDING OFFICER. That motion is not debatable.
  Mr. DOMENICI. Let's go.
  Mr. DASCHLE. Madam President, I ask unanimous consent that the motion 
be withdrawn.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. DOMENICI. That having been done, I move to set the amendment 
aside.
  The PRESIDING OFFICER. Is there objection?
  Mr. DOMENICI. The amendment is withdrawn?
  The PRESIDING OFFICER. The motion to table has been withdrawn.
  Mr. DOMENICI. The amendment is still pending. I move to set the 
amendment of Senator Durbin aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The PRESIDING OFFICER. The Senator from New Mexico has the floor.
  Mr. DOMENICI. I want to set both amendments aside so that I can 
proceed with another amendment. I ask unanimous consent that the Durbin 
amendment be set aside and that the Campbell amendment be set aside so 
that we may proceed with the electricity amendment.
  The PRESIDING OFFICER. Is there objection?
  Mr. DASCHLE. Reserving the right to object, and I will not object, 
but I publicly express my appreciation to the Senator from Washington, 
Ms. Cantwell, who has some very strong concerns that she hopes to 
express once we get on the electricity title. She has several 
amendments. I have asked the distinguished manager if it would be his 
intention to allow the Senator from Washington to offer some of these 
amendments tonight. It is my understanding--and he can confirm this--
that he is prepared to allow the Senator from Washington to offer these 
amendments tonight. I know that the distinguished ranking member, the

[[Page 20033]]

Senator from New Mexico, also has an amendment he is prepared to offer. 
So it is with that understanding that the ranking member and the 
Senator from Washington will have amendments, and that the Senator from 
Washington will be recognized to offer those amendments. We do not 
object now to moving to the electricity title and setting aside the 
amendments that have been pending.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. DOMENICI. I thank Senator Cantwell for her cooperation. First, I 
assure her that what we have just done in no way jeopardizes her rights 
to offer amendments. She has not only one but maybe a number of 
amendments she wants to offer to the so-called electricity provisions. 
That will be offered next, and clearly we are going to be on it until 
Senators have no more amendments. So we are going to be here long 
enough for the amendments of Senator Cantwell to be offered, whatever 
they are and however many there are.


                           Amendment No. 1412

  Mr. DOMENICI. I send the electricity amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from New Mexico [Mr. Domenici], for himself, 
     Ms. Landrieu, Mr. Thomas, Ms. Murkowski, Mr. Campbell, Mr. 
     Smith, Mr. Alexander, Mr. Kyl, Mr. Nelson of Nebraska, Mr. 
     Hagel, Mr. Talent, Mr. Bunning, and Mr. Coleman, proposes an 
     amendment numbered 1412.

  Mr. DOMENICI. Madam President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under ``Text 
of Amendments.'')
  Mr. DOMENICI. The electricity amendment pending at the desk has 13 
cosponsors. I thank the cosponsors, Senator Landrieu, Senator Thomas, 
Senator Murkowski, Senator Campbell, Senator Smith, Senator Alexander, 
Senator Kyl, Senator Nelson of Nebraska, Senator Hagel, Senator Talent, 
Senator Bunning, and Senator Coleman.
  I have a very brief statement, and I trust Senators will listen. It 
is to the point. We will be on this until there are no more amendments 
to offer to this title.
  Mr. DORGAN. Will the Senator from New Mexico yield for a question?
  Mr. DOMENICI. I will be pleased to yield.
  Mr. DORGAN. Madam President, I wanted to make the point and ask the 
question on the electricity title. The Senator from New Mexico 
indicated that all amendments would be available to be offered, and I 
appreciate that. This title, of course, is somewhat controversial.
  Mr. DOMENICI. Yes.
  Mr. DORGAN. The question of protection for consumers is very 
important. It is a very complicated title. I hope everyone in the 
Senate wants to plug the holes that existed with respect to some of the 
previous price manipulations that went on, on the west coast. My hope 
is that it is not just a case of allowing people to offer amendments 
but to have the staffs on both sides to actively work together so that 
we understand these provisions and actually plug the holes that exist 
that failed to protect consumers on the west coast in the last couple 
of years.
  I know that is what the Senator would like to have happen. I know we 
have people on this side who want that to happen. I hope we can work 
together to make sure we understand it and then fix it.
  Mr. DOMENICI. Madam President, I can guarantee Senators that the 
Senator from New Mexico has worked for the last 7 months on this bill. 
The electricity amendment is a compromise supported by a broad array of 
stakeholders, much broader than I ever would have thought when I 
assumed the chairmanship of this committee. I believe that, per se, 
assumes that this amendment plugs all the so-called loopholes so there 
will not be any Enron end runs.
  I repledge that I will work with any Senator who has an amendment 
that they think improves upon this bill. That does not mean, however, 
that every amendment that comes along, that says it makes this bill 
better, is going to be one that this Senator accepts. I do not want to 
return to the regulation of PUHCA as a way of protecting the consumers. 
Quite to the contrary. I believe its day has come. It has served its 
purpose.
  There are a number of letters of support for this electricity 
amendment which I am offering. Let me start with the administration. 
They say they support the substitute electricity amendment and believe 
it will effectively modernize our Nation's antiquated electricity laws.
  The National Rural Electric Cooperative Association:

       Supports passage of the carefully crafted Domenici 
     amendment without modification.

  The American Public Power Association:

       Strongly supports the compromise in its totality without 
     modification.

  The Large Public Power Council:

       Supports the electricity substitute without modification.

  Electric utility companies such as Mid-America, Allegheny, and Xcel, 
have offered their support for the Domenici electricity amendment, and 
I have now told my colleagues that it is supported by 13 Senators.
  Because it is bipartisan, we might call it the Domenici-Landrieu 
amendment. For those who claim we need a balanced energy policy, here 
is a balanced electric title with wide support that needs to be 
included in our final bill. Some would add changes to it, and we are 
willing to look at them, but those who understand the complexities of 
the issues known as the Domenici electricity amendment know it 
represents a fair common ground. That is why there is support for this 
amendment without modification.
  I know there will be a number of second-degree amendments, and I am 
willing to look at them. I have already said I am willing to look 
specifically at amendments from the distinguished Senator from 
Washington, Ms. Cantwell. I will look at them carefully. I understand 
the significance of the problem she confronts. I do not support any 
amendments yet, and obviously if they disturb the delicate and 
sometimes gentle balance in this bill, I will have to oppose them. I 
will look with genuine interest, with the best talent I have, at 
amendments that Senators have if they think they really address the 
issues that have beset this country over the past 25, 26 months in 
terms of natural gas, utility prices, and utility companies and their 
shenanigans, such as at Enron.
  The amendment is now pending. I am very proud of it, and I am pleased 
to be at this point. I thank the Chair for recognition, and I thank the 
Senate for paying attention. We are going to be open to amendments, and 
I understand my friend and colleague from New Mexico, Senator Bingaman, 
will probably have an amendment shortly.
  I yield the floor.
  The PRESIDING OFFICER. The junior Senator from New Mexico.


                Amendment No. 1413 to Amendment No. 1412

  Mr. BINGAMAN. Madam President, I send the amendment to the desk and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from New Mexico [Mr. Bingaman] proposes an 
     amendment numbered 1413.

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

  (Purpose: To strengthen the Federal Energy Regulatory Commission's 
              authority to review public utility mergers)

       On page 41, after line 17, strike all that follows through 
     page 43 line 10, and insert the following:

     SEC.   . ELECTRIC UTILITY MERGERS.

       Section 203(a) of the Federal Power Act (16 U.S.C. 824b) is 
     amended to read as follows:
       ``(a)(1) No public utility shall, without first having 
     secured an order of the Commission authorizing it to do so--

[[Page 20034]]

       ``(A) sell, lease, or otherwise dispose of the whole of its 
     facilities subject to the jurisdiction of the Commission, or 
     any part thereof of a value excess of $10,000,000,
       ``(B) merge or consolidate, directly or indirectly, such 
     facilities or any part thereof with the facilities of any 
     other person, by any means whatsoever,
       ``(C) purchase, acquire, or take any security of any other 
     public utility, or
       ``(D) purchase, lease, or otherwise acquire existing 
     facilities for the generation of electric energy unless such 
     facilities will be used exclusively for the sale of electric 
     energy at retail.
       ``(2) No holding company in a holding company system that 
     includes a transmitting utility or an electric utility 
     company shall purchase, acquire, or take any security of, or, 
     by any means whatsoever, directly or indirectly, merge or 
     consolidate with a transmitting utility, an electric utility 
     company, a gas utility company, or a holding company in a 
     holding company system that includes a transmitting utility, 
     an electric utility company, or a gas utility company, 
     without first having secured an order of the Commission 
     authorizing it to do so.
       ``(3) Upon application for such approval the Commission 
     shall give reasonable notice in writing to the Governor and 
     State commission of each of the States in which the physical 
     property affected, or any part thereof, is situated, and to 
     such other persons as it may deem advisable.
       ``(4) After notice and opportunity for hearing, 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 interests of consumers 
     of electric energy of any public utility that is a party to 
     the transaction or is an associate company of any party to 
     the transaction;
       ``(C) will not impair the ability of the Commission or any 
     State commission having jurisdiction over any public utility 
     that is a party to the transaction or an associate company of 
     any party to the transaction to protect the interests of 
     consumers or the public; and
       ``(D) will not lead to cross-subsidization of associate 
     companies or encumber any utility assets for the benefit of 
     an associate company.
       ``(5) The Commission shall, by rule, adopt procedures for 
     the expeditious consideration of applications for the 
     approval of dispositions, consolidations, or acquisitions 
     under this section. Such rules shall identify classes of 
     transactions, or specify criteria for transactions, that 
     normally meet the standards established in paragraph (4), and 
     shall require the Commission to grant or deny an application 
     for approval of a transaction of such type within 90 days 
     after the conclusion of the hearing or opportunity to comment 
     under paragraph (4). If the Commission does not act within 90 
     days, such application shall be deemed granted unless the 
     Commission finds that the proposed transaction does not meet 
     the standards of paragraph (4) and issues one or more orders 
     tolling the time for acting on the application for an 
     additional 90 days.
       ``(6) For purposes of this subsection, the terms `associate 
     company', `electric utility company', `gas utility company', 
     `holding company', and `holding company system' have the 
     meaning given those terms in section 1151 of the Energy 
     Policy Act of 2003.''.

  Mr. BINGAMAN. The amendment Senator Domenici has now offered is a 
substitute for the entire electricity title of the Energy bill. It 
purports to contain consumer protections in order to compensate for the 
fact that in this bill we are also proposing to repeal PUHCA. What is 
PUHCA? That is the Public Utility Holding Company Act.
  I have to agree the substitute amendment Senator Domenici has 
provided does contain some increase in the authority the Federal Energy 
Regulatory Commission will have to review mergers and dispositions; 
that is, some increase in the authority of FERC to review mergers and 
acquisitions compared to the previous bill. I also concluded the 
substitute does not do enough to solve the problem.
  The amendment I am offering contains the language we passed in last 
year's Senate Energy bill, language we believe fills this inadequacy, 
solves this problem in the underlying provision. Not only did the 
amendment pass the Senate last year, there was an amendment that would 
have removed this language. That amendment lost in the Senate by a vote 
of 67-29. Forty Senators voted for much stronger merger review 
authority than the provision contains.
  FERC's merger review authority is essential in this industry which 
has been based on a system of local and regional monopolies. It is 
essential that authority be vested in FERC. The industry we are talking 
about historically has been based on local and regional monopolies and 
is moving toward depending much more on a competitive wholesale market 
for electricity generation. The industry is highly concentrated. 
Consolidation of generation and distribution transmission can prevent 
the development of a genuinely competitive market.
  There are two big problems in the substitute provision Senator 
Domenici has provided with relation to merger and acquisition 
authority. Let me try to explain those.
  First, this proposal does not cover the generation of energy. 
Everyone understands there are various parts to the energy industry. 
There are generation companies involved in generation, there are those 
involved in transmission, those that are involved in distribution, and 
some that are involved in all. However, generation is not covered under 
this language.
  The second big problem is there are no real protections against 
cross-subsidies or encumbrance of assets owned by utilities. That 
raises a real prospect that people who pay utility bills will wind up 
subsidizing nonprofitable, unprofitable ventures that companies get 
into, particularly in the case where there are holding companies 
involved.
  Let me talk about each of these issues. The first key failure I have 
talked about in the Domenici substitute is it does not make generation 
acquisitions or dispositions jurisdictional under the law. That means 
it does not give FERC authority over those. There is no requirement 
anyone oversee it at the Federal level and sign off on it.
  For generation mergers, while it is true most activities in this area 
are divestiture of generation by vertically integrated utilities at 
this time, that may not always be the case. Utilities getting rid of 
generation do tend toward deconcentration of the market but not if they 
sell to large and growing generation companies. Instead of leading to 
less concentration, it can lead to more concentration, depending upon 
who is buying these generation facilities.
  Without the authority provided in my amendment, FERC, which is 
charged with making sure the competitive market produces just and 
reasonable rates, would have to stand by and watch while the industry 
reconcentrates rather than deconcentrates. A single company could 
acquire every generator in this country and FERC could do nothing about 
it under the Domenici substitute. This is not compatible with the 
development of a competitive market. Even when the transaction is only 
the sale of generation facilities, there are serious issues at stake.
  Many of the utilities in the headlines lately because they are either 
facing bankruptcy or have deep financial troubles have come as a result 
of the utility spinning off its generation to an affiliate who then 
gets into the unregulated electricity market. As a result, there are 
companies such as Xcel and Allegany that are experiencing serious 
financial distress because of the activities of their generation and 
marketing affiliates, but these affiliates are not under the 
jurisdiction of the FERC, so there will be no Federal oversight.
  The second failure in the Domenici substitute is it does not require 
the FERC to create real protection against cross-subsidy or against 
encumbrance of assets in the new merged company. My amendment 
strengthens the standards under which FERC reviews mergers. Our 
provision requires the transactions can be shown to do no harm, either 
to competition, to consumers, or to the capacity of regulators to 
regulate. Further, it requires that FERC determine there will not be 
any cross-subsidy of affiliate companies and there will not be any 
encumbrance of assets for the benefits of the affiliate. This is 
essential if we are going to protect ratepayers. We did not allow that 
cross-subsidy to exist. The underlying Domenici amendment does not 
require that of the Federal Regulatory Commission.
  Essentially, our provision requires that FERC create some way to 
determine the goals of the requirement be

