[Congressional Record (Bound Edition), Volume 150 (2004), Part 12]
[Senate]
[Pages 15657-15661]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           ENERGY RELIABILITY

  Ms. CANTWELL. Madam President, I rise this morning to talk about our 
legislative priorities, and something I think this body needs to 
address before we adjourn next week. It is the issue of the reliability 
standards for our electricity grid and the fact that I think we are 
still putting the grid in jeopardy by not adopting reliability 
standards.
  Even Enron activities in California, by its own admissions, 
jeopardized the reliability of the western electricity grid. That is 
certainly unacceptable. We need to have in place rules that explicitly 
ban market manipulation and rules that make reliability standards 
mandatory and enforceable.
  In the documentation that has now been acquired through the Enron 
task force, federal agencies and organizations such as the Snohomish 
County Public Utility District, which is trying to get out of lawsuits 
and manipulated contracts that Enron is pursuing against it, it became 
clear that Enron continued to manipulate the market until its 
bankruptcy. Even in one scheme, called Get Shorty, Enron discussed in 
detail, and I quote from their comments and documents:

       This [Get Shorty] is obviously a sensitive issue because of 
     reliability concerns. It would be difficult to justify our 
     position if the lights go out because ancillary services were 
     not available. The reason these services were not available 
     is because we were selling them without actually having them 
     in the first place.

  In the Enron documentation and memos shared among various employees 
in the company about ways to scheme and make more money, they very well 
knew they were manipulating the market. They did not have these 
services, but sold them anyway at a higher cost, and thereby 
jeopardizing reliability.
  Another summer is upon us and we have yet to take action on 
legislation that would move us forward in ensuring the integrity of the 
electricity grid by protecting consumers from these market manipulation 
schemes and putting regulatory standards in place for reliability.
  Next month, in fact, will mark the first anniversary of the blackout 
in the Northeast and the Midwest that caused basically 50 million 
consumers and businesses in the Northeast and Midwest to lose power. In 
some cases that power was lost up to 4 days.
  That blackout could have been avoided. When you think about not just 
the inconvenience to consumers but the fact it cost our economy $4 to 
$10 billion as a loss of economic activity, it is outrageous we are not 
stepping up and passing electricity reliability standards legislation 
as a stand-alone bill before we recess for the summer.
  We know why the blackout occurred. A few months ago, in April, the 
U.S.-Canadian power system outage task force issued a report and the 
Department of Energy, together with the Canadian counterpart, convened 
a panel of experts that concluded this was something we could avoid if 
we put reliability standards in place. In fact, the No. 1 
recommendation of that task force, which was reported to various 
Members of Congress and various committees, is to ``make reliability 
standards mandatory and enforceable, with penalties for non-
compliance.''
  That was the No. 1 recommendation out of that task force that 
investigated what happened in the Northeast and what happened in the 
Midwest.
  So the question is, Why are we not passing reliability legislation 
before we adjourn, to make sure there are mandatory enforceable rules 
in place? After the task force's 7-month investigation was complete, 
Congress has been given an opportunity, many times on the floor, to 
pass reliability standards. Yet we have not done that. I think some of 
my colleagues are trying to get a larger energy bill passed first. 
There are many aspects of the comprehensive Energy bill this Senator 
would support and many I would not. But I guarantee you this, when this 
electricity reliability standards bill comes to the floor and is voted 
on, it will have unanimous support.

[[Page 15658]]

  So the question is, why we are not peeling off something as important 
as reliability standards as we approach the summer's hottest months, to 
make sure businesses and utilities know they will have electricity 
supply and blackouts will not occur. What if the lights go out again 
this summer? What if they go out in August? God forbid they go out in 
September as many of my colleagues will be in New York doing their 
business and having meetings.
  We know various Western States now, such as in Arizona, are putting 
in place programs to reduce demand because they have concerns. In a 
BusinessWeek article, FERC Chairman Pat Wood basically described the 
summer as ``a rosary bead summer'' in California because he has 
concerns that region is going to have some close calls.
  We also know, according to the North American Electric Reliability 
Council's own Reliability Assessment for 2004, New York City ``might be 
susceptible to reliability problems'' again this summer.
  So folks across the country could be affected by the cascading 
outages that happen to them or in nearby areas. In the words of Michael 
Gent, who is the president of the North American Electric Reliability 
Council:

       Whether legislation is adopted on a stand-alone basis or as 
     part of a comprehensive energy bill, passage is essential. If 
     reliability legislation had been enacted when first proposed, 
     I believe that the blackout would not have occurred.