[[Page 20035]]

met. Perhaps the only way to accomplish this is to create real 
corporate insulation between the utility affiliate of a holding company 
and its unregulated affiliates. That could be done by creating 
firewalls around the utility affiliate, by enacting rules about 
transactions between affiliates or in a combination of the two.
  The purposes behind the Public Utility Holding Company Act which we 
are ready to repeal as part of this overall Energy bill are to ensure 
consumers are not harmed by the complexity of corporate structure, that 
regulation not be made too difficult by that complexity, and that 
utility affiliates not be allowed to benefit from cross-subsidization 
or to cross-subsidize nonutility affiliates so that resources of the 
utility wind up being drained away from service to the customers. This 
is exactly what the bill requires FERC to do before approving a merger. 
That is what our amendment requires FERC to ensure before approving a 
merger.
  I have three charts that will try to make this clearer. This is 
complex. Frankly, one of the difficulties of trying to begin in the 
evening at 6 p.m. with this very difficult, complex subject, there is 
an awful lot of knowledge Senators need to have in order to vote 
intelligently on these issues. Let me try to go through it with the 
charts.
  The first chart is FERC jurisdiction at the present time. The Federal 
Energy Regulatory Commission, FERC, has jurisdiction over mergers of 
two different utilities. We are talking about, under the Federal Power 
Act, utilities that are vertically integrated. That is the traditional 
utility, the utility that provides electricity to my home in New 
Mexico, provides electricity to my home in Washington, DC, and to homes 
all around this country. Utilities own the generation capacity, own the 
transmission, and own the distribution. If two utilities want to merge, 
they have to present their proposal to merge to the Federal Energy 
Regulatory Commission, and the Federal Energy Regulatory Commission 
looks at that and says this is OK or this is not OK because we have 
determined it is not going to adversely affect the ratepayers. The 
people at home who are being served by one or the other of these 
utilities will not have to pay more if we approve this merger. That is 
what FERC has to determine at this point.
  In the past, all generation was owned by jurisdictional utility 
companies. This is the way the system was operated. If you had a plant 
to generate power, almost certainly that plant was owned by a utility 
company. There were no independent companies out there saying all we 
want to do is generate power and then we will sell it to utilities. It 
was all owned by utilities. If a utility merged with another utility, 
the merger was jurisdictional at FERC under the Federal Power Act. That 
means that FERC had to sign off on the deal, essentially, and that was 
the protection that was built into the law for consumers.
  Since all generation except for small renewable generators and 
cogenerators under the Public Utility Regulatory Policy Act was owned 
by utilities that were, in fact, under FERC jurisdiction, all mergers 
involving generation came under the jurisdiction of FERC.
  That was a good system as far as it went, but that was the system 
which made sense when the Federal Power Act was enacted because then we 
were dealing with vertically integrated utilities.
  The world has changed, so let me go to chart No. 2.
  Before I talk about the changed world, let me describe this second 
chart. The title of this chart is ``PUHCA Jurisdiction.'' I said 
before, PUHCA is the Public Utility Holding Company Act, and the Public 
Utility Holding Company Act provides essentially a set of restrictions 
on what holding companies are able to do, and particularly what holding 
companies are able to do with regard to purchase or acquisition of 
utilities. If a holding company acquired a utility company, then the 
Securities and Exchange Commission under PUHCA, the Public Utility 
Holding Company Act, had jurisdiction and authority to review that 
acquisition. The relationships between the utility and all of its new 
affiliates were governed by the Public Utility Holding Company Act.
  The proposal we have here before us in the Senate is let's repeal 
this entire thing. All of the restrictions under which holding 
companies operate today would no longer apply. The question is, If we 
do that, what are we going to substitute for that jurisdiction or for 
that oversight to ensure that consumers are not adversely affected? 
This shows the holding company over here on the right, and under it you 
see it owns a utility, it owns other affiliates, it owns perhaps 
another utility, generation and marketing affiliate--it has a variety 
of companies it holds as a holding company. The question is, Who is 
going to have the responsibility to be sure there will not be cross-
subsidy so that ratepayers of utilities are not adversely affected if 
we eliminate the Public Utility Holding Company Act?
  Let me move to the third chart to try to explain this. In the new 
world in which we now find ourselves, we no longer have as many 
vertically integrated utility companies. More and more we are seeing 
generation of electric power done by other companies which are not 
vertically integrated utilities. In this new world, generation is 
separated from the utility company, and it is either sold to a stand-
alone generation company or spun off as an affiliate of a holding 
company that owns a utility. The sales or the spinoff would not be 
under FERC jurisdiction under the Federal Power Act, since generation 
facilities were not specifically put under FERC's authority. Generation 
facilities wound up under FERC's authority because they were part of 
integrated utilities. Now we are saying: OK, what do we put in place to 
live with this new world?
  We are saying we need to specify that generation facilities are under 
FERC authority. They clearly would not be covered--there is no 
jurisdiction under FERC for the generation affiliate down below, or the 
generation affiliate of this utility. If those generation affiliates 
decide to merge, there is no prohibition against that. There is no 
requirement that any Federal agency review that to see whether it helps 
or hurts utility payers, ratepayers.
  We get back to the point I was trying to make at the very beginning 
of my comments, which is you could see a company come along and buy up 
this generation affiliate, that generation affiliate, buy up all the 
generation affiliates in a region of the country, and do whatever it 
wished with regard to their rates for electricity, and nobody at the 
Federal level has oversight to review that.
  I do not think that is in the best interests of consumers. I do not 
think that is in the best interests of ratepayers. Accordingly, I think 
we should fix it.
  There are some horror stories that should make the point that what I 
am talking about is not just academic. This isn't something we dreamed 
up in some ivory tower somewhere. These are horror stories that can be 
read about in the mainstream press, in the trade press; in fact, it is 
hard to pick up a news publication that does not tell a new story about 
how some utility or other is in trouble because of its investments in 
and involvement in nonutility businesses. That is a very common problem 
that has arisen.
  This is a quote from the December Wall Street Journal.

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

  That is the Wall Street Journal, which is not a left-wing 
publication. According to the Journal:

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

  Then the story goes on to say:

       In many cases, regulators can do little to prevent energy 
     holding companies from milking their utility units.

  What my amendment is trying to do is put in place some protections 
against this milking of utility units.

[[Page 20036]]

When you talk about milking a utility unit, that is easily translated 
into raising electricity rates, raising the rates of the ratepayers in 
order to compensate for bad business judgments, unprofitable 
investments in other areas.
  It is not enough for us to have in place some vague idea that we want 
to be helpful to consumers. What we want to say is the Federal Energy 
Regulatory Commission needs to make a finding when it approves one of 
these acquisitions or mergers. It needs to make a finding that there is 
not going to be a cross-subsidy, that we are not going to see the 
assets of the utility encumbered in order to help some other part of 
this business, some other part of this holding company. That is what we 
are saying.
  All of these stories result in negative effects on ratepayers and 
consumers.
  When the utility is downgraded, its consumers pay increased costs of 
capital. Where the utility itself is facing bankruptcy, the effects on 
consumers can be even worse than that.
  Wesstar is one example. Wesstar's regulators have been left with the 
unpleasant alternative of saddling the utility's ratepayers with $100 
million per year, which is the cost that is required to pay down the 
debt the company caused by its investment in unregulated ventures.
  It is clear that utility customers need to be protected against these 
excesses; that firewalls need to be built between the utility 
affiliates of a holding company and its unregulated affiliates.
  These are not stories from the distant past. These are stories from 
today's headlines. Let me go into a little more detail on a few of 
them. Let me mention Wesstar. Wesstar I just mentioned. Let me go into 
a little more detail about the problem.
  Wesstar is the largest utility in the State of Kansas. It is owned by 
a holding company, WRI, that also owns KP&L, the other large utility in 
the State. It owns a variety of nonutility companies and holdings. All 
of these together used to be the Kansas City Power and Light and Kansas 
Gas and Electric.
  Wesstar came under scrutiny last year because of its problems caused 
by nonutility affiliates. Wesstar had invested in a number of 
unregulated ventures, including a home security company. That 
investment did not turn out well. The holding company shifted $1.5 
billion of debt from the unregulated companies to the utility.
  The Kansas Corporation Commission began an investigation. The Justice 
Department began an investigation last summer. The Federal 
investigation resulted in the indictment of the CEO of the company for 
bank fraud. The Kansas Corporation Commission investigation resulted in 
a dramatic restructuring of the company to separate the utility from 
the unregulated companies of the holding company.
  The utility customers, in spite of all that has since happened--these 
investigations occurred after the fact--are still left with an 
obligation to reduce the debt of the utility by $100 million a year 
because of the activities of the unregulated affiliates. Ratings 
agencies have reduced the debt rating of the company to below 
investment grade at this time. That is one example.
  Let me mention another. AES is a holding company that owns generation 
assets and marketing assets around the world. In 2000, AES acquired 
Indiana Power and Light, which is a regulated utility in Indiana. 
Because of the difficulties in wholesale electricity markets, the 
utility has been propping up the debt of the parent company over the 
last 2 years. For the 2 years of 2000 and 2001, the utility's dividend 
payments to the parent exceeded its earnings by over $100 million. The 
parent company's rating has dropped from AA minus to double B since 
2001. The utility's IPL is at the lowest investment grade. The Indiana 
Utility Regulatory Commission had no jurisdiction to review the 
acquisition of the utility by the holding company.
  Let me give one more example. That is Portland General Electric. 
Portland General Electric is a regulated utility in Oregon. PG&E in the 
late 1990s was acquired by Enron Corporation. The Oregon Public Utility 
Commission required a number of conditions before it agreed to approve 
that acquisition. As a result of the corporate separation required by 
the public utility commission, the effect of Enron's bankruptcy has 
been less than other similar acquisitions in other States. But even so, 
PG&E is now a parentless company. It is in danger of being taken over 
by another company. The fate of the parent company has also had an 
effect on the ability of the company to gain access to capital markets.
  I think the Senators from Oregon are probably better qualified than I 
to talk in detail about the frustration and dissatisfaction that 
utility ratepayers in Oregon have felt as a result of their unfortunate 
circumstance after being purchased by Enron.
  The amendment I have offered is straightforward. In my view, it 
closes a very significant loophole that still exists in the electricity 
title and substitute electricity title Senator Domenici has presented 
to the Senate. It will help us head off the kinds of crises and the 
kinds of inflation or dramatic increase in utility rates that 
unfortunately have been seen in some parts of the country.
  This is one of these issues where I think 2, 3, or 5 years from now 
people may look back and say, I wonder why I didn't vote for that 
amendment when we had a chance to plug that loophole. Those of us on 
the Energy Committee, quite frankly, will be saying, OK, who do we call 
before the Senate Energy Committee to hold accountable when these 
problems arise? The reality is it is going to be very hard to call 
anyone before the Senate Energy Committee unless we strengthen this 
legislation and put in there some very clear, bright-line tests that 
ensure we don't have crossover, to ensure the Federal Energy Regulatory 
Commission is held responsible for overseeing the acquisition, sale, or 
purchase of generation facilities. If we make a decision here to not 
vest that responsibility somewhere in the Federal Government--and 
obviously the place to do it would be the Federal Energy Regulatory 
Commission--then I think we will rue the day we stopped short of doing 
that.
  I hope my colleagues will support this amendment. It goes to the very 
heart of the electricity title of this bill. It would correct a very 
major deficiency in the electricity title of the bill as it now comes 
before the Senate.
  I yield the floor. I urge my colleagues to support the amendment.
  The PRESIDING OFFICER (Mr. Santorum). The Senator from Wyoming is 
recognized.
  Mr. THOMAS. Mr. President, let me say, first of all, I am happy we 
are moving forward with this amendment. This, of course, is a total 
effort to take last year's activities with relation to the electric 
title in the Energy bill and to redo it. Actually, we have been through 
this same argument before and we came up with a different 
recommendation.
  What we are seeking to do is cause our electric industry to be in a 
more modern status; to make changes in law and policy that reflect 
changes that have taken place and are taking place now in the energy 
industry.
  What we are trying to do here is deal with the Public Utility 
Regulatory Policy Act of 1935. We have, of course, a Federal policy 
that has been in place for almost 65 years. The Public Utility 
Regulatory Policy Act is an outdated statute that imposes barriers to 
competition and discourages investment in transmission.
  This is key. What we are seeking to do here is to modernize this 
system so that because of the changes that have already taken place, 
for instance, 30 percent now the power being generated by merchant 
generators who do not do their distribution, then there has to be an 
opportunity to have transmission lines. The investment in those is very 
high, and we have to make some changes in terms of how capital is 
created to be able to do that.
  PUHCA limits geographic and product diversification and imposes many 
burdensome filing requirements. We are seeking, again, to see if we 
can't make these rules and these laws more simplified without having 
the expense

[[Page 20037]]

of going through all these things. PUHCA is also a barrier to the 
formation of regional energy markets because arguably it could apply to 
the RTOs, the regional transmission organizations. This is again where 
we are moving. This is where we need to be.
  What we are seeking to do with this amendment is have the rules that 
applied since 1935 to an electric industry that is here in 2005, 
almost. So we are moving backward in a situation which we are seeking 
to modernize. That is really what it is all about. Repealing PUHCA 
would not preclude State and Federal regulators from protecting 
ratepayers. We have an apparatus in place in Government to do that.
  Access to books and records as well as rules regarding debt 
acquisition and accounting will protect investments on behalf of 
ratepayers. Also the Department of Justice and the Federal Trade 
Commission will continue to protect against antitrust violations.
  The Securities and Exchange Commission, which currently overseas 
PUHCA, has recommended on a number of occasions that PUHCA be repealed 
with certain consumer protections transferred to FERC and State 
regulatory commissions, as noted.
  Certainly there will be market transparency. There will be 
antimanipulation and enforcement in place. There will be rules issued 
to establish a system to do that. It prohibits the filing of false 
information regarding the price of wholesale electricity and 
availability of transmission capacity. It prohibits round-trip trading 
which was mentioned as the reason for making this change. It prohibits 
round-trip trading. It expands who can file complaints and who is 
subject to FERC investigation. It increases the penalties.
  I guess the point is that there is substantial consumer protection in 
place. That is basically what we are seeking to do.
  I rise in opposition to the pending amendment which proposes to 
expand the FERC's merger review authority to include acquisition of 
generating facilities. Under the current law, electric utility mergers 
are already heavily regulated. In addition, FERC, the Department of 
Justice, and the Federal Trade Commission must review proposed mergers 
for their impact on competition. State regulators in affected States 
also review proposed mergers. Expanding FERC's authority to cover 
acquisition of generation facilities is unnecessary. Furthermore, this 
amendment preempts the States' ability to protect consumers.
  The Bingaman amendment requires FERC to review and approve any 
utility acquisition of a generation asset in excess of $10 million. 
Every time a utility wants to replace a major boil or steam turbine or 
install a new switchyard, they have to get approval. What does that 
have to do with protecting competition which is the reason why FERC 
needs the authority? Absolutely nothing.
  Let me explain why this amendment is unnecessary to protect 
consumers. Under existing law, FERC has jurisdiction over wholesale 
power rates and States have jurisdiction over retail electric rates. 
That means that an electric utility cannot pass through to consumers, 
either in wholesale electric rates or in retail electric rates, any 
cost without first having obtained FERC or other State public utility 
commission authorization to do so. So a utility that purchases a new 
boiler--whether it is $1 million or $100 million--cannot pass through 
these costs without having to prove to the relevant regulator that the 
expenditure was prudent.
  If the regulator decides the expenditure is not prudent, then the 
utility cannot pass through the costs, and they are borne by the 
utility's stockholders and not its customers. That is good consumer 
protection practice.
  Let me explain why the pending amendment would actually interfere 
with State protection of consumers. Under existing Supreme Court 
doctrine, States may not deny the pass through of federally approved 
costs. The Supreme Court recently reiterated this principle just this 
summer in a June 2, 2003, decision, Entergy Louisiana versus Louisiana 
Public Service Commission. The Supreme Court held that FERC approved 
rates could not be second-guessed by State regulators. Accordingly, if, 
as the pending amendment proposes, we require FERC to approve and 
review utility acquisitions of powerplant utilities used for system 
supply to make retail sales, we are preempting the ability of a State 
public utility commission to review and approve--or deny--the utility's 
incurrence of those costs.
  I ask, why should we deny the State public utility commissions the 
ability to review utility costs that are being passed through in retail 
rates? How does that protect consumers? Will the FERC do a better job 
than our State commissions?
  This amendment is both unnecessary and unproductive. FERC will 
continue to review utility mergers to ensure that it is consistent with 
the public interest and will review proposed rates for the merged 
companies to ensure they are just and reasonable. That is FERC's 
appropriate role and we do not need to change it.
  Increasing FERC's merger authority to include generation-only 
facilities will only serve to impede efficient transactions without 
gaining consumer benefits.
  For these reasons, I think we should oppose the amendment, and I urge 
that we oppose the amendment.
  Again, in general terms, what we have done is packaged in this whole 
title, this electric title, the idea of what is happening in the 
electric system, where we want to be over time, a policy that will work 
in what is currently going on and what we hope to have happen in the 
future. To maintain and continue to go backward does not seem what we 
are appropriately here to do.
  We have gone through this whole thing. We have gone through witnesses 
in our committee. It has been approved. Certainly we ought to move 
forward with this package as it is conceived and dedicated, and we can 
improve the way we provide electric energy to everyone. But we have to 
continue to look forward and do things differently than we have done 
them in the past.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Chambliss). The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, let me make a few comments in response 
to my colleague, my good friend from Wyoming. I do think that he is in 
an awkward position because he was cosponsor with me of this exact 
language in the consideration of the Energy bill in the last Congress--
the exact language that I am now proposing by way of amendment. I 
thought it was the right policy then. I still think it is the right 
policy. I hope very much we can persuade Senators to adopt it as part 
of this bill.
  His statement was that we are preempting State authority if we adopt 
the language that I have offered by way of amendment. The National 
Association of Regulatory Utility Commissioners--those are the State 
commissioners--characterized the bill we had last year that had this 
provision in it, the provision I am now offering, as ``an admirable 
compromise between Federal and State jurisdictional issues.''
  That does not sound like the words of an entity that believes it has 
been preempted to the point that it is unable to do its job. While it 
is true that States have some ability to deal with some of these 
problems, it is almost always the case that their statutes do not 
reflect the degree of protection that is currently in the law in the 
Public Utility Holding Company Act. They have not needed to have laws 
to provide those protections because PUHCA was in place. It has been 
Federal law for many years.
  It is also true that many States that have found their customers to 
be victims of such abuse have not had the ability to deal with the 
problems. I gave you a couple of examples before where the States came 
along after the fact and tried to investigate, tried to find some way 
to make their consumers or their ratepayers whole, and found that they 
are not really able to do that. Some are trying. Some are trying in the 
face of tremendous opposition from their utilities to get the