  Why is that? Because right now, while consumers may think there are 
standards by which supply needs to be on the grid and reliability 
maintained, there are actually no mandatory rules. What happened in the 
Midwest and in New York was the fact that people did not have the 
supply available at a time that the demand was really there, or the 
transmission available to move the power. So consumers were caught in 
the dark--many senior citizens, individuals in hospitals. A whole 
variety of things occurred that were very unfortunate circumstances.
  Now, we in the Northwest know this situation all too well. It was 
actually my predecessor, Senator Gorton, who first proposed this 
legislation and actually passed it out of this body, and then it 
languished in the House of Representatives. We waited again in 2002 and 
2003 to get this legislation moved forward through the process. So I 
think it is critically important before this body adjourns next week 
that we pass the reliability standards legislation and implement it.


                   Unanimous Consent Request--S. 2236

  So, Madam President, I ask unanimous consent that the Senate now turn 
to Calendar No. 465, S. 2236, a bill to enhance the reliability of the 
electric system; that the bill be read a third time and passed, and the 
motion to reconsider be laid on the table, without any intervening 
action or debate.
  The PRESIDING OFFICER. Is there objection?
  Mr. BOND. Madam President, reserving the right to object, we have had 
an energy bill pending that has been filibustered by our colleagues on 
the other side. We are not in a position where one Senator, 
unfortunately, can pass a bill. There may be many bills I would like to 
pass. We do not pass bills in this manner. We should get on with 
passing an energy bill. And, therefore, I object.
  The PRESIDING OFFICER. Objection is heard.
  Ms. CANTWELL. Madam President, I hope my colleagues on the other side 
of the aisle will reconsider their position because we are not, in the 
next 5 to 6 days of legislative action, going to get a comprehensive 
energy bill. But we can get an energy reliability standards bill passed 
and put in place, and send a message sent to electricity providers 
across the country that there are going to be reliability rules and 
standards in place.
  We cannot continue to hold hostage good energy reliability 
legislation for a comprehensive bill when consumers are at risk. We 
cannot continue to deny the reports across the country that more 
blackouts are coming. We need to act.
  Now, Madam President, I would like to take a few minutes to expand on 
some of the other news and events that relate to this energy policy.
  As my colleague mentioned an energy bill, I certainly would like to 
get an energy bill that did something to prevent market manipulation, 
or even just a stand-alone bill that would prevent market manipulation. 
We in the West have been astounded by the lack of response by the 
Federal Energy Regulatory Commission to the news and information about 
markets being manipulated.
  I do not mean there is speculation about manipulation; I mean there 
are documents that have now been uncovered through organizations such 
as Snohomish County PUD; they are actually signed documents by various 
day traders at the Enron Trading Portland office that showed exactly 
how the trading schemes worked. While those utilities harmed will 
continue to pursue their case legally, it is absurd that the Federal 
energy regulators who are supposed to do their job in protecting 
consumers are failing to do anything. Basically they are the policemen 
on the watch and they are letting the crime continue to be committed.
  When I say ``continue to be committed,'' I would like to submit for 
the record an article that was recently published that shows the 
chances that these schemes might still be continuing in the State of 
Texas. The Texas Public Utilities Commission has an ongoing 
investigation, and there are a couple of companies down there that are 
actually pursuing this case. Some of the same Enron traders who were 
involved in the Portland office in these schemes have now moved on to 
other companies. CBS and others now have audiotapes showing that some 
of these Texas power giants might still be manipulating the market in 
the same ways that Enron did. So the question is, When are we going to 
stand up and do something about this?
  I ask unanimous consent to have printed in the Record an article 
entitled ``Accusation: Trader Recordings Show TXU Schemed to Spike 
Power Prices.''
   There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      [From CBS-11, July 8, 2004]