[[Page 20038]]

necessary authority from their State legislatures.
  Do we have to wait for every State in the country to realize that 
their protections are inadequate once we repeal the Public Utility 
Holding Company Act or should we not here in the Congress provide at 
least some minimum protection at the Federal level to replace the 
protections we are eliminating as we repeal the Public Utility Holding 
Company Act?
  I think we owe it to those who sent us here to provide this minimal 
protection. PUHCA broke up the industry into manageable chunks and 
focused on its core business--that is, the provision of a monopoly 
electric provision service by requiring that utilities either operate 
primarily in a single State or be regulated stringently at the Federal 
level by the Securities and Exchange Commission.
  Utilities were also forbidden to engage in businesses that were not 
directly related to their monopoly electric service without explicit 
approval from the SEC. Large utilities were forbidden from such 
activities completely. A holding could not acquire more than one 
utility company in more than one State without coming under these very 
severe bans.
  So the sprawling empires of interconnected corporations owning 
electricity utilities were broken up. Companies were required to choose 
between their other businesses--staying in those other businesses or 
staying in the electric industry.
  If we are going to repeal the Public Utility Holding Company Act, as 
we are proposing to do in this bill, then it is essential that we lodge 
the consumer protections that are so important to all Americans in a 
meaningful place. We have seen, over the last few years, how far astray 
from the goals of providing electricity to consumers at affordable 
prices our industry can wander. As we move forward, we must be sure 
that consumers are protected.
  Let me make a comparison between the language that I proposed by way 
of amendment and the underlying language. The reason I am offering my 
amendment is that the Domenici substitute has in it, in my view, very 
inadequate language to ensure that consumers are protected. It says:

       After notice and opportunity for a hearing, the Commission 
     shall approve the proposed disposition, consolidation, 
     acquisition, or change of control--

  That is any merger or acquisition anyone proposes and brings before 
the commission--

     if it finds that the proposed transaction will be consistent 
     with the public interest.

  Well, that is fine. I certainly want everything to be consistent with 
the public interest. But that is somewhat in the eye of the beholder as 
to what is meant by that phrase. It goes on to say:

       In evaluating whether a transaction will be consistent with 
     the public interest, the Commission shall consider whether 
     the proposed transaction will adequately protect consumers, 
     will be consistent with the competitive wholesale markets, 
     will not impair the ability of the Commission or State 
     commission from having jurisdiction following the completion 
     of their transaction over any public utility, and will not 
     impair the financial integrity of any public utility that is 
     a party to the transaction, or an associate company or any 
     part of the transaction, and satisfies such other criteria as 
     they think is consistent with the public interest.

  Essentially, it is going back and saying the Commission has 
tremendous authority to decide what is consistent with the public 
interest and what is not consistent with public interest. Whatever they 
decide pretty much controls.
  What I have proposed in the amendment that I have sent to the desk, 
and what we had in our bill last year, which my good friend from 
Wyoming supported last year, was much more specific. It said:

       After notice and opportunity for a hearing, the Commission 
     shall approve the disposition, or consolidation, or 
     acquisition of control if it finds that the proposed 
     transaction, No. 1, will be consistent with the public 
     interest; second, will not adversely affect interests of 
     consumers of electric energy; third, will not impair the 
     ability of the Commission or the State Commission; and, 
     finally, will not lead to cross subsidization of associate 
     companies or encumber any utility assets for the benefit of 
     an associate company.

  It seems clear to me that we should want to be sure that cross-
subsidy will not occur. That is a bedrock requirement, as I see it, if 
FERC is going to sign off on these acquisitions and mergers. That is 
why we proposed this amendment.
  The other thing we propose in this amendment, which I think is also 
bedrock, is that companies involved with generation--the purchase and 
sale of those companies should also be under the jurisdiction of the 
Federal Energy Regulatory Commission. The FERC has not had to have that 
authority up until now because we have had the Public Utility Holding 
Company Act, which ensured there was oversight. There was regulation of 
those generation companies. That will no longer be the case once the 
Public Utility Holding Company Act is repealed.
  The question is, Who is going to oversee the purchase and sale of 
generation companies? Who is going to try to ensure that electric 
utility rates in a region, in a State, in a particular area do not go 
up because of the noncompetitive merger, or acquisition, or purchase of 
various generation facilities?
  So, clearly, our amendment tries to plug some major loopholes. It is 
exactly the language we offered in the debate last year. It was adopted 
at that time by a substantial majority of Senators. It was supported by 
my good friend from Wyoming last year. It is good policy. It was good 
policy then, it is good policy now, and it is the kind of test which, 
if we don't adopt it, we will regret that we did not. It is another one 
of these circumstances where at some future date we will be giving 
speeches on the Senate floor saying let's tighten up the regulation, 
strengthen the regulation; we don't want to see somewhere around the 
country any more of those problems like we just saw.
  I think the opportunity is here today. We know enough about the 
problem of cross-subsidization. We know enough about the economic 
difficulties, the financial difficulties that lead to cross-
subsidization to anticipate this problem and to get ahead of it and 
deal with it. That is what my amendment does. I urge adoption of my 
amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico, Mr. Domenici, is 
recognized.
  Mr. DOMENICI. Mr. President, first, I congratulate my colleague from 
New Mexico on his superb argument and presentation. I regret that I 
have to disagree. But before I state a few remarks, because I believe 
my friend from Wyoming has done a very good job of telling the Senate 
why we don't need this amendment, I would like to ask the Senate and 
all the Senators and their staffs, who were paying attention on their 
behalf, to remember now that we are on that very important part of this 
legislation--the electricity section--which we understood many Senators 
were worried about, and we understood a number of Senators had 
amendments.
  I have known from the beginning that my friend, Senator Bingaman, had 
one or two amendments. But I heard other people saying: We don't want 
to hurry along here because this is a very important piece of 
legislation and we want to have a chance to offer amendments.
  Well, the time is now. I am very hopeful, and the majority leader has 
told me it is up to me. I look at my distinguished friend, who is very 
much on top of things in the Senate, the Senator from Nevada, and say 
that he told me and our leader to stay here as late as we can tonight 
to get all the amendments we possibly can on this subject.
  We know a lot of Senators are busy, but we know they were told we 
were going to be in session every day this week. We are going to work 
day and evening. Every evening we work, it takes away an extra day at 
the end of the week that will detract from our recess. So if Senators 
have amendments, get them ready. We want them after this amendment.
  When I am finished, and after my friend from Wyoming has another 
chance to speak, if he wishes, I am going to ask the minority side what 
they would like to do next.

[[Page 20039]]

  Mr. President, I say to Senator Reid, my desire is that we not vote 
immediately on the Bingaman amendment, although I am perfectly willing. 
It is 20 minutes of 7. There is nobody on our side saying we should 
not. Maybe Senator Reid knows some reasons. I much prefer Senators keep 
doing what they are doing but that somebody come down and offer another 
amendment. Then I prefer not to vote on that amendment. I prefer 
another amendment until we have as many amendments as we can get in by 
late tonight.
  Why do I want to work late tonight? Besides it being Tuesday and we 
want to finish this bill by Friday, it is the unspoken word that the 
other side of the aisle, more so than we do, wants to offer some clean-
air type amendments that really do not belong on this bill but have 
historically or traditionally found their way on it because they do not 
have any other place to go. They want to offer some amendments.
  There are apparently two amendments on that side, at least, plus a 
couple of other amendments in the same vein. They wanted to offer them 
tomorrow, which can be nicknamed ``environmental day.'' We want to 
cooperate. To the extent we have to use more of the day for electricity 
amendments, we use less time for other amendments.
  I will in a very few words state my case. In 1935, I was 3 years old. 
I am not a student of what happened in the world during the Great 
Depression, but PUHCA was passed. It is funny sounding. It is terrible 
it had to have such an acronym, PUHCA, Public Utility Holding Company 
Act. It is almost one of those acronyms that cries out to never be 
called by an acronym, and it is better to be called the Public Utility 
Holding Company Act than PUHCA.
  Over the years, I have heard that funny word, and I did not even want 
to find out what it meant, but Public Utility Holding Company was a 
protective mechanism to make sure that during an era of pyramiding, 
where big money would buy up utilities, there was somebody watching. As 
an example, if one very rich bank out of Chicago, IL, started buying up 
companies all over the country and became a holding company--thus the 
title.
  Nobody is crying for the retention of PUHCA because there are so many 
other protections for that which it was invented. It is time for that 
funny name to disappear, and then it will not be used so much. We can 
then just say ``used to be PUHCA,'' and we will not have to talk about 
it.
  The truth is, as Senator Thomas said--and I agree--expanding FERC's 
authority to cover acquisition of generating facilities, which is part 
of Senator Bingaman's amendment, is unnecessary. Furthermore, this 
amendment preempts States' abilities to protect consumers. Repealing 
PUHCA will not preclude State and Federal regulators from protecting 
ratepayers. Access to books and records, as well as rules, regarding 
debt acquisition will protect investment made on behalf of ratepayers.
  Also, the Department of Justice and the Federal Trade Commission will 
continue to protect against antitrust violations, and the Securities 
and Exchange Commission, which currently oversees PUHCA, has 
recommended on a number of occasions that it be repealed with certain 
consumer protections transferred to FERC and State regulatory 
commissions, as noted above.
  What we are doing is getting rid of PUHCA, the 1935 antiquated law. 
In place of it, we clarify the jobs FERC does today and expand it only 
in a limited fashion. Our amendment let's PUHCA review utility 
transactions. The new authority is granted over gas acquisitions of 
utility companies by an electric utility company. This protects 
consumers and promotes investment in that regard.
  Clearly, if ever there was a case where we are overprotecting, it is 
the utility companies. I mentioned how many protections already exist. 
PUHCA started disappearing into the woodwork and became subservient and 
almost consumed by the SEC--they run it. SEC said they do not need 
PUHCA anymore.
  Believe it or not, it is pretty certain, when we finally vote, we are 
going to get rid of PUHCA. It is like certain past Presidents 
recommended getting rid of PUHCA and 40 years later something happens. 
That reminds me of something interesting and funny. About 8 years ago, 
I was heralded as one who had passed the largest single sale of public 
property, and all I had done was to take the U.S. Government's 
ownership of converting highly enriched uranium for use by nuclear 
powerplants, which is owned by the public, which had been recommended 
30 years before to be privatized, and I privatized it. I was heralded 
for having passed the first multibillion-dollar sale of property of the 
Federal Government. It is nothing new. It sure did not take any 
ingenuity, just like it takes no ingenuity to know that PUHCA ought to 
get out of here.
  In getting rid of PUHCA, the test that FERC applies is:

       Consistent with the public interest, we do not add new 
     tests.

  Senator Bingaman's amendment does. I do not think we need to add new 
tests. I believe what is in the bill is adequate for the governance of 
FERC in that regard.
  When I introduced the bill, I told the Senate all the groups that 
liked this bill--the public-private ownership, all of them. And it is 
most interesting, they all think we adequately protect against whatever 
the evils might have been that PUHCA might have covered: 
Municipalities, the APRAs, the large public power companies. They think 
there is a pretty good balance just like it is.
  At some point in time I hope when we vote on this that Senator 
Bingaman will understand there are those of us who think what we put in 
the bill is perfectly adequate and well balanced with reference to 
protection in this area.
  I ask Senator Bingaman and Senator Reid if they are finished? Are we 
ready for another amendment?
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. If I could ask the Senator from New Mexico a question?
  Mr. DOMENICI. Yes.
  Mr. REID. As I understand it, the Senator indicated what he would 
like to do tonight on the electricity title is have people come and 
offer amendments on the electricity title.
  Mr. DOMENICI. Yes.
  Mr. REID. Senator Bingaman has an amendment. Senator Cantwell perhaps 
has an amendment. There are a number of other Senators who wish to 
maybe offer amendments. The question I have to ask the Senator from New 
Mexico is, there are people who have amendments on other issues, 
separate and apart from the electricity title, and at least two 
Senators have asked if the Senator from New Mexico would allow the 
electricity title to be set aside and go to other areas.
  Mr. DOMENICI. I say to the Senator truthfully, it is not understood 
how hard I worked and how much I worried and sweated to get to where we 
are, which is the pending matter. I want Senators to understand we have 
to get rid of it.
  Mr. REID. I understand.
  Mr. DOMENICI. So I do not want to do that. I want Senators to get 
their amendments, even if it takes us a little while longer. The 
Senator is implying there may be four, maybe five. I do not know.
  Might I ask Senator Bingaman if he has another amendment?
  Mr. REID. If I could respond, the manager of the bill on our side 
does have another amendment he could offer tonight. I would like to 
continue my colloquy with the Senator from New Mexico, through the 
Chair. We have people wondering, are we going to vote on the first 
Bingaman amendment now, the second Bingaman amendment; are we going to 
have two votes? What is the pleasure of the Senator from New Mexico?
  Mr. DOMENICI. My pleasure is that we have votes tonight, unless the 
Senate sends word, in its inimicable way, that we are going to get all 
the amendments on electricity in due course this evening, in which 
event I would say we will not have any votes.
  Mr. REID. I respond to my friend from New Mexico, I do not think that

[[Page 20040]]

is going to happen. Senator Cantwell, for example, has amendments she 
wants to offer. She wants to take a little time on the first amendment. 
It is going to be more than a few minutes. She has asked for some time 
on that. If we cannot agree on a time, I assume she would talk for a 
little while and then offer the amendment.
  Mr. DOMENICI. When does the Senator think she might know?
  Mr. REID. Well, she is ready to offer her first amendment but that is 
going to take some time. I do not know if she is willing to finish the 
debate on it tonight. I could call and ask her.
  Mr. DOMENICI. Could the Senator inquire? What we could do then, while 
the Senator is inquiring, we could go with the second Bingaman 
amendment and we will stack them with a clear understanding that when 
we are ready, we will proceed in the same order they have been offered 
to vote on them.
  Mr. REID. I say to my friend from New Mexico, I think realistically 
if Senator Cantwell's is going to be the next amendment, it will be 
very difficult to finish all of the electricity amendments tonight. 
There are other people who want to offer amendments.
  Mr. DOMENICI. To the extent the Senator from Nevada desires and can 
be helpful--and that is strictly up to him--I would rather we get other 
Senators to offer amendments. Senator Bingaman has one. Are there any 
others?
  We know Senator Cantwell wants a lot of time and we would say to her 
she could be last tonight and take as long as she wants. We could then 
come in in the morning and take some more. I do not think we ought to 
have her come up and then say the only thing we did tonight was the 
Bingaman No. 1 and Cantwell all evening. I think we ought to be doing a 
little more than that.
  Mr. REID. I say to my friend from New Mexico, as I said earlier 
today, I know how hard he has worked to get the bill here and how 
important this bill is to him personally, and how important he believes 
this is for the country, but I say as sincerely as I can we are not 
going to be able to offer all the amendments on electricity tonight. I 
just do not think it will happen. I will go to the cloakroom and make 
some calls while the second Bingaman amendment is offered, but I think 
if the Senator's statement is that we are going to have to vote on the 
two Bingaman amendments unless we finish offering amendments tonight, 
we are going to have to vote on the two Bingaman amendments because I 
do not think we can get through all the amendments tonight.
  Mr. DOMENICI. Let's try to do this: Let us assume that we had 
Bingaman No. 2 and the Senator from Nevada went off and tried to 
discern how many other amendments on this subject we have, and that he 
return and say what they are. I am perfectly willing then to try to set 
in motion an agreement that some of them would be taken up in the 
morning.
  Mr. REID. I will be happy to respond to the Senator in the next 
little bit.
  Mr. DOMENICI. If we do not know, we are going to stay here and see 
how many we can flush out.
  Does Senator Bingaman want to proceed?
  Mr. BINGAMAN. Mr. President, I would like to say a few more things 
about the pending amendment.
  Mr. DOMENICI. Sure.
  Mr. BINGAMAN. Then I do have a second amendment which I am glad to 
offer this evening as well.
  I indicated there are several organizations that have supported the 
amendment I have sent to the desk, the American Association for Retired 
Persons, AARP, the Air Conditioning Contractors of America, Consumers 
for Fair Competition, the Consumers Union, the National Association of 
State Utility Consumer Advocates, National Electrical Contractors 
Association, Plumbing, Heating and Cooling Contractors, National 
Association of Public Citizens, U.S. PIRG. All of those groups support 
the amendment I have offered.
  In addition to that, we have a statement from the Bush administration 
which was from last year supporting FERC review of transfers of 
generation assets, which is part of what the amendment does that I have 
sent to the desk. I ask unanimous consent that this letter be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Bush Administration Supports FERC Review of Transfers of Generation 
                                 Assets


   09/14/01 Administration Includes Language in its draft ``Electric 
                     Reliability Transmission Act''

       ``Clarify the commission's authority over holding company 
     mergers and mergers and asset sales involving generation 
     facilities.''


  10/16/01 Administration Comments on Draft Senate bill ``Electricity 
                  Restructuring Act'' (Bingaman bill)

       Mergers and Asset Dispositions. ``FERC has the authority to 
     review mergers of `public utilities' under section 203 of the 
     Federal Power Act, and has asserted jurisdiction over mergers 
     of public utility parent companies. This assertion has not 
     been challenged, and holding companies have submitted their 
     mergers to FERC for its review. This language also clarifies 
     FERC authority over public utility mergers and asset 
     dispositions involving generation facilities. Under current 
     law, FERC has authority over only those generation facilities 
     associated with a wholesale power contract. If it is going to 
     prevent accumulation of market power, it should have 
     jurisdiction over generation facilities owned by public 
     utilities'' (emphasis added).


 10/9/01 ``Major Principles in Administration Position On Electricity 
                  Legislation'' (Department of Energy)

       Mergers and Asset Dispositions: ``Clarify FERC authority 
     over holding company mergers and mergers and asset 
     dispositions involving generation facilities.''


10/24/01 Letter from FERC Chairman Pat Wood to Rep. John Dingell (D-MI)

       Review of Mergers: ``It may be a good idea to clarify the 
     Commission's authority to review mergers involving only 
     generation facilities and mergers of holding companies with 
     electric utility subsidiaries. The increasing amount of 
     competition in power generation markets makes this more than 
     an academic question.''

  Mr. BINGAMAN. The administration includes language in its draft 
Electric Reliability Transmission Act to clarify the commission's 
authority over holding company mergers, and mergers and asset sales 
involving generation facilities. In another place in the 
administration's statement it says they support clarifying FERC 
authority over holding company mergers and mergers and asset 
dispositions involving generation facilities.
  What I am proposing is not a radical policy proposal. It is exactly 
what we adopted last Congress. It was adopted by a substantial majority 
of the Senate. It was supported by the Bush administration. Now we are 
backing away from that.
  I am told the Senator from New Mexico, my good friend Mr. Domenici, 
says this is agreed to by the Public Power Association and by the Rural 
Electric Cooperative Association. That is fine. I can understand that 
there are other things in the bill, in the overall electricity title, 
which cause them to believe this is something they should be quiet 
about or be willing to support--swallow hard and support, I would add--
but the reality is, it is not good policy for us to leave this issue 
unaddressed, this issue of adequate authority of the Federal Energy 
Regulatory Commission to oversee the acquisition or sale of generation 
facilities. That ought to be covered if we are going to pass an 
electricity title.
  Clearly, there should be authority and an enforceable responsibility 
on the part of FERC to ensure cross-subsidy does not occur. Those are 
the two primary things my amendment tries to deal with. I think they 
are very important.
  I have a letter from MBIA, Richard L. Weill, who is the vice chairman 
of MBIA Insurance Corporation. I will read portions of that for my 
colleagues, because I think it is instructive. He says:

       I am writing on behalf of the MBIA Insurance Corporation in 
     support of your proposed amendment to the Energy Policy Act 
     of 2003 that would strengthen the regulatory framework of 
     utility mergers.
       MBIA Insurance Corporation is the largest financial 
     guaranty insurance company in the world. We have guaranteed 
     the timely payment of principal and interest on more than $14 
     billion of electric utility debt. Our guarantee is 
     unconditional and irrevocable, even in the event of fraud. In 
     that context, we are profoundly concerned about the strength 
     and integrity of the regulatory scheme of electric utilities.

[[Page 20041]]

       We are, in a sense, a gatekeeper to the capital markets for 
     these utilities. We provide investors with our unconditional 
     and irrevocable guarantee and, as a result, provide the 
     utilities with the lowest possible cost of access to the 
     capital markets. Our Triple-A rating by all major rating 
     agencies enables the utilities to sell debt at the lowest 
     interest rate. We can continue to serve these investors and 
     this industry only if we can be assured of the probity, 
     comprehensiveness and fairness of the regulatory framework.
       Your amendment would require that proposed mergers promote 
     the public interest that is defined as encompassing the 
     effects on competition, economic efficiency and regulatory 
     oversight. It would also close loopholes that enable certain 
     corporate combinations to avoid being characterized as 
     mergers.
       We believe that this amendment will be viewed favorably by 
     the capital markets.

  We are trying to close loopholes that enable certain corporate 
combinations to avoid being characterized as mergers. That is exactly 
the problem with the substitute proposal Senator Domenici has laid 
before the Senate.
  By adopting the language in my amendment--that was in the bill last 
year--we close those loopholes, we guarantee consumers will be 
protected, we guarantee these utilities will get the lowest possible 
interest rates and that this insurance arrangement can remain in 
effect.
  This is a very good amendment. I hope my colleagues will support it. 
It will strengthen this bill. This is not an amendment offered with the 
intent of undermining the electricity title. This is an amendment 
offered with the intent of strengthening the electricity title. It is 
very well crafted, in my view, to accomplish that.
  I yield the floor, and at the appropriate time I will offer another 
amendment on a different aspect of the electricity title.
  Mr. REID. Mr. President, I need to confer with the Democratic leader 
about the question asked by the Senator from New Mexico. In the 
interim, I ask unanimous consent that the Senator from Illinois, Mr. 
Durbin, be recognized to speak for up to 5 minutes as in morning 
business regarding an unfortunate death of one of his close friends.
  Mr. THOMAS. Reserving the right to object, I would like to make some 
more comments on this particular amendment following the remarks of 
Senator Durbin.
  The PRESIDING OFFICER (Mr. Talent). Without objection, it is so 
ordered.
  (The remarks of Mr. Durbin are printed in today's Record under 
``Morning Business.'')
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. Mr. President, I take a moment to comment again on the 
pending amendment. It has been mentioned several times this was in our 
bill last year; that is true. I supported it; that is true. But we have 
to understand how we got in that situation.
  First of all, we had come to the floor without having the committee 
work on the bill at all last year. This is quite a different situation 
where we quietly and completely have gone through the bill.
  I also have to say my friend from New Mexico had quite a stronger 
statement and I had a less strong statement than what is in here. We 
agreed to a compromise. So it is not the way I would have done it had I 
had my way, but we wanted to move something. In any event, that is the 
way we came to have that language.
  We are talking about consumer protection. We get all tied up in some 
of these terms, but the fact is we are seeking to put authority there 
for someone to oversee. What we want to do, of course, is to have FERC 
do it without an expansion of authority.
  So we are saying in the language of the bill, no public utility 
shall, without first securing the order of the commission authorizing 
it to do so, sell, lease, or otherwise dispose of facilities; to merge 
or consolidate, directly or indirectly, such facilities or any part 
thereof; purchase, acquire, take any security over $10 million.
  It is very clear. That is what we do under the bill as it now is 
drafted.
  Then we go on to say in evaluating the transaction on the 
applications and so on, the Commission will adequately protect consumer 
interests, will be consistent with competitive wholesale markets

       . . . will not impair the ability of the Commission or the 
     ability of a State commission having jurisdiction following 
     the completion of the transaction over any public utility 
     that is a party to the transaction or an associate company of 
     any party to the transaction . . .

  That is what we say in the bill.

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

  Finally:

       . . . satisfies such other criteria as the Commission 
     considers consistent with the public interest.

  So what we do is give the direction to the Commission to do the very 
thing that we are talking about, and that is to ensure that mergers are 
fair to consumers. That is what this whole area is about. It has been 
drafted carefully to be in that form.
  I think it would be a mistake for us to adopt any changes in that 
when we have what we need for the protection of consumers, something we 
have agreed to, something that is part of a modernization effort. We 
should not change that by an amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. I indicated to my friend, the distinguished senior Senator 
from New Mexico, and Senator Bingaman, the manager on our side, that I 
would check to find out what we have in the way of amendments.
  This is certainly an incomplete list. We have not hot-lined this, but 
we have had people call the cloakroom. We have five Senators who wish 
to offer amendments at this stage. We have at least one of those 
Senators who is going to offer multiple amendments--multiple means 
maybe three, maybe four amendments.
  To make a long story short and not take undue time, we would be 
agreeable to having the second Bingaman amendment debated tonight. We 
would lay down the first Cantwell amendment with the understanding that 
she will lay that amendment down tonight and debate it for an hour 
tonight. She wants 2 hours on it tomorrow.
  If the Senator from New Mexico, the chairman of the committee, does 
not want to agree to this, then we should have the two votes on 
Bingaman, and likely we will not offer any more amendments tonight.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. First, I thank the Senator for the hard work he is 
doing, trying to ascertain from Senators at this hour--although we have 
all been telling them we are working, and this is the work part of the 
day, it is not hard to find out what they want to do. I thank you for 
the obviously successful effort you made so far.
  Mr. REID. If my friend will yield for one other thing I should have 
said before?
  Mr. DOMENICI. Yes.
  Mr. REID. As the Senator from New Mexico knows, this electricity 
title is very important to some Members of the Senate. None of these 
amendments, I want the record to reflect, are done in any way to slow 
up, slow walk, or stop this bill. These amendments, as has been seen by 
the amendments of the Senator from New Mexico, are amendments offered 
in good faith to try to improve this bill.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Might I say to the distinguished Senator from Nevada, 
all I want to try to do is move this bill along, as you know, and to do 
that in a way that is consistent with Senators having ample time to 
prepare and to present their amendments properly. You indicated to me, 
without certainty but relatively close, that you probably--we are 
probably looking at eight amendments, five Senators, with one of them 
who has three.
  I might ask, Is Senator Bingaman's No. 2 included in that?
  Mr. REID. No.
  Mr. DOMENICI. No. So it is the possibility of nine amendments. I want 
to tell the Senator from the start that, as far as the distinguished 
Senator Maria

[[Page 20042]]

Cantwell, I certainly do not have any objection to 1 hour tonight and 2 
hours tomorrow morning. We can start with that. But what I do have some 
concern about is trying to determine when we would be finished with 
amendments to the electricity title. I tell you that as much because I 
have been hearing from your side of the aisle of the great desire to 
take up two amendments that have to do with climate change. I have been 
told the only way that can be done, and done right, is tomorrow because 
everybody will be here. That is two.
  I have been told that--and I know--Senator Bingaman wants to offer 
his amendment with reference to a 10 percent mandatory renewable 
portfolio, and that belongs in the same package.
  I have been told the distinguished Senator has a new source 
performance review; is that correct? Is that what it is called?
  Mr. REID. That is true. New source review.
  Mr. DOMENICI. I remember that when I was on the committee--new source 
review. He had that up once. A couple of Senators came back who were 
not here then. That may well be why. But that is another one we have to 
look at.
  I guess what I am wondering is, if it would be asking you too much to 
suggest the following; that Senator Bingaman offer his amendment--I am 
not suggesting, I am not proposing this officially--he offer his second 
amendment here, and that Senator Cantwell offer her amendment tonight 
and debate it for an hour; that you try to find one more amendment to 
be offered tonight, and then that we reach agreement, come back 
tomorrow, reconvene at 9 o'clock in the morning, at which time Senator 
Cantwell would have her time, and all the remaining amendments--that is 
9, 10, 11--remaining amendments in this area would be finished by 1 
o'clock in the afternoon.
  Mr. REID. We couldn't agree to that.
  Mr. DOMENICI. What time would you think?
  Mr. REID. If Senator Cantwell debates for 2 hours, that is 11 
o'clock.
  Mr. DOMENICI. Yes.
  Mr. REID. And we have three votes, that takes us to about 12 or 
12:15. That would be almost humanly impossible.
  Mr. DOMENICI. What would you like, 2:30; 3?
  Mr. REID. I say to my friend, I have no authority. I am dealing with 
five Senators who are all Senators in their own right. I am here just 
trying to help a little and take phone calls from them, things of that 
nature. Some of them, frankly, are out doing other things tonight. We 
could not agree to that.
  The Democratic leader, with whom I spoke just a few minutes ago, 
indicates he thinks, and I would acknowledge he is probably right in 
this regard, about as far as we can go tonight is lay Cantwell down, 
get a time agreement on hers. Maybe during--not maybe, but during the 
morning hours when she is debating hers, we would be able to try to 
come up with a list of amendments.
  But any one of these Senators can object to a finite list. I just 
don't see anything happening in the next few hours.
  Mr. DOMENICI. I would like to do this, with your concurrence. Why 
don't we proceed with the Bingaman amendment, tell Senator Maria 
Cantwell she will be next for an hour tonight. In the meantime, would 
you let us work on the unanimous consent request proposal so your staff 
and ours----
  Mr. REID. I say to my friend, I am very happy to do that. One thing 
that people on my side--and, frankly, I have gotten a call from 
somebody on your side. Are there going to be any votes tonight?
  Mr. DOMENICI. Unless an agreement is worked out, Senator, we are 
going to have a vote tonight.
  Mr. REID. Then there will be no Cantwell amendment offered tonight. 
As soon as Bingaman is offered, we can vote on that, and there will be 
no Cantwell amendments tonight.
  Mr. DOMENICI. Would the Senator like to work on a unanimous consent 
request that includes Senator Maria Cantwell?
  Mr. REID. I say, Senator Bingaman is going to take a little bit of 
time. He said he wouldn't take very long. But if he takes a half hour 
and there is response to that, we are not going to finish what we are 
doing now until 8:30, quarter to 9. Senator Cantwell is not going to 
offer an amendment at that time.
  If you want to finish Bingaman, have Cantwell laid down tonight, and 
have Cantwell come in in the morning, that is fine. Have votes whenever 
you want them, but if we are going to have votes on Bingaman, we are 
not going to offer any more amendments tonight.
  Mr. DOMENICI. Let us make this effort: That Senator Bingaman would 
proceed for as long as it takes, Senator Cantwell will offer her 
amendment and take an hour tonight, and that we work on a UC request 
together while that is occurring. She will get her 2 hours tomorrow, 
and we will try to get a consent as to when we might finish. If not, I 
will go along and say we won't have any votes tonight.
  Mr. REID. I say through the Chair to my dear friend, the senior 
Senator from New Mexico, that I don't think it is possible to get an 
agreement locking in these amendments. I just do not think it is 
possible. I don't want to act in bad faith. I would like to do that. I 
believe in an orderly body. But I just don't think I can get that done. 
We have people off the Hill and people just automatically object to 
things at this time of night. I don't think we can get it done.
  Mr. DOMENICI. I want to say now--and I will say it three more times 
tonight before we finish--to Senators wherever they are that we are not 
quitting tomorrow night at 7:20. If there are Senators who want to be 
off the Hill, they can be off. We are going to be here tomorrow night 
voting on amendments that your side wants. We are just about out of 
amendments on our side of the aisle. I am not sure of any really 
important ones left. Your side has been telling me they want these very 
important amendments that they claim are related to this bill. A whole 
bunch of amendments that are left don't even belong on this Energy bill 
and are not even within this committee's jurisdiction. This Senator 
stands up and argues against them but, as a matter of fact, they ought 
to be argued by another committee chairman. I am not even the one who 
takes care of them. But I will have to do that.
  As long as everybody understands, Senator Cantwell will be taking 2 
hours tomorrow. We are going to start at 9 o'clock. We are still going 
to be on these amendments to this bill. We need Senators to get ready 
tomorrow morning with additional amendments in this arena. Then we will 
proceed quickly to the amendments such as the one Senator Feinstein has 
and all the others. But we will be here tomorrow evening. We will be 
here plenty late as we take those amendments, as long as we understand 
we are ready to do what you recommend.
  Mr. REID. If I could through the Chair, is the Senator from New 
Mexico saying that tomorrow we are going to move off of the electricity 
title into other areas?
  Mr. DOMENICI. We will stay right on electricity in the morning and 
try to finish it as soon as we can. I am hoping that it doesn't take 
all day so we can go to the other issues. But at this point, could we 
just, so as to protect you, agree that if you will move as follows 
tonight, we will set aside the current Bingaman amendment so that the 
second Bingaman amendment can be taken up. Then it will be set aside so 
we can take up first the Cantwell. She will use 1 hour tonight. We will 
answer, if we see fit. If not, we will debate it tomorrow. Nonetheless, 
we will come in tomorrow at 9 o'clock, and when we get on this bill, 
Senator Cantwell will be up and she will have an additional 2 hours on 
her amendment. I am merely adding as a matter of discussion that 
further amendments on this section of the bill will be in order at that 
time.
  Mr. REID. I understand very clearly the chairman of the committee.
  Mr. DOMENICI. Is that fair enough?
  Mr. REID. Very fair.
  Mr. DOMENICI. Senators understand that means we are not going to vote 
tonight. But you certainly can look to a late night tomorrow night with 
votes.
  I yield the floor and thank the distinguished Senator.