  Accusation: Trader Recordings Show TXU Schemed To Spike Power Prices

                   (By Robert Riggs and Todd Bensman)

       Audiotapes allegedly show traders for Texas power giant TXU 
     carrying out illegal market manipulation schemes to spike 
     electricity prices, much as Enron traders now stand accused 
     of doing in California, according to several state 
     competitors who claim the schemes damaged them.
       CBS-11 obtained 250 hours of previously sealed telephone 
     recordings of TXU trader transactions from Allen-based 
     competitor Texas Commercial Energy. Company executives say 
     the recordings prove TXU cornered Texas's newly deregulated 
     electricity market last year and refused to sell until prices 
     spiked many hundreds of dollars per megawatt hour above 
     normal rates.
       Officials for TXU, by far the state's largest energy 
     company, deny that its traders ever illegally cornered Texas 
     energy markets or squeezed competitors and said state 
     regulatory investigators cleared the company of any 
     wrongdoing.
       The recordings of telephone trader transactions surfaced 
     from a Texas Commercial Energy anti-trust lawsuit that 
     claimed illegal market manipulation schemes by TXU drove the 
     nascent energy company into bankruptcy after several cold 
     fronts last year. A judge dismissed Texas Commercial Energy's 
     lawsuit in June on grounds that the court did not have proper 
     jurisdiction.
       The company says it will appeal for a trial on the actual 
     merits of its allegations.
       ``Now, the consumers get a chance to hear what their 
     intentions were and how they were being damaged,'' said Steve 
     Ousley, President of Texas Commercial Energy.
       In one tape reviewed by CBS-11, TXU traders appear to gloat 
     about excessive prices charged to Garland Power & Light.
       TXU Trader 1: ``They got a little power plant out there. I 
     think they've got 250, 300 (megawatts). And if they're short, 
     you know, they buy it from me sometimes.''
       TXU Trader 2: ``Is that right?''
       TXU Trader 1: ``When I, when I bend them over the bench and 
     give it to them (laughter).
       TXU spokesman Chris Schein dismissed the discussion about 
     the city of Garland as mere ``boasting'' and ``verbosity.''
       ``It's embarrassing, but there is no factual basis to what 
     he said in terms of taking advantage of that customer,'' 
     Schein said.
       Texas Commercial Energy and other competitors tell CBS-11 
     that many other audio recordings prove that TXU imported and

[[Page 15659]]