[[Page 20043]]

  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I ask unanimous consent to set aside the 
amendment that I just sent to the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 1418 To Amendment No. 1412

   (Purpose: To preserve the Federal Energy Regulatory Commission's 
    authority to protect the public interest prior to July 1, 2005)

  Mr. BINGAMAN. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New Mexico [Mr. Bingaman] proposes an 
     amendment numbered 1418 to amendment No. 1412:
       On page 9, lines 23 through 24, strike ``including any rule 
     or order of general applicability within the scope of the 
     proposed rulemaking,'' and insert: ``nor any final rule or 
     order of general applicability establishing a standard market 
     design,''.

  Mr. BINGAMAN. Mr. President, my colleague from Wyoming is here. I 
mentioned to him that this is an issue which I would like us to try to 
find some way to resolve. This is something that we may well be able to 
avoid having a vote on tomorrow, if we can find a way to resolve it.
  The amendment I have sent to the desk tries to clarify something in 
the bill that I think is very important. Senator Domenici's substitute 
contains a delay in the issuance of the Federal Energy Regulatory 
Commission's standard market design rulemaking until July 2005. I 
understand that. That is fine. I am not trying to disturb that. I 
believe the rule goes too far and should be dramatically modified or 
completely abrogated.
  I know there are Members of the Senate who think 2005 is the wrong 
date, that we ought to go to 2008 or some other date. Others believe 
FERC should be permitted to go ahead, and as quickly as they would 
like. I am not taking a position on that issue with my amendment. I, 
frankly, can see both sides of the argument.
  My amendment leaves the delay of the standard market design rule that 
Senator Domenici has included in his substitute in place. However, in 
an effort to prevent the Federal Energy Regulatory Commission from 
renaming the rule and issuing it under a new title, the bill also goes 
on to prohibit ``any rule or order of general applicability on matters 
within the scope of the rule.''
  That means the Federal Energy Regulatory Commission cannot issue a 
rule or order of general applicability on any issue that is dealt with 
in the proposed rule during the 2 years of the delay.
  What kind of actions would this prevent? That is the obvious 
question.
  I think it would prevent the Commission from doing its job. The 
Federal Energy Regulatory Commission currently has a rule in the 
process on interconnections to the transmission grid. No matter what 
that rule says, the Federal Energy Regulatory Commission would be 
prohibited from issuing it under this language that we have in the 
Domenici substitute.
  Other matters dealt with in the rule that the Federal Energy 
Regulatory Commission would be prevented from dealing with in a generic 
manner are such issues as market oversight, market litigation, 
transmission pricing, the scope of regional transmission 
organizations--RTOs--the adequacy of rules or transactions across RTO 
boundaries, and, in short, just about anything that the Commission does 
about transmission or markets because the proposed rule touches on all 
of those issues.
  There are even rules that the Commission is required to issue by 
other provisions in this Domenici substitute that they would be 
prohibited from issuing because of this provision that I am here trying 
to change. There are a number of rules necessary to get the reliability 
section to work. The bill requires rules on mergers, on transmission 
access by public power entities, on participant funding, and other 
matters.
  The provision that I am here trying to modify or change would 
prohibit the issuance of those rules whereas in another place in the 
same title we are saying the Commission is directed to issue.
  It would be ironic, indeed, if the rule's opponents who want stronger 
participant funding language in the rule were to have prevented the 
Federal Energy Regulatory Commission from issuing this rule related to 
participant funding that they want to see issued because of their zeal 
to prevent the standard market design from being issued.
  I also believe that some of the orders that the Federal Energy 
Regulatory Commission issued in the Western market crises would be 
defined as orders of general applicability and would have been 
prohibited.
  If we have another crisis which occurs during these upcoming 2 years, 
would we not want the Federal Energy Regulatory Commission to bring 
order to those markets the way they finally did in the West 2 years ago 
in the summer?
  Everybody, both the opponents and the supporters of the standard 
market design, should support the amendment I am offering. It is an 
amendment to clarify that the Federal Energy Regulatory Commission is 
not banned from issuing any orders or rules that deal with any matter 
in the proposed rule; that they should only, instead, be prohibited 
from issuing a standard market design rule by any other name.
  So I believe what I am proposing is something that all colleagues who 
have looked at this issue would agree with. We are just trying to 
clarify the language so we do not wind up prohibiting the Federal 
Energy Regulatory Commission from doing the very things we are going to 
be calling upon them to get done, and that is the effect of the 
language that is in the Domenici substitute at this time.
  So that is the thrust of my amendment. As I say, this is an issue 
which, frankly, we should not have to be dealing with by amendment on 
the Senate floor. I would hope we could just get this resolved at a 
staff level. We have not been able to. I hope that can still happen and 
that we can avoid having to go to a vote on this question because I 
think in the final analysis, if anybody will spend a little bit of time 
trying to understand this issue, they will agree with this change in 
language that I am proposing. And they will agree that is, in fact, 
what the Senate would like to see done.
  So, Mr. President, with that, let me yield the floor. My colleague 
may want to speak on this same amendment.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. THOMAS. Mr. President, I think the Senator raises an issue that 
we should discuss, but I have to tell you, it has been discussed, and 
there is a certain amount of balance that goes into this entire 
project. In other words, there are other parts of the bill which 
indicate that FERC should work with RTOs, for example, or should do 
some of the other things.
  Market design is a rather broad concept, and I think this amendment 
is not necessary. It is illogical to read this SMD delay to tell FERC 
it cannot do its duty. So when you broaden the whole thing to say you 
can't do anything, as this amendment implies in establishing a general 
market design, I suppose you might pick up some things that might be a 
market design and say you can't do that, when in the bill that is what 
we are seeking to cause them to do.
  I do agree perhaps there ought to be an effort made to clarify this 
language, as I think the Senator wants to do. And perhaps there is a 
way where we could do a colloquy, or do something to make it certain 
that it is not there to interfere with the other things we would want 
FERC to be doing; for instance, to issue rulemaking on market 
transparency or participant funding.
  We have a balance. And it is a little difficult to achieve that 
balance if we go with this very broad change. So I think, as it stands, 
we would have to oppose the amendment. But we encourage the Senator--
perhaps we could get together with our staffs and figure out a colloquy 
that would make it clear in some other fashion.
  I yield the floor.

[[Page 20044]]

  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I appreciate the comments of my friend 
from Wyoming. Now that we know the procedure--that this will not be 
voted on until tomorrow at some point--therefore, there will be an 
opportunity, perhaps this evening or early tomorrow, when our staffs 
can get together to see if there is any way to accommodate this concern 
I am trying to deal with in this amendment. As I say, it is a concern 
which I think many Senators will share if they will focus on what we 
are trying to deal with.
  So the amendment is pending. If we have to, we can have a vote on it, 
but I would hope we could find another way to deal with this issue that 
will be acceptable to the chairman of the committee and to my colleague 
from Wyoming and to all Senators.
  Mr. President, that is the only other amendment I intended to offer 
this evening.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. I say to my friend, Senator Bingaman, perhaps, with a 
little bit of time, we can work on it and see if there is some way we 
can avoid an amendment. If not, clearly, you understand yours, and we 
understand our reasoning why we do not need it; that it should not be 
an amendment; that it should not be raised to that level; that it is 
not needed in terms of the full amendment. But we will work on it.
  Now, I understand the time has arrived when I would make a request 
because I don't think I did the other in the form of a unanimous 
consent request.
  I ask unanimous consent that the second Bingaman amendment be set 
aside so that the distinguished Senator, Maria Cantwell, can offer her 
amendment, and that she would use up to 1 hour tonight and have up to 2 
hours tomorrow on that same amendment.
  I ask Senator Cantwell, that is correct, is it not, that you would 
like up to an hour tonight and up to 2 hours tomorrow on this 
amendment?
  Ms. CANTWELL. That is correct.
  My colleagues from throughout the West are very concerned that they 
have ample time to express their opinion about the electricity title 
and this particular amendment. So if you want to limit it to an hour 
tonight, we will use the 2 hours tomorrow to give my colleagues a 
chance to speak.
  Mr. DOMENICI. I just wanted to make it clear we are not trying to 
deny you anything. We just have to have some idea what comes next so 
other people can be ready. And if it looks as if we come in at 9, you 
would still have up to 2 hours for further discussion by you and others 
regarding that amendment.
  The PRESIDING OFFICER. Is there objection to the unanimous consent 
request?
  Mr. REID. Mr. President, reserving the right to object, it is my 
understanding, then, that the request is that Senator Cantwell would be 
able to lay down her amendment tonight, that she would have up to 1 
hour tonight, 2 hours tomorrow, and there would be no tabling motion 
before that 2 hours is up in the morning.
  Mr. DOMENICI. The Senator is correct, except, might I say, I think it 
is fair, just for the Senate's sake, that we say on both of those up to 
2 hours. And I do not intend to amend. But we don't have to wait here 
if she is finished.
  Mr. REID. No question about that.
  Mr. DOMENICI. I yield the floor.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Ms. CANTWELL. If I could clarify, I don't know whether we will 
actually physically lay down the amendment tonight or the first thing 
at 9 a.m., but we will talk about the amendment, use that 1 hour 
tonight, and use the 2 hours according to the agreement.
  Mr. REID. Mr. President, if I could respond to the Senator from 
Washington, that is your choice. You have 3 hours on this amendment. 
You can either offer it tonight or in the morning. But if you offer it 
in the morning, the time you are taking tonight would run against your 
time. So if you take more than an hour tonight, you will lose it in the 
morning.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I don't have any objection, but we have 
been talking for about an hour about that amendment and you, I say to 
the distinguished minority whip, have been saying the important thing 
is that she would have an hour tonight on her amendment. But we are not 
going to have her amendment. We thought it was going to be laid down so 
we would know what it is about.
  Mr. REID. Mr. President, I say to my friend from New Mexico, the 
Senator from Washington--as long as she knows she has a total of 3 
hours on her amendment--would have no problem sharing that with you 
tonight.
  Mr. DOMENICI. Can we have the amendment? That is all we want.
  Ms. CANTWELL. Absolutely.
  Mr. DOMENICI. Thank you.
  I yield the floor.
  The PRESIDING OFFICER. Who seeks recognition?
  The Senator from Washington.
  Ms. CANTWELL. Mr. President, I thank my colleagues for their 
cooperation. We want all Members to understand the amendment I will be 
offering tomorrow, and we certainly want the American public to 
understand it. I have a few comments on the Domenici underlying 
amendment and on the Bingaman amendment as well. They are related to 
our overall effort.
  Let me step back for a moment. The debate we have been having 
involves important issues about how America moves forward on an energy 
bill, how we diversify our energy away from foreign dependence, and how 
we make the right investments. I have a lot of concerns about this 
bill, that it is not on target making the right investments. I am sure 
I will have a chance to get to that point later as this bill continues 
to be debated. But what I feel is most important tonight is that my 
colleagues and the American people understand this bill has significant 
changes in it as it relates to consumer protections and the failure we 
have had as a government in protecting consumers from the energy crisis 
that has damaged the west coast economy.
  When I think of this debate we have had for the last hour or two--
actually for the last day or so--about how much time we should give to 
the Energy bill, I find it amazing. Because the west coast economy got 
hit basically to the tune of about $6 billion. That is the cost for 
manipulated contracts that we in the west paid for in our economies. So 
when you say, let's debate these amendments and let's get them off the 
table, let's give 6 hours to debating these amendments, we are 
basically saying to the west coast ratepayers: We are giving you 1 hour 
for every billion dollars you were gouged by Enron and market 
manipulators.
  We can do better than that. We ought to be willing to give the 
American public at least an hour for every million dollars they paid in 
high energy costs that were part of manipulated contracts. I feel very 
fortunate that I have an hour tonight and that my colleagues from the 
west and I have 2 hours tomorrow to talk about this important issue. 
Frankly, the American people need to have their day in this body to 
debate fully whether we want to have changes to our consumer protection 
laws, whether this body, the Senate, is taking adequate measures to 
protect them from having another Enron crisis happen again, and whether 
our own regulators, the Federal Energy Regulatory Commission, are doing 
their job in protecting consumers.
  This debate we just had about the underlying Domenici substitute and 
the Bingaman amendment is about that, about whether we should allow for 
more of the free market or whether we should have more controls.
  My point to the American people is that we have a Federal Energy 
Regulatory Commission that has not done its job. The Federal Energy 
Regulatory Commission deserves an ``F'' when it comes to protecting 
consumers.
  Let me show what has happened in my home State of Washington, how 
consumers have been gouged by high electricity prices. Yes, we were the 
unfortunate State that got caught with