     then put to use, during several 2003 cold fronts, the kind of 
     market manipulation schemes that have resulted in federal 
     action against traders for Enron, and also the Houston-based 
     Reliant Energy Services, for trading abuses California.
       In April, the Houston energy company Reliant and four of 
     its officers were indicted in San Francisco on six counts of 
     creating false energy shortages to spike prices.
       In the course of its investigation of the TXU allegations, 
     CBS-11 News learned that TXU had hired five ex-Enron traders, 
     including one who came under FBI investigation for his 
     previous work in Enron's indictment-plagued Portland, Ore. 
     office and figures prominently in some of the Texas tapes.
       ``I think Texans should be outraged that they have adopted 
     these Enron-like market manipulation schemes and even hired 
     some of the same people that implemented the schemes out in 
     California,'' Ousley said. ``In Texas, market manipulation is 
     all about the money. At the end of the day the consumers are 
     going to end up paying for the market manipulation.''
       Until now, TXU has largely escaped the kind of public 
     allegations of illegal market manipulation that has recently 
     bedeviled former Enron traders and Reliant Energy. Last 
     month, the release of the so-called ``Grandma Millie'' tapes 
     of foul-mouthed Enron traders in Portland boasting of illegal 
     trading schemes spurred widespread condemnation and pressure 
     on Congress to investigate other energy companies.
       Many of the taped TXU trader conversations reviewed by CBS-
     11 News are infused with jargon and would be difficult for 
     industry outsiders to interpret. Interpretation of the Texas 
     tapes has become central to the emerging controversy over 
     them.
       TXU's Chris Schein said his firm's interpretation of the 
     tapes is that they show no wrongdoing at all.
       ``The kinds of shenanigans that you saw in California did 
     not take place in Texas,'' he said. ``And state regulators 
     have been very concerned about that occurring.''
       Little is known about four of the five former Enron traders 
     who have come to work for TXU, and Schein said affiliation 
     with the scandal-plagued company should not automatically 
     preclude employment at TXU.
       But a fifth former Enron employee, Holden Salisbury, was 
     hired by TXU from Enron's scandal-plagued Portland office in 
     2002, the company confirms.
       Those who worked the Enron office remain under an active 
     FBI investigation for market manipulation schemes known 
     euphemistically inside the office as ``Deathstar,'' ``Get 
     Shorty,'' and ``Fatboy,'' California authorities say. Federal 
     prosecutors have indicted and convicted several of 
     Salisbury's former Enron supervisors on charges that they 
     used market manipulation schemes, including Deathstar, to rip 
     off millions from California ratepayers.
       The 31-year-old Salisbury, who shows up repeatedly in the 
     Texas tape recordings, has not been indicted or accused of 
     any crime. His trading logs from Portland, obtained by CBS-
     11, indicate that he conducted multiple ``Deathstar'' 
     transactions while working there.
       In a brief interview with CBS-11 outside his Allen home, 
     Salisbury would not say how he came to work for TXU but 
     insisted he has done nothing wrong as a trader for either 
     Enron or his current employer.
       ``I don't think I did anything wrong in Portland, and I 
     don't think I have done anything wrong in Dallas,'' he said, 
     declining to talk further without TXU permission.
       TXU's Schein said the company would not allow Salisbury to 
     talk further and that executives were angry that CBS-11 had 
     tried to interview him at home.
       Robert McCullough, a former utility executive in the 
     Pacific Northwest, has worked as an expert witness in 
     lawsuits against TXU and Enron. He said he was surprised TXU 
     would hire anyone else from Enron's tainted Portland office.
       ``We found hundreds, literally hundreds, of documents where 
     the different traders would sign off on specific schemes,'' 
     McCullough said. ``So it's very surprising to us that you 
     would actually want one of those people on your team.''
       Asked why TXU would hire a trader from Enron's Portland 
     office, Schein said Salisbury had passed a TXU background 
     check. He later indicated the FBI had fully investigated and 
     cleared Salisbury.
       FBI officials in San Francisco, Ca., however, say the 
     investigation of the personnel in Enron's Portland office was 
     by no means complete and could yet yield additional cases.
       ``The FBI is in no way vouching for the character of Mr. 
     Salisbury,'' said Special Agent LaRae Quy.
       Salisbury figures prominently in some of the TXU recordings 
     made during last year's February ice storm in North Texas.
       Texas Commercial Energy officers and lawyers say the scheme 
     Salisbury and others used involved buying up as much 
     available energy on the open market as bad weather approached 
     and then, cutting TXU's scheduled sales. According to Texas 
     Commercial Energy, TXU traders would then refuse to sell, 
     even lying to customers about ostensible shortages, until 
     average $50 prices per megawatt hour spiked to a rare $1,000 
     per hour high.
       In the following days, they say, TXU traders working 
     together maintained tight control over prices, keeping them 
     artificially high, but not so high as to trigger the 
     unwelcome attention of state regulators.
       Company officials say this 10:12 a.m. conversation on Feb. 
     25, 2003 between Salisbury and buyer Norm Berthusen of Cirro 
     Energy occurred after an extended buying spree by TXU. They 
     say it is but one of many recorded conversations supporting 
     their contention that TXU traders conspired to withhold 
     energy from the market.
       Holden Salisbury: ``TXU, this is Holden.''
       Norm Berthusen: ``Hey Holden, Norm Bertheson at Cirro.''
       Holden Salisbury: ``Yes sir.''
       Norm Berthusen: ``Anything happening here in some of the 
     short term power?''
       Holden Salisbury: ``Um, it's not looking too good right 
     now. I don't think I'm going to have anything. . .''
       Norm Berthusen: ``Where's all the energy going?''
       Holden Salisbury: ``It's cold man.''
       Norm Berthusen: ``I mean, it is, but hell, nobody's at 
     work. Very few people. I mean. . .''
       Holden Salisbury: ``I don't know. . .''
       Norm Berthusen: ``Strange. . . Strange how we can have 
     56,000 available in the summertime and we can't get 40 
     together in the wintertime.''
       Holden Salisbury: ``Yeah. I don't know. I mean there's 
     (power plant) units that are down in the state.''
       Norm Berthusen: ``What units are down?''
       Holden Salisbury: ``I don't know, but I know there are some 
     . . . Look I've gotta go man.''
       Norm Berthusen: ``Alright.''
       In an interview with CBS-11, Berthusen said he was 
     suspicious that something nefarious was afoot but didn't know 
     for sure until much later.
       ``I believe as a result of those actions that took place in 
     February 2003 there may be a lot more overview from the 
     (Public Utilities Commission) side of the fence in terms of 
     monitoring some of this activity,'' he said.
       TXU's spokesman, Chris Schein, said the recording shows no 
     wrongdoing. He said Salisbury's apparent refusal to say which 
     plants were off was in line with federal regulations 
     prohibiting the trader from divulging such protected details.
       Texas Commercial Energy officials point to recordings a 
     month earlier as further evidence that TXU traders carried 
     strategy of using market dominance to set prices at 
     artifically high levels.
       Traders Tim Drennan and Jim Dunkin discuss the 
     ``strategy.''
       Tim Drennan: ``It's sitting at, uh, thirty-five percent . . 
     . uh thirty four point, uh . . . thirty four and a half 
     percent . . . uh forty six bucks, forty five bucks.''
       Jim Dunkin: ``Yeah.''
       Tim Drennan: ``So, eh, pretty much right in there where I 
     think you wanted to be.''
       Jim Dunkin: ``Excellent, excellent.''
       Tim Drennan: ``Yeah. No, I agree. I eh, we eh, we're all on 
     board with the, the, eh--with what we're doing here.
       Jim Dunkin: ``Good.''
       Later in the same discussion, according to Texas Commercial 
     Energy officials, traders talk about cutting large amounts of 
     scheduled energy deliveries to create an artifical scarcity 
     in the market, thereby driving prices up.
       Jim Dunkin: ``What are you doing?''
       Jerry `Doc' Gatty: ``I'm pulling my thumb wondering what 
     Tim's gonna do here.''
       Jim Dunkin: ``Well, cut it.'' (laughter)
       Jerry `Doc' Gatty: ``We, we've got some big cuts in for 
     nine o'clock, so . . . I'm ready to get to 9 o'clock and get 
     it cutting so I know where I'm going. No, I know where I'm 
     going.''
       Jim Dunkin: ``To the bottom.''
       Jerry `Doc' Gatty: ``To the bottom.''
       Several hours later, according to Texas Commercial Energy 
     officials, prices began to rise sharply to nearly $274, and 
     the traders demonstrate that they have achieved control of 
     prices.
       Jim Dunkin: ``That's just like yesterday. Everything's 
     goin' just like we planned yesterday, except eh, except eh . 
     . . on the prices. But that's fine. I mean, I don't really 
     want to bump the prices unless we're 40 percent.
       Tim Drennan: ``I understand . . .  We'll just keep them 
     where they're at here, uh, for the rest of the day, unless 
     we're, uh, unless we're super long. You know, if it gets over 
     40 percent, maybe I'll take em up to over a hundred. But 
     right now . . .''
       Jim Dunkin: ``You can take them back up over to that . . 
     .''
       Tim Drennan: ``Okay.''
       Jim Dunkin: ``. . . if you get up over 40 percent.''
       Tim Drennan: ``I understand, I understand.''
       Four hours later, the traders discuss price manipulation 
     strategy for the following day by ``cutting the load,'' or 
     reducing scheduled energy sales, to create the appearance of 
     shortages, according to Texas Commercial Energy officials.
       Jim Dunkin: ``I'd still go the same strategy tomorrow of 
     having plenty on, but cut the load.''