[[Page 20045]]

the second worst drought on record which meant our hydro system wasn't 
producing as much power as we needed it to produce. Consequently, what 
happened? Well, we had to go out on the spot market and buy 
electricity. When we went out to buy that electricity, we bought it at 
a time when California had gone through their deregulation and there 
were exorbitant prices, sometimes 300 times the price of electricity. 
Our utilities were forced to buy that power. Our consumers were forced 
to pay that price.
  You say: Well, that is an unfortunate circumstance of that time 
period and the fact that your State had a drought. I can tell you it 
wasn't all related to our State having a drought. What we have found 
since this time is these contracts were manipulated. Enron has said 
they were manipulated. The Department of Justice has said they have 
been manipulated. We have a Federal Energy Regulatory Commission 
report--that report is so voluminous, many pages--that basically 
documents all the different ways in which these contracts were 
manipulated.
  What is the result? The result of that has been in my home State of 
Washington we have had utilities that have ended up having increases in 
their rates. Down in southwest Washington, in the Vancouver area, there 
has been an 88 percent rate increase; in parts of King County, a 61 
percent rate increase; in Snohomish County, a 54 percent rate increase; 
over in eastern Washington, in Okanogan, one of the areas that is most 
economically hard pressed in our State, a 71 percent rate increase; 
over on the Olympic peninsula, a 43 percent rate increase.
  I ask my colleagues: Which States would be willing to put up with 
those kinds of rate increases, from an energy crisis where contracts 
have been manipulated, and say it is OK?
  The kicker in this situation is these aren't just rates for 1999. 
Because of this crisis and the manipulated contracts Enron has put 
forth, we are stuck with those high energy costs for the length of 
those Enron contracts. In fact, even though this report from a Federal 
agency says these contracts have been manipulated, and unjustly so, 
these utilities, particularly the one here in Snohomish County, have to 
pay this 54 percent rate increase for another 5 years. They are stuck 
paying these Enron contracts for 5 years.
  When the utility said: Why should we be paying this price? Why should 
we pay a contract that has been knowingly manipulated? Enron is suing 
them. Can you imagine that? Enron, who has admitted guilt in 
manipulating contracts, has the audacity to sue utilities in my State, 
forcing them to continue to pay these high rates.
  This debate is about whether we are going to get some relief. Somehow 
people think maybe there is a way this rate increase of 54 percent 
doesn't really impact people. If you think somehow this really isn't 
causing harm, I want to submit for the Record a New York Times article 
from December of 2002, just last December, where it showed we had more 
than 14,000 customers from that local utility in Snohomish County 
basically disconnected from their energy source because they couldn't 
pay.
  We saw a 44 percent increase in actual disconnections in Snohomish 
County because people could not afford to pay that 54 percent rate 
increase.
  I ask unanimous consent to print the article I referred to in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Dec. 22, 2002]

                   Legacy of Power Cost Manipulation

                           (By Timothy Egan)

       Everett, WA., Dec. 19.--Two years ago this month, a record 
     was set at the height of the West Coast energy crunch: an 
     hour of electric power was sold for $3,250--more than a 
     hundred times what the same small block had cost a year 
     earlier.
       Now, power supplies are abundant and wholesale prices have 
     plummeted. But the fallout from what state officials say was 
     the largest manipulation of the energy market in modern times 
     has continued to hit West Coast communities hard.
       Here in Snohomish County, which has the highest energy 
     rates in the state, more than 14,000 customers have had their 
     electricity shut off for lack of payment this year--a 44 
     percent increase over 2001. They have seen electric rate 
     increases of 50 percent, as the Snohomish County Public 
     Utility District struggles to pay for long-term power 
     contracts it signed with companies like Enron at the height 
     of the price run-up.
       Aided by charities, most customers have had their power 
     returned within a day of being shut off, but others are 
     forced to make choices about which necessities they can live 
     without. ``It's a pretty tough thing trying to explain to 
     your 5-year-old kid why the lights won't come on anymore,'' 
     said Crystal Faye of Everett. ``I didn't pay much attention 
     to all that stuff about California and Enron, but it's 
     certainly come home to hurt us now.''
       Ms. Faye and her husband, Rick, who are unemployed, have 
     had their power shut off twice this year. Brianne Dorsey, a 
     single mother, said she removed the baseboard heater in her 
     home here and has had to rely on a small wood stove for heat, 
     because she is $1,000 behind in paying her electric bills.
       Faced with such tales tied to rate increases along the West 
     Coast, states are trying to get back some of what they lost 
     during 18 months when energy prices seemed to have no 
     ceiling. The decision this month by a federal regulatory 
     judge that California utilities had been overcharged by $1.8 
     billion bolstered the case of Northwest utilities seeking 
     refunds, officials of those utilities said. It also angered 
     California officials, who say they will continue to press for 
     a total of nearly $9 billion in refunds. The Federal Energy 
     Regulatory Commission is expected to decide on Northwest 
     refunds in the spring.
       No matter what the federal government decides, officials 
     say their best hope for compensation is from a number of 
     criminal investigations being pursued by Nevada and the three 
     West Coast states--Washington, Oregon and California. They 
     liken their cause to state lawsuits against tobacco 
     companies, which started as long shots but resulted in 
     enormous settlements.
       Aided by a guilty plea in October from a former trader for 
     Enron, and by newly discovered internal documents describing 
     how companies manipulated the energy market in 2000 and 2001, 
     the West Coast states are hoping to get settlement money from 
     more than a dozen energy trading companies. The companies say 
     they acted legally in taking advantage of a unique market 
     condition, but state officials say the companies created a 
     fake energy crisis.
       At the height of the rise in energy costs in early 2001, 
     the Bush administration said the West Coast's troubles were a 
     precursor of what would happen if the nation did not build 
     1,900 power plants over the next 20 years. But state 
     officials in the hardest-hit areas say the crisis was never 
     about energy shortages so much as it was about an epic 
     transfer of wealth. They want payback--in some cases for 
     immediate relief to consumers who cannot pay their bills this 
     winter.
       Last month, the Williams Company, in Tulsa, Okla., agreed 
     to a $417 million settlement with Washington, Oregon and 
     California. While admitting no wrongdoing, Williams agreed to 
     pay refunds and other restitution to the three states; in 
     return, the states dropped an antitrust investigation. Among 
     large energy companies, the states are seeking refunds from 
     the Mirant Corporation, Reliant Resources Inc., Dynegy Inc., 
     Duke Energy and Enron.
       ``All of us on the West Coast have been hard hit by these 
     rate increases, but the poor in this county have just been 
     hammered,'' said Bill Beuscher, who runs the energy 
     assistance program in Snohomish County. Mr. Beuscher said 
     that in the first two weeks the winter energy assistance 
     program was open this year, requests for financial aid were 
     up 55 percent from the same period last year.
       The power trading companies named in criminal 
     investigations and refund cases did not want to comment 
     publicly while the cases were pending. But several of the 
     companies that are fighting refunds have said in their public 
     filings that the utilities, particularly in the Northwest, 
     are trying to renege on legitimate long-term contracts. They 
     said they did not act in collusion and explained that the 
     highest prices were a result of severe market shifts brought 
     in part by the Northwest drought.
       In some cases, the power trading companies said, the 
     utilities resisted buying shorter contracts, which would have 
     cost them less. They also said that some Northwest utilities 
     took advantage of the price spikes and sold power into the 
     market themselves, only to come up short later. The companies 
     said they expected to be vindicated when the government 
     finishes its refund cases next spring.
       Mr. Beuscher said he would like to see money from the 
     Williams settlement be used to help people who cannot afford 
     the rate increase. Consumers in Oregon and California have 
     made similar pleas. But officials in all three states say 
     that until there are larger settlements with the energy 
     companies, consumers are unlikely to see relief.
       ``We hope that the Williams case serves as a template,'' 
     said Tom Dresslar, a spokesman for the California attorney 
     general's office, ``because California was monumentally 
     ripped off by these energy traders.''
       About seven million consumers in California, who were 
     initially shielded from having to pay for runaway energy 
     costs during

[[Page 20046]]

     the worst part of the state's deregulation debacle, are 
     paying rate increases averaging 30 percent more than the pre-
     deregulation prices of 1996. The state has the highest energy 
     rates in the nation, consumer advocates say, although the 
     structure of the rate increase allows poor people and low 
     energy users to escape the recent increases.
       ``I don't hold out a lot of hope that we will ever get 
     significant refunds,'' said Doug Heller of the Foundation for 
     Taxpayer and Consumer Rights, a nonprofit group based in Los 
     Angeles. The group calculates that California power customers 
     overpaid a total of $70 billion.
       At the height of the energy troubles, the trading companies 
     boasted of record profits in their quarterly reports. But 
     many of those companies are now near bankruptcy as they cope 
     with a downturn that has caused the energy trading sector to 
     lose 80 percent of its value, according to Wall Street 
     analysts. ``It's like the highwayman robbed us and then spent 
     all the money on booze,'' Mr. Heller said.
       The companies themselves blame the states. In one case that 
     was heard this month, William A. Wise, chief executive of the 
     El Paso Corporation, which is based in Houston, denied 
     manipulating the market and blamed the officials who set up 
     California's deregulated energy market for causing the price 
     run-ups with ``one bad policy after another.''
       Under a New Deal-era law, power companies can be forced to 
     pay refunds if they have charged an ``unreasonable and 
     unjust'' amount for electricity. The Federal Energy 
     Regulatory Commission, which West Coast governors say did 
     very little to restrain power traders during the height of 
     the run-ups, will determine the exact refund amount, if any.
       In the meantime, electric rates throughout the Pacific 
     Northwest, once among the cheapest in the nation, have 
     climbed as much as 50 percent.
       California's problems stem from its chaotic attempt at 
     energy deregulation, approved in 1996 and put in effect in 
     1998. The Northwest, with its tradition of publicly owned 
     utilities, was drawn into the California crisis by a 
     convergence of dry weather and freewheeling trading of its 
     own.
       Usually, the Northwest avoids price fluctuations by 
     providing a steady stream of hydroelectric power, aided by 
     abundant winter rainfall. But in late 2000, a drought in the 
     Northwest forced utilities to buy power on the open market. 
     Some utilities had also tried to sell power into the 
     California market but were pinched by the drought.
       At the same time, major energy traders were withholding 
     blocks of power to create the appearance of further 
     shortages, according to Enron memorandums discovered this 
     year.
       Refunds were once thought to be unlikely. But then came the 
     memorandums--many of them detailing schemes to manipulate the 
     market under names like Death Star--and the agreement in 
     October by Timothy N. Belden, a former senior trader for 
     Enron, to plead guilty to conspiring with others to 
     manipulate the West Coast energy market.
       Prosecutors say Mr. Belden is cooperating with 
     investigations of the power trading companies.
       ``What really started the ball rolling were the smoking-gun 
     memos, and then the guilty plea has helped as well,'' said 
     Kevin Neely, a spokesman for the Oregon Department of 
     Justice.
       There is also continued bitterness among West Coast 
     officials toward the Bush administration for waiting until 
     June 2001 before putting price controls on the market, which 
     immediately ended the large price spikes and rolling 
     blackouts and brought stability.
       Since then, power use has fallen and prices on the short-
     term market are about where they were before the energy run-
     up of 2000 and 2001.
       ``It was a fallacy to blame this crisis on a lack of new 
     power plants,'' said Steven Klein, superintendent of Tacoma, 
     Wash.'s public utility, Tacoma Power. ``But it's a shame what 
     came of this. It put a dent in a lot of family budgets, and 
     forced some businesses to close.''

  Ms. CANTWELL. It is impacting people in my State. One of the largest 
employers in the State, the Boeing Company, has their major 
manufacturing base located in that particular county. In that county, 
they have made it clear they planned to build the next generation 
plane. They are not sure whether they are going to build that plane 
there or even in Washington State. What is on the list of issues about 
which they are concerned? The cost of energy, the high cost of energy. 
So again, individual ratepayers are suffering. Businesses are 
suffering. Businesses may decide the long-term investment in Washington 
State isn't worth it just because Enron manipulated contracts at a time 
my consumers and my businesses needed affordable electricity.
  We are here tonight to talk about this situation and what the Senate 
is going to do about it. It is clear we are not doing enough.
  I think there are newspapers all over the country who basically have 
said we are not doing enough about it. The New York Times said, ``This 
energy crisis dims small business hopes.'' This is an administration 
that wants to get the economy on the right track. How can you get the 
economy on the right track if you won't do anything about manipulated 
energy contracts? Basically, they say the ``perfect storm is creating a 
return of the energy crisis,'' and ``power cuts in the cold winter 
ahead for those struggling to pay for electricity.''
  Just like I said, in Snohomish County, with a 44 percent increase in 
disconnect notices and an energy crunch, the Northwest might face 
another power crisis. ``Costs hit home for the energy crisis'' is in 
the San Francisco Chronicle. Believe me, we are going to hear from my 
colleagues from California tomorrow about how this crisis has impacted 
them.
  Again, my colleagues on the other side of the aisle can spend as much 
time as they want talking about the need for future energy supply, 
which I am all for. About the fact that we should have been building 
more supply. That is fine. But you have to address the issue. The issue 
is these contracts were manipulated. They were schemed. The American 
people will come to know them by name--Get Shorty, Fat Boy, and a 
variety of others. That might seem humorous to some people, but it is 
not humorous when real people suffer the consequences. We are not doing 
enough about it.
  So what else have newspapers said? The shocking thing is they 
basically are saying what I think some of my colleagues, particularly 
on the other side of the aisle, want to deny. I am not sure exactly why 
they don't want to address it. But they say, ``Enron met with energy 
regulators during the crisis.'' ``Enron monitor failed to do the job.'' 
``Federal energy regulators inept,'' this says. ``Enron execs often 
called the FERC brass during crisis.''
  What is going on here is we have had this incredible lobbying effort 
by Enron in getting FERC commissioners and doing nothing about this 
crisis, and playing an overexcessive role. Now we have the choice as 
Members of the Senate as to whether we are going to stand up and do 
something about this.
  I am outraged and I have been outraged about this issue for some 
time, because I go home almost every weekend and I see the real 
consequences of this problem. But even that pales in comparison to the 
steps I think this body is going to mistakenly take if it passes the 
Domenici electricity title as it is.
  Mr. President, the Domenici electricity title as it is does nothing 
to protect consumers on power generation. The Domenici electricity 
title basically takes the only consumer protection law on the books--
the Public Utility Holding Company Act--and repeals it. The good 
Senator from New Mexico, Senator Bingaman, tried to say: ``Are you sure 
we want to do that because I don't think we should?''
  If you are going to change the oversight of these utilities, you 
ought to put some protections in place. When they do these mergers, 
maybe we ought to figure out a way that we have some oversight of this 
and protect it. We will have some other amendments--Senator Dayton's 
and some of mine--that say, listen, we cannot go far enough in 
protecting consumers. How could you go too far in protecting consumers 
when we have had one of the biggest energy schemes in our country's 
history just unfold in the last couple of years?
  I applaud this body for passing new accounting requirements. I 
applaud giving the SEC more to do on accountability, making sure that 
books are not cooked, that schemes are not put into place. I applaud 
the Attorney General from New York for his aggressive action in making 
sure that those who have been participating from the financial side in 
helping to portray to the American people that somehow these companies 
were healthy, when in fact all they were deploying were buying-and-
selling schemes with inflated pricing. I applaud all of that. But what 
this bill fails to do is take a similar step. It fails to take a 
similar step because it is

[[Page 20047]]

repealing the only consumer protection bill we have for electricity.
  So how did we get there? Some of my colleagues mentioned the Federal 
Power Act and the Public Utility Holding Company Act of 1935. During 
the Roosevelt era, guess what? We saw the same thing. No surprise. A 
bunch of energy companies had total control of the market, created a 
pyramid scheme, jacked up the price on consumers. Guess what? The 
Roosevelt administration said: We cannot tolerate this. Consumers need 
to be protected.
  So 1935 might seem like a long time ago to some of my colleagues, but 
I know one thing--too much concentration of power by a free market does 
not deliver affordable energy.
  My State is a big believer in cost-based pricing. We have a lot of 
public power. That public power provides us with affordable energy. I 
am not opposed to market-based rates. I am not opposed to the free 
enterprise system. As a former businesswoman, I like the marketplace 
where businesses can compete and where competition exists, where 
anybody gets nervous when there is too much consolidation and when 
there is no oversight.
  So, basically, what we have here in the last 2 years is more of a 
move toward market-based pricing, without the regulatory oversight. I 
would love to hear from my colleagues on the other side of the aisle 
who think State utility commissions don't have a responsible role in 
making sure that utility rates are not too high and too expensive. I 
would love to hear from my colleagues that somehow they don't think the 
Federal Government should play a role in wholesale rates and in 
assuring consumers that wholesale rates are just and reasonable. But I 
can tell you this. There is nothing just and reasonable about 
manipulating contracts. Even Patrick Wood, chairman of the Federal 
Energy Regulatory Commission, said so before the Energy Committee:

       ``Yes, that is right, Senator Cantwell, contracts that have 
     been manipulated cannot be just and reasonable.''