[[Page 15660]]

       Tim Drennan: ``Hey, cut-cut the load, go short, but just 
     hold the price below 100 bucks.
       Jim Dunkin: ``Yeah, hold the price below 100 bucks. But I 
     wouldn't roll a hundred bucks until I got the CT.''
       After some additional discussion about price bidding, 
     Drennan said ``And what we'll do is we'll just . . . we'll 
     pull those prices back and keep it under 100, and I'll pass 
     that on to Chad. And we're going to be fine.''
       Said Texas Energy Commission Vice President Bill Silliman: 
     ``They've got control over the prices. They only want to 
     double the price, not create a five-fold increase that 
     everyone would notice.''
       TXU's Schein says the recordings fall far short of proving 
     that anyone at TXU has ever committed a crime or behaved 
     unethically in business. He called the price spikes that 
     occurred last winter ``anomalies'' due to a variety of 
     natural causes and normal market circumstances.
       ``Those things don't occur, have not occurred in Texas,'' 
     TXU's Schein said. ``All of the market anomalies have been 
     thoroughly investigated and found to have been no wrongful 
     activities.''
       Schein was referring to a January 2004 staff inquiry into 
     the allegations by the Public Utilities Commission's Market 
     Oversight Division.
       ``At this point,'' the report concluded, in part, staff 
     ``has found no evidence of widespread, egregious price 
     gouging in the . . . energy market by TXU.''
       But commission spokesman Terry Hadley conceded that 
     investigators were only able to listen to a tiny fraction of 
     the recordings, very late in their inquiry, before issuing 
     the report in January. And, he said, court-ordered 
     restrictions at the time prevented Texas Commercial Energy 
     attorneys from helping investigators interpret the recordings 
     beforehand. By contrast, TXU did work with investigators 
     before the report was completed, Hadley said.
       The investigation remains open, he said.
       ``Obviously, we don't have the resources to listen to 
     everything,'' Hadley said. ``They were considered to the 
     extent that some had been reviewed. With our resources, we're 
     not able to review all the thousands of hours of recordings. 
     But . . . we can continue to review the situation.
       Robert McCullough, the former utility executive who worked 
     as an expert witness in lawsuits against TXU and Enron, 
     questions whether the utility commission is capable of 
     investigating anything. The number of investigators available 
     to enforce complex deregulation rules, he said, is pitifully 
     small.
       ``Unfortunately, in Texas, we don't have many police. We 
     have one small office,'' McCullough said. ``I don't doubt 
     that those gentlemen work very hard, but it's like one 
     policeman to patrol Dallas at the moment.
       ``The budget for the state PUC is $600,000,'' he said. 
     ``That amount of money could be purloined, taken from the 
     consumers in an hour. It's like having the entire budget for 
     the police force for the city of Dallas being the same amount 
     as what's in the till of a Ma and Pa grocery store.''

  Ms. CANTWELL. The issue is really before us in the sense that we need 
to continue to push the Federal regulators to do their job, the Federal 
regulators being the Federal Energy Regulatory Commission. They have 
failed to do their job. We had an Enron collapse and scandal in which 
markets were manipulated, shareholders were conned, books were cooked, 
and various aspects of this investigation and prosecution are taking 
place. My hat is tipped to DOJ in their effectiveness in pursuing this 
case against various Enron employees, including their recent indictment 
of Ken Lay, even though that is a process in which Mr. Lay has his 
opportunity and will have his day in court. But I take great offense to 
Mr. Lay's PR campaign in which he goes on television saying that all 
that happened in California was California's fault, that it was wrong 
for them because they deregulated without proper supply.
  Well, I think it is very clear there has been market manipulation as 
shown by the documents that are being provided, and it is a question of 
whether the Federal regulators are going to do their job.
  Madam President, I ask unanimous consent to have printed in the 
Record an editorial from the Washington Post from this week in which 
the paper criticized the Federal energy regulators for not doing their 
job. I think that is what we need, more attention to show that those 
Federal regulators have not had the bright light of day shown on them 
and that they are failing to do their job.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, July 12, 2004]

                             Enron's Legacy

       It has long been clear that ill-starred Enron Corp., whose 
     founder and chief executive, Kenneth L. Lay, was indicted 
     last week, deliberately manipulated electricity markets to 
     intensify the California power crisis of 2000-01, forcing 
     electricity prices up across the West. But recently released 
     tapes of conversations between Enron traders have reminded 
     the victims of just how cynical that manipulation really was. 
     ``I want to see what pain and heartache this is going to 
     cause Nevada Power Company,'' gloats a trader on one of the 
     tapes, just before completing a deal. ``I'm still in the mood 
     to screw with people.''
       The ratepayers of Nevada--and the rest of the West--are 
     right to feel angry about what Enron did and right to feel 
     aggrieved about the billions of dollars they overpaid for 
     electricity as a result. It's hardly surprising that their 
     anger has spread to Congress, particularly during an election 
     year. Rep. Anna G. Eshoo (D-Calif.) recently got the House to 
     pass an amendment to an energy appropriations bill, 
     effectively requiring the Federal Energy Regulatory 
     Commission (FERC) to give the public easier access to Enron 
     documents. Some, including Sen. Maria Cantwell (D-Wash.) and 
     Sen. Dianne Feinstein (D-Calif.) want the Senate to do the 
     same.
       But while calling for access to documents lets off 
     political steam, it doesn't address the more fundamental 
     problems with federal energy regulation, as many in Congress 
     know perfectly well.
       The much larger concern is that FERC's failure to resolve 
     quickly the gaggle of multimillion-dollar lawsuits and 
     regulatory cases filed by public utility commissions across 
     the West has hampered investment and left energy markets in 
     turmoil.
       The fault is partly FERC's. Each case involves different 
     legal issues, but on the whole, the commission's reaction to 
     them has been slow, overly cautious and narrowly legalistic. 
     At the same time, Congress has refused to heed the 
     regulators' continued pleas for more powers, and particularly 
     for the right to exact the same kinds of civil penalties 
     other regulatory bodies do. Because FERC was set up in a 
     different era, it is a quasi judicial body, with little 
     ability to enforce rules. Its commissioners argue that they 
     have acted according to their interpretation of the law, 
     which among other things does not allow them to invalidate 
     old contracts retroactively. Spokesmen also point out that 
     some of Enron's behavior was ugly but legal, which limits 
     what FERC can do now. Indeed, much of what happened can be 
     attributed to the poor design of California's electricity 
     markets--a design that FERC opposed.
       Nevertheless, it is becoming clear that FERC's overly 
     cautious approach to the Enron aftermath, the fault of both 
     FERC and Congress, has damaged the regulatory commission's 
     standing and even its ability to oversee market regulation in 
     the future. In California, Nevada, Washington state and 
     elsewhere, the acronym FERC has become a byword for 
     impotence. Its job was to protect consumers, the argument 
     goes; it didn't protect consumers, and it doesn't deserve 
     more powers. Yet the future success of deregulated energy 
     markets depends on the existence of a reliable regulator, 
     with enhanced powers to enforce standard market rules and to 
     penalize companies that fail to comply with reliability 
     requirements or that manipulate markets. It's probably too 
     late to undo all of the damage, but in upcoming cases FERC 
     should take far more seriously the spirit of the law, which 
     was designed to protect consumers, and Congress should 
     quickly act to give FERC the powers it needs to prevent 
     market manipulation.
  Ms. CANTWELL. The article basically says:

     . . . FERC's overly cautious approach to the Enron aftermath 
     . . . has damaged the regulatory commission's standing and 
     even its ability to oversee market regulation in the future. 
     In California, Nevada, Washington state and elsewhere, the 
     acronym FERC has become a byword for impotence. Its job was 
     to protect consumers, the argument goes; it didn't protect 
     consumers. . . .

  So I think we need to continue to push. In fact, the editorial goes 
on to say:

     . . . Congress should quickly act to give FERC the powers it 
     needs. . . .

  We must do our job in continuing to protect consumers from this 
market manipulation. When we have evidence now that shows it has taken 
place, and we cannot get the cop on the beat to investigate, and we now 
have documentation and suspicion that it may still be going on in other 
parts of the country, Congress needs to do its job.
  Just as we did with the SEC in passing new accounting rules, we need 
to make sure the Federal Energy Regulatory Commission does its job on 
regulating wholesale power rates, making sure that they are just and 
reasonable and that the manipulation stops.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maine.
  (The remarks of Ms. Collins and Mr. Bond pertaining to the 
introduction of

[[Page 15661]]

S. 2659 are located in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')

                          ____________________