  So why don't we do something about taking the Federal Energy 
Regulatory Commission and strengthening it? Why don't we smack them on 
the hand and say actually you have not done your job, because if you 
want to go through the sequencing--the issue is that in this timeframe 
of the explosion of the California market and the crisis and the 
problem, what happened is prices rose to that exorbitant 300 percent 
increase. We all started saying we need to do something about this; we 
need to have some sort of price cap or price mitigation.
  In fact, my predecessor, Slade Gorton, and several other Senators, 
actually wrote letters saying we need to do something about this energy 
crisis. The former Energy Secretary, now the Governor of New Mexico, 
also said we have to do something to stop this manipulation of pricing.
  The prices actually started unfolding in May of 2000 even though a 
variety of people said there is important business to do here. 
Secretary Richardson, in December of 2000, 4 or 5 months later, said 
this is an emergency and we need to do something about it.
  The next day FERC basically decides they are going to deny a request 
to do anything about capping the prices. They are not going to do 
anything! It took the outrage of many Members of Congress, and almost a 
year later when a bipartisan group of Senators introduced a bill to put 
on price caps that in April of 2001 the Federal Energy Regulatory 
Commission finally responded and said: Oh, yes, these prices are 
outrageous, and we should do something about them.
  Mind you, all of us were saying during that time period that these 
contracts have been manipulated. They have been manipulated, and it is 
not fair. Our ratepayers should not have to pay these exorbitant 
prices. At that time, people were saying: This is just about supply, 
and if you guys built more supply, you would not have a problem. We 
have come to find out that it is not all about supply. It is about 
those manipulated contracts.
  What happened is we finally heard from the source itself: Enron 
declaring bankruptcy, an investigation of potential energy market 
manipulations, and then finally, in March of 2003, FERC issuing this 
report saying the prices have been manipulated.
  We had to drag that Federal entity kicking and screaming into the 
realization that, one, the prices were too high; two, that consumers in 
the West absolutely needed relief; and three, that these prices have 
been manipulated. Now we are trying to drag them into the realization 
that manipulated contracts that cost ratepayers 54-, 77-, 80-percent 
increases over the next 5 or 6 years are hardly just and reasonable or 
hardly in the public's interest.
  The underlying Domenici amendment says: Go ahead and trust these FERC 
people; they are doing a good job; and let's take away any of those 
basic tools they have to regulate this industry.
  I am surprised that some of my colleagues have not said: Let's just 
do away with FERC and deal with the Power Act. We would be better going 
to court and having the courts decide in our favor than having a 
regulatory entity that fails to do its job. But I know this: tonight 
and tomorrow we should not be talking about repealing the Public 
Utility Holding Company Act. We should not be doing that.
  PUHCA really does hold companies accountable for their business 
service to retail customers. It gives the SEC the authority to review 
these mergers and put a prohibition on acquisitions if they do not 
think there is evidence that we are going to have efficient rates. It 
makes sure they review the complex corporate structures. It makes sure 
that these companies do not exploit the consumer. It really did give 
the SEC the ability to regulate pyramid schemes that were based on 
fictitious or unsound value assets that had no relationship to fair 
sums of what was being invested and how much the company was worth. It 
is amazing, that was a 1935 act. I guess history really does repeat 
itself because these are the same abuses we have seen in the Enron 
situation.
  Remember the maze of affiliates and offshore partnerships that were 
part of the Enron scheme? Remember Enron's diversification into 
businesses as far afield as trading of weather derivatives and water 
supply? Remember how Enron inflated their stock price and then it 
collapsed? It created such a gaping hole for individuals that they 
ended up losing their entire investment for retirement because of the 
collapse.
  I can tell you this: We do not want to repeal PUHCA. What we want to 
do is have some further securities put in place. Some of those 
securities need to respond to these various schemes that have been 
perpetrated on the American consumer.
  If we could see some of those schemes, I think the American public 
would be shocked to know that someone actually spent their time 
thinking up schemes in which the market could be manipulated.
  I even have an article that Enron's Ken Lay admitted that he had gone 
to the then-current FERC Commissioner and said: If you continue to help 
us on this scheme, then we will continue to support you for the 
renomination of FERC. I guess Mr. Hebert was not quite so supportive 
because he was not renominated to that post. I ask unanimous consent 
that this article be printed in the Record.
  The being no objection, the material was ordered to be printed in the 
Record, as follows:

                [From the New York Times, May 25, 2001]

          Power Trader Tied to Bush Finds Washington All Ears

                   (By Lowell Bergman and Jeff Gerth)

       Curtis Hebert Jr., Washington's top electricity regulator, 
     said he had barely settled into his new job this year when he 
     had an unsettling telephone conversion with Kenneth L. Lay, 
     the head of the nation's largest electricity trader, the 
     Enron Corporation.
       Mr. Hebert, chairman of the Federal Energy Regulatory 
     Commission, said that Mr. Lay, a close friend of President 
     Bush's, offered him a deal: If he changed his views on 
     electricity deregulation, Enron would continue to support him 
     in his new job.
       Mr. Hebert (pronounced A-bear) recalled that Mr. Lay 
     prodded him to back a national push for retail competition in 
     the energy business and a faster pace in opening up access to 
     the electricity transmission grid to companies like Enron.

[[Page 20048]]

       Mr. Hebert said he refused the offer. ``I was offended,'' 
     he recalled, though he said he knew of Mr. Lay's influence in 
     Washington and thought the refusal could put his job in 
     jeopardy.
       Asked about the conversation, Mr. Lay praised Mr. Hebert, 
     but recalled it differently. ``I remember him requesting'' 
     Enron's support at the White House, he said of Mr. Hebert. 
     Mr. Lay said he had ``very possibly'' discussed issues 
     relating to the commission's authority over access to the 
     grid.
       As to Mr. Hebert's job, Mr. Lay said he told the chairman 
     that ``the final decision on this was going to be the 
     president's, certainly not ours.''
       Though the accounts of the discussion differ, that it took 
     place at all illustrates Enron's considerable influence in 
     Washington, especially at the commission, the agency 
     authorized to ensure fair prices in the nation's wholesale 
     electricity and natural gas markets, Enron's main business.
       Mr. Lay has been one of Mr. Bush's largest campaign 
     contributors, and no other energy company gave more money to 
     Republican causes last year than Enron.
       And it appears that Mr. Hebert may soon be replaced as the 
     commission's chairman, according to Vice President Dick 
     Cheney, the Bush administration's point man on energy policy.
       Mr. Lay has weighed in on candidates for other commission 
     posts, supplying President Bush's chief personnel adviser 
     with a list of preferred candidates. One Florida utility 
     regulator who hoped for but did not receive an appointment as 
     a commissioner said he had been ``interviewed'' by Mr. Lay.
       Mr. Lay also had access to the team writing the White 
     House's energy report, which embraces several initiatives and 
     issues dear to Enron.
       The report's recommendations include finding ways to give 
     the federal government more power over electricity 
     transmission networks, a longtime goal of the company that 
     was spelled out in a memorandum Mr. Lay discussed during a 
     30-minute meeting earlier this spring with Mr. Cheney.
       Mr. Cheney's report includes much of what Mr. Lay advocated 
     during their meeting, documents show. Both men deny 
     discussing commission personnel issues during their talk. But 
     Mr. Lay had an unusual opportunity to make his case about 
     candidates in writing and in person to Mr. Bush's personnel 
     adviser, Clay Johnson. And when Mr. Bush picked nominees to 
     fill two vacant Republican slots on the five-member 
     commission, they both had the backing of Enron, as well as 
     other companies.
       Mr. Lay is not shy about voicing his opinion or flexing his 
     political muscle. He has transformed the Houston-based Enron 
     from a sleepy natural-gas company into a $100 billion energy 
     giant with global reach, trading electricity in all corners 
     of the world and owning a multibillion-dollar power project 
     in India. He has also led the push to deregulate the nation's 
     electricity markets.
       Senior Bush administration officials said they welcomed Mr. 
     Lay's input but did not always embrace it: President Bush 
     backed away from curbing carbon-dioxide emissions, an effort 
     supported by Enron, which had looked to trade emission rights 
     as part of its energy business.
       ``We'll make decisions based on what we think makes sound 
     public policy,'' Mr. Cheney said in an interview, not what 
     ``Enron thinks.''
       The Bush-Lay bond traces back to Mr. Bush's father and 
     involves a personal and philosophical affinity. Moreover, 
     Enron and its executives gave $2.4 million to federal 
     candidates in the last election, more than any other energy 
     company. While some of that went to Democrats, 72 percent 
     went to Republicans, according to an analysis of election 
     records by the Center for Responsive Politics, a nonprofit 
     group.
       ``He's for a lot of things we're for,'' said Mr. Johnson.
       But when it came to deciding on nominees for the 
     commission, Mr. Johnson said that Mr. Lay's views were not 
     that crucial. The two most important advisers, he said, were 
     Andrew Lundquist, the director of Mr. Cheney's energy task 
     force, and Pat Wood 3rd, the head of the Texas public utility 
     commission.
       As governor, Mr. Bush named Mr. Wood to the utility 
     commission. This year, when the White House filled the two 
     Republican slots on the federal agency, Mr. Wood was the 
     first choice, Mr. Johnson said.
       Consumer advocates and business executives praise Mr. Wood. 
     But Mr. Lay also had a role in promoting him. Shortly after 
     Mr. Bush was elected governor in 1994, Mr. Lay sent him a 
     letter endorsing Mr. Wood as the ``best qualified'' person 
     for the Texas commission.
       In all, there are five seats on the commission, two held by 
     Republicans, two by Democrats and one held by a chairman who 
     serves at the pleasure of the president. Mr. Hebert, who 
     became a commissioner in 1997, was named chairman by Mr. Bush 
     in January.
       The Federal Energy Regulatory Commission's mandate to 
     ensure fair prices in wholesale electricity and natural gas 
     markets makes it crucial to sellers like Enron as well as 
     consumers.
       The movement toward deregulation sometimes leaves the 
     commission caught in a tug of war: power marketers like Enron 
     are trying to break into markets and grids controlled by old-
     line utilities, which operate under state regulation. The 
     commission's chairman has considerable latitude in setting 
     its agenda.
       As part of its oversight of the wholesale electricity 
     markets, the commission ordered several companies to refund 
     what it considered excessively high prices this year in 
     California. One lesser offender named in the commission's 
     public filings--$3.2 million, of a total of $125 million--was 
     an Enron subsidiary in Oregon.
       Enron owns few generating assets, but buys and sells 
     electricity in the market. Many of those transactions 
     resemble the complicated risk-shifting techniques used by 
     Wall Street for financial instruments.
       Mr. Hebert, after he became chairman, initiated an 
     examination into the effects those techniques have on the 
     electricity markets. ``One of our problems is that we do not 
     have the expertise to truly unravel the complex arbitrage 
     activities of a company like Enron,'' he said, adding, 
     ``we're trying to do it now, and we may have some results 
     soon.''
       William L. Massey, one of the agency's two democratic 
     commissioners, said he supported the inquiry but had not been 
     aware of it--an indication of the chairman's ability to set 
     the commission's agenda.
       Finally, the commission is trying to speed the pace of 
     electricity deregulation by opening up the nation's 
     transmission grid, much of which is owned by privately owned 
     utilities that enjoy retail monopolies. Some Enron officials 
     say the commission has been moving too slowly to open the 
     grid. They attribute some of the problem to utilities. But 
     they also fault Mr. Hebert.
       ``Hebert still has undeserved confidence in some of the 
     vertically integrated companies coming to the table and 
     dealing openly'' with transmission access issues, said 
     Richard S. Shapiro, an Enron senior vice president.
       The utilities, however, maintain that they provide cheap 
     and reliable service for their customers. Washington 
     lobbyists for one Southern utility said that Enron was really 
     interested in focusing on the utility's big-business clients, 
     which under state regulation pay higher rates than 
     residential customers.
       Since 1996, about half the states have moved to open their 
     retail markets to competition, and the commission has begun 
     to make it easier for outsiders to use the nation's 
     transmission grid. But the promise of cheaper rates has been 
     largely unfulfilled. So the push for more deregulation, in 
     which Enron has been a leader, has slowed, especially when 
     California's flawed program led to skyrocketing rates and 
     chaotic markets.
       Mr. Hebert is a free-market conservative who favors 
     deregulation but also recognizes the importance of state's 
     rights. A former Mississippi regulator, he is a protege of 
     Trent Lott, the Senate Republican leader from Mississippi. 
     Mr. Hebert said Mr. Lott was instrumental in his nomination 
     to the commission in 1997 by President Clinton.
       President Bush elevated Mr. Hebert to chairman on 
     Inauguration Day, a move Mr. Lay said he told the White House 
     he supported.
       Mr. Johnson, the White House personnel chief, said that Mr. 
     Lott and Mr. Hebert had both been told that Mr. Hebert could 
     remain
      chairman at least until the administration's nominees--Mr. 
     Wood and Nora Brownell, a Pennsylvania utility regulator--are 
     confirmed by the full Senate. The Senate energy committee 
     voted earlier this week to approve the two nominees, after a 
     hearing last week indicated strong support.
       It is widely expected that President Bush will name Mr. 
     Wood to replace Mr. Hebert as chairman after the Senate acts.
       In an interview for a forthcoming episode of ``Frontline,'' 
     the PBS series, Mr. Cheney suggested as much. ``Pat Wood's 
     got to be the new chairman of the F.E.R.C., and he'll have to 
     address'' various problems in the electricity markets, he 
     said.
       Mr. Hebert said that no one had told him he was being 
     replaced. If someone else is named chairman, Mr. Hebert can 
     remain a commissioner until the end of his term, which 
     expires in 2004.
       It was a few weeks after President Bush made him chairman 
     Mr. Hebert said he spoke by telephone with Mr. Lay.
       Mr. Lay told him that ``he and Enron would like to support 
     me as chairman, but we would have to agree on principles'' 
     involving the commission's role in expanding electricity 
     competition, Mr. Hebert said of the conversation.
       A senior commission official who was in Hebert's office 
     during the conversation said Mr. Hebert rebuffed Mr. Lay's 
     offer of a quid pro quo. The official said that he heard Mr. 
     Hebert's side of the conversation and then, after the call 
     ended, learned the rest from him.
       Mr. Hebert said that he, too, backed competition but did 
     not think the commission had the legal authority to tell 
     states what to do in this area. Concerning the issue of 
     opening transmission access through the creation of regional 
     networks, Mr. Hebert supports a voluntary process while Enron 
     seeks a faster and more compulsory system.
       Mr. Lay said that while he might have discussed issues 
     relating to the commission's

[[Page 20049]]

     authority concerning access to the grid, ``there was never 
     any intent'' to link that or any other issue to Mr. Hebert's 
     job status.
       The commission is a quasijudicial agency, so decision-
     makers like Mr. Hebert must avoid private discussions about 
     specific matters pending before the commission. Mr. Hebert 
     and Mr. Lay both said that line was not crossed, but Mr. 
     Hebert said he had never had such a blunt talk with an 
     energy-industry executive.
       Mr. Lay added that his few recent conversations with Mr. 
     Hebert were nothing special. ``We had a lot of access during 
     the Clinton administration,'' he said.
       And he said that while making political contributions 
     ``probably helps'' to gain access to an official, he made 
     them ``because I'm supporting candidates I strongly believe 
     in.''
       Last June, Enron executives were asked to make voluntary 
     donations to the company's political action committee. The 
     solicitation letter noted that the company faced a range of 
     governmental issues, including electricity deregulation.
       This year, some people who sought but did not get 
     nominations to the commission said that Mr. Lay and Enron had 
     had a role in the process.
       One was Joe Garcia, a former Florida utilities regulator 
     and prominent Cuban-American activist. He said he had been 
     ``interviewed'' by a few Enron officials, including Mr. Lay, 
     who he said had not been as ``forceful or insistent'' as the 
     other Enron officials.
       But in their conversation, Mr. Garcia said, Mr. Lay made 
     clear that he would be visiting the White House, adding that 
     ``everyone knew of his relationship and his importance.''
       Mr. Johnson, the White House personnel chief, could not 
     cite another company besides Enron that sent him a list of 
     preferred candidates for the commission, but he remembered 
     hearing the views of Tom Kuhn, who heads the utility industry 
     trade group, the Edison Electric Institute. Mr. Kuhn was a 
     classmate of Mr. Johnson and Mr. Bush at Yale.
       As for his conversation with Mr. Garcia, Mr. Lay said he 
     was comfortable with his candidacy but ``I'm not sure what I 
     told him about my friends at the White House.''
       This article is part of a joint reporting project with the 
     PBS series ``Frontline,'' which will broadcast a documentary 
     about California's energy crisis on June 5.

  Ms. CANTWELL. Mr. President, what are these schemes that were 
perpetrated on ratepayers in the West?
  Get Shorty is a scheme that individuals may have read about in the 
paper, or maybe some individuals know from being in California or 
hearing parts of what happened in Washington State or Oregon. I thought 
it was the title of a movie. I did not know it was a clever marketing 
tool presented by a bunch of executives at an energy company to 
manipulate the prices so my ratepayers might pay more. I could not 
believe something like that would happen.
  Another scheme that was part of the process is Load Shift, another 
way in which the individual consumer did not understand that some 
trading was going on with the price, and yet prices could be inflated 
and because, again, we had a shortage and had to go out and buy on the 
spot market, we were trapped at buying at that high rate.
  There is another attempt to defraud consumers known as the Silver 
Peak Incident. Silver Peak refers to a major transmission line in 
California but is outlined in an internal Enron e-mail that was made 
public by the FERC investigation. It is also synonymous with a scheme 
that was concocted by the Enron chief trader of the West who has since 
pled guilty to charges of conspiracy to commit fraud, Mr. Tim Belden, 
and on May 25, 1999, Mr. Belden filed 2,900 megawatts of an offer to 
sell within the California PX, the transmission line that could carry 
only 17 megawatts of power.
  So the California PX and ISO did, in fact, detect that there was an 
anomaly. They ended up raising the price 71 percent that day, and 
eventually Enron and the PX reached a settlement in which the company 
paid a $25,000 fine. It shows the kinds of problems that are in these 
various schemes, Fat Boy, also known as Icing Load, basically into 
realtime power markets. According to a smoking gun memo that Enron had 
issued on December 6 and December 8, Fat Boy was one of the most 
fundamental strategies used by traders. According to one trader, it is 
one of the oldest tricks in the book. It is now being used by other 
market participants.
  I want to read to my colleagues how Enron's own attorney described 
Fat Boy, but first remember how the market worked. It was the job of 
the California system to balance the supply and demand within 
California's transmission, and that required market participants to 
submit schedules of how much power they planned ahead of time. Given 
that there are various fluctuations because of weather and the demand 
that consumers have, it was simply a fact of life that marketers and 
utilities were not able to forecast to the exact megawatt the precise 
amount that would be needed.
  Thus, in order to ensure that the lights stayed on, the ISO would 
offer payments to utilities that would increase their generation in 
realtime in order to make sure that supply and demand matched up. So to 
take advantage of the situation, Enron would anticipate when the market 
was going to be short on supply. It would then submit a false day-ahead 
schedule loading the lines with generation it knew it had no intention 
of really using. That way, when it accessed the portion of power it put 
on the realtime grid, it would receive extra payments from the ISOs in 
keeping the lights on. That is right. By falsifying its day-ahead 
schedules, Enron received untold millions for pretending to keep the 
lights on in the West. I can assure my colleagues that is a very cruel 
joke to play on consumers in the West.
  So what we have before us in the Domenici amendment is a failure to 
protect consumers in the repeal of PUHCA and in the continuation of not 
outlawing these very practices that Enron has deployed. What we want to 
do is take all these schemes and include them in an amendment that I 
will lay down tomorrow that basically bans market manipulation. Yes, I 
would like to see us adopt the Dayton amendment that keeps the 1935 law 
on the books. Because, yes, left alone, energy marketers have shown 
that even after 70-plus years, they can recreate the same types of 
market manipulation. So we need to have protections in place.
  Round-trip trading is not the only thing that needs to be addressed 
in this bill in addition to PUHCA. What needs to be addressed, besides 
protecting the Public Utility Holding Company Act and keeping that on 
the books, and besides saying that round-trip trading is a problem, we 
also need to make sure these various other schemes, the Wheel Out 
scheme--I do not know who the marketing person was who thought of these 
themes. I am amazed--the Black Widow scheme, the Cuddly Bear scheme, 
the Red Congo scheme--people can see we are having a tough time getting 
all of these charts up here because there were so many schemes of 
manipulation, basically undertaken by a variety of individuals who 
thought this was a great idea to make money--the INC-ing scheme and the 
Non-Firm Export scheme.
  The amendment I will lay down tomorrow says all of these 
manipulations, not just on day-trip trading but all of these practices 
are illegal; that the Senate will not put up with market manipulation; 
that the Senate has seen, not just on the Democratic side of the aisle 
but the Republican side of the aisle--I want my Republican colleagues 
to join with us tomorrow and say that market manipulation is wrong--
that it is wrong and we believe we need stronger consumer protections; 
that we think the Federal Energy Regulatory Commission should be given 
the powers to make sure we are protected from these schemes; that we 
have done our job from the Enron crisis, where we have learned that we 
need to do a better job on accounting practices; that we have learned 
that we need to do a better job on requirements of the SEC and, yes, we 
in the Senate understand that energy prices can be manipulated and we 
are going to do a better job of making sure the tools stay in place to 
protect consumers. That new enhancements to those tools prohibit these 
kinds of schemes from ever happening again.
  As painful as this crisis has been for Washington State and for the 
West, this particular amendment I am offering is really about our next 
steps moving forward. It is about natural gas pricing. It is about the 
future manipulation that could happen if we do not put protections in 
place. It is about

[[Page 20050]]

saying that we want to make sure, as we continue towards a diversified 
energy plan for our country, getting more natural gas from Alaska with 
a new pipeline, looking at renewable energy, looking at conservation, 
looking at all sorts of alternative fuels, planning for the hydrogen 
fuel economy, that while we are doing all of those things, we are going 
to make sure market manipulation does not take place. That is what is 
at stake with the amendments we are going to be voting on tomorrow.
  Mine will not be the only amendment. As I have mentioned several 
times, Senator Dayton has a great amendment in which he says we should 
leave the Public Utility Holding Company Act in place. I am trying to 
stop these marketing schemes from being foiled on other States and 
other economies. I am trying to say the billion-plus that was lost in 
Washington State and the over $3 billion that was lost in California is 
economic havoc that should never happen again to another State in this 
country.
  To do that, we have to pass the Cantwell amendment that says these 
market manipulations are outlawed. That is what we are going to try to 
do tomorrow. I hope my colleagues will take the time tonight to 
understand this.
  I point out my colleagues have talked about this Energy bill and the 
various aspects of that Energy bill in a way that would leave most 
thinking these are simple issues and we should basically dispense with 
them quickly. As I said, $6 billion to the west coast economy--and that 
is just the costs of additional power that we have had to buy at higher 
rates; that is not the ancillary costs of other businesses who have had 
to shut down.
  We have had a paper company in Everett, WA, threaten if we have one 
additional rate increase of even a couple percentages, they will 
probably have to shut down that facility. We have had aluminum plants 
throughout the State of Washington that had to shut down for periods of 
time. If we have another rate increase they could be shut down 
permanently. We are talking thousands of jobs. We have had other 
industries say they do not think they could survive another rate 
increase.
  It is hard when we have challenges to not say we should have a rate 
increase. My response is, why can't we get out of these long-term 
contracts by Enron? Why can't we renegotiate what have been manipulated 
costs we in Washington have had to pay for? When I think of what has 
happened to Washington State, we are talking about more than $6 
billion. We owe it to people to have a debate about these issues.
  I plan to offer several other amendments. It is incredible we allow 
big companies such as Enron to lobby for and to support the nomination 
of these FERC commissioners. Why should a big company like Enron get to 
influence the administration on who should chair a regulatory entity 
whose job is to regulate that very entity that is pushing their 
nomination? I will have an amendment about that.
  I think the Federal Energy Regulatory Commission which engages in 15 
calls with Wall Street to tell them when and how they are going to make 
decisions on these contracts and whether they are just and reasonable. 
I don't see why we should have a Federal Energy Regulatory Commission 
that spends its time telling Wall Street in advance whether they should 
try to settle manipulated contracts out of court with clients. I don't 
think that is their job.
  We ought to have more protection on cost-based pricing than we have. 
We will have other amendments that try to address this issue about what 
we do about the fact that this voluminous report by the Federal Energy 
Regulatory Commission says all these contracts have been manipulated. 
Yet they fail to do nothing about it when the Federal Power Act says it 
is the commission's job to do something about unjust and unreasonable 
rates. That is what the Federal statute gave the authority to FERC to 
do, to make sure on wholesale rates the consumer was not gouged with 
unjust and unreasonable rates.
  Now we have a Federal entity saying, yes, they certainly are 
manipulated contracts. These schemes are unbelievable, but we are not 
going to do anything as regulators to help the ratepayers out of this 
situation. We will have an amendment addressing the failure of FERC to 
do anything about these manipulated contracts.
  Some of my other colleagues will have amendments dealing with this 
section. I don't know whether Senator Feinstein will offer her 
amendment on derivatives but, again, that is another loophole Enron 
walked itself through by coming to Congress and lobbying for an 
exemption to the Futures Commodities Trading Act. They said online 
trades ought to be exempt. That was very smart of them to get that 
loophole. Why? Because then all online trading, that some of these 
schemes are the names for, was completed online where prices were 
manipulated in trades, inflated, and consumers ended up paying the 
higher price.
  They get the derivatives loophole in the futures commodity. We say in 
America you can trade futures on corn and a variety of other 
agriculture products but you have to have open books. You have to have 
transparency. You have to show what you are actually doing so that if 
there is some sort of manipulation of the market you can come in and 
see what that manipulation is, a regulator can investigate.
  But no, this body, several years ago, probably unknowing as to the 
unbelievable impact, said, let's go ahead and give them this exemption.
  We found that a loophole big enough to drive a truck through--I 
should say big enough to drive billions of dollars through; that gouged 
consumers. I hope Senator Feinstein will offer her derivatives 
amendment, which I cosponsor, to close that loophole.
  Some of my colleagues say, we voted on that already; it failed. I ask 
my colleagues, we voted on that amendment before we knew of all these 
schemes about manipulation. Now we know these schemes and manipulation 
have happened and we are not going to try to do something to close 
those loopholes? It is something we need to bring front and center to 
the American people, demonstrating we here are doing our job. We are 
doing enough to get something done.
  I have letters from various constituents through the West who 
chronicled events that have happened to them, individuals who have 
either sent E-mails, letters or various documentations about the 
problems they have seen in the energy market. The various costs they 
have endured paying for additional electricity, which then meant they 
had to make other choices. I know people that not only were part of 
that 44 percent increase in disconnect rates. People who had to make 
other choices about education, about vacations, including a sad story 
from a woman who could not even send her daughter to the prom because 
she could not afford to buy a dress because that money went to their 
energy bill instead.
  What it comes down to tomorrow is whether we are going to allow this 
manipulation of Fat Boy, Get Shorty, Ricochet, Death Star, which the 
Domenici amendment is silent on. Whether we are going to take a vote to 
say that market manipulation is wrong.
  What are we going to say to ratepayers who had to pay 88 percent 
increases, 61 percent increases, 54 percent increases, 71 percent 
increases, 43 percent increases? Again, these aren't increases for 1 
year, these are increases that my ratepayers are stuck with. They are 
stuck with them because they signed an Enron contract and because we 
have a Federal Energy Regulatory Commission that basically says: Yes, 
they have been manipulated, but we don't care, you still have to pay 
that rate.
  I do not want this to happen to other parts of the country. I don't 
want to see economies like the Northwest economy, or the west coast 
economy, which is a critical part of our Nation's economy, suffer the 
consequences of manipulation of energy prices. The American people, to 
whom I have to answer when I go home to Washington State, or in other 
parts of the country if I travel, say to me: How come I am stuck with 
an 88 percent rate increase? How come I am stuck with a 61 percent rate 
increase? How come I am losing my job because our company can't afford 
the

[[Page 20051]]

high electricity costs? or, How come my school district is paying high 
electricity rates and we have to pay a higher tuition? How come our 
school district is asking for a levy because we have higher electricity 
rates? People are not even taking action on giving us relief.
  We will come back at this body on what we should do about past bad 
actions. But what we need to do tomorrow on the Cantwell market 
manipulation amendment is say that market manipulation of energy prices 
is wrong and that an energy title that fails to address these issues is 
not satisfactory.
  I could take the last few minutes I have tonight, of my 1 hour, and 
tell you six or seven things that are also wrong with the Domenici 
electricity title. There are lots of schemes in there that run towards 
a market-based system on regional transmission organization and 
standard market design that I know my colleagues from the South and 
parts of the West probably are not too anxious to hear about, aren't 
too excited that I put in play. The Domenici amendment is a step closer 
to that.
  Why do they want more of a free market? Because they want to see 
having that free market without the regulatory aspects of the Public 
Utility Holding Company Act, or having oversight of mergers, or having 
these kinds of hammers making sure no manipulation takes place. They 
want to see how much further prices can be manipulated. They want to 
see how they can have a free rein on what really is a needed utility 
for the American people.
  I think, regarding those RTO and standard market design schemes that 
are also part of the Domenici underlying amendment, it is the 
absolutely wrong time to be talking about moving towards more change. 
We have just had this crisis. My State is still paying for this crisis. 
We are going to still be paying for it for years.
  I understand the President is coming to the Northwest in August. I 
hope the President has an answer for why his administration, and the 
Federal Energy Regulatory Commission, have not dealt with this issue. I 
hope he has an answer, to say to ratepayers why we should continue to 
be gouged on this issue; why we in the West, even though contracts have 
been manipulated, still have to pay those prices.
  I would say to him: Mr. President, Washington State has a bright 
future. It still has a software economy. It still has an aerospace 
industry. Yes, it has been challenged, but it is still strong. We have 
a burgeoning biotech industry. We have a huge trade community. We have 
a vibrant, diverse agricultural economy throughout our State. But none 
of those can continue to exist with exorbitant energy prices that have 
been manipulated.
  I hope when he comes to Washington State, he has an answer. I can 
tell you right now, that answer will not be well received if it is 
about just creating more supply. We are all for creating more supply in 
Washington State, and we are all for diversifying, but we are not for 
market manipulation.
  We have to think through these other aspects of the Domenici 
amendment on RTOs, regional transmission organizations, standard market 
design and the other elements that really do call into question our 
ability to regulate the cost of electricity, for which the American 
people count on us. I hate to think, after 70 years of having a similar 
pyramid scheme push us into having the Public Utility Holding Company 
Act, that somehow this body will not get the message. Instead of just 
dealing with this crisis that we have dealt with in electricity--maybe 
not next year, maybe not in 5 years, but 7 years down the road--we end 
up having a similar crisis with natural gas, and, instead of just 
affecting the west coast and Washington ratepayers, it impacts the 
whole country.
  Fair energy prices are part of having a healthy economy. Affordable 
energy prices help to continue to stimulate economic growth. But 
manipulated energy prices are not just. They are not reasonable. They 
are not in the public interest. This body ought to take strong action 
against them.
  I know my colleagues all care about this issue. We wanted to do the 
right thing on securities law. We wanted to do the right thing on 
accounting law. It is time, with the Cantwell amendment tomorrow, to do 
the right thing on making sure that energy market manipulation is 
prevented and does not happen again.
  I yield the floor.
  Mr. McCONNELL. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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