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Who yields time? The Senator from Idaho.
[Page: S2448] GPO's PDF
Mr. CRAIG. Madam President, I yield 5 minutes to my colleague from the State of Washington.
The PRESIDING OFFICER. The Senator from Washington.
Ms. CANTWELL. Madam President, I rise today in support of the Craig amendment which would strike this bill's electricity title, with the exception of its reliability and the Federal Trade Commission related consumer protection provisions. I thank the Senator for offering this amendment.
Because of the truly unique nature of the Northwest energy system--and the historic Federal presence, predominance of public power and our hydroelectric base, to name a few distinguishing characteristics--I believe the electricity title of this legislation is possibly the single most important part of this bill to consumers in Washington State and, frankly, I believe the electricity title falls short of what is necessary to protect our Nation's consumers in this inevitable challenge that we have had in Washington State.
What is at stake here, I believe--and I appreciate the chairman's efforts to try to craft a compromise electricity title. However, my position on the importance of consumer protection provisions has me concerned about the impact that this particular title will have on the State of Washington where the electricity market has gone awry.
Consumers in my State are suffering from rate increases of up to 88 percent on account of the market dysfunction that unfolded in the West last year. I believe the western electricity crisis was really precipitated by two factors: Obviously, California adopted a restructuring plan without adequate thought and deliberation, and the fact that FERC, the Federal Energy Regulatory Commission, signed off on it. Then FERC allowed generators in the West to charge market-based rates without first ensuring that those markets were sufficient in their competition and that they were adequately monitoring those markets over time.
What that meant is that many industries in my State could not afford those high electricity prices, but nothing was being done to determine whether they were just and reasonable. Many people lost their jobs, and many children were not allowed to go to college because their families were without income. Many consumers paid very high electricity rates.
I believe the provisions contained in the electricity title will do nothing to prevent another western electricity crisis from occurring. What is more, and what my colleagues should be concerned about, is that this is an electricity title that will do nothing to prevent FERC from making those same mistakes again in other regions.
The electricity title contained in this bill restructures the entire utility industry without giving the Senate ample opportunity to consider the implications of this action. In fact, these very amendments were brought up on the floor without anyone knowing they were being brought up.
This bill does not direct FERC to establish clear rules for when market rates can be charged, nor does it establish effective measures to police the market and provide needed remedies for any abuses or market imperfections.
Again, these are very important issues for consumers.
This electricity title repeals PUCHA, the Public Utility Company Holding Act, and moves merger approval authority from the Securities and Exchange Commission to FERC. In doing so, it weakens the burden of proof standard that companies must meet before they are allowed to merge.
In the aftermath of everything that has occurred in California, everything that has occurred with Enron, why would we take one policy in which we have a standard by which the merger of companies and prices are impacted and remove that standard and make it a lesser degree? I do not believe that is in the interest of consumer protection.
I support the Craig amendment to strike the electricity title because I believe these provisions do push the Northwest closer to a regional transmission organization. As some of my colleagues may know, FERC has repeatedly said the Northwest ought to join a westwide RTO. So, again, to Northwest consumers who have lost jobs because of the electricity crisis or are paying higher rates because of the electricity crisis who were forced under emergency order to send our power down to California and consequently paid a higher price, the fact that we might be hitching our fortunes to California does not sound like a very good issue for Washingtonians.
I am very concerned because even FERC's own cost-benefit analysis suggests that consumers in the Northwest might suffer from the establishment of an RTO organization on a westwide basis.
It is very important, although there are some other things such as the renewable portfolio standard which I think is really a subpar issue, and I think we need to improve on that, we think of the consumer interests. I support the Craig amendment, and I hope we will be able to change some of these issues and protect consumers in the future.
I yield back the remainder of my time.
Mrs. MURRAY. Mr. President, I rise to lend my support for Senator CRAIG'S amendment to strip the electricity title from the energy bill. I believe that addressing electricity in major legislation, at this time, would not be good for the Nation.
The electricity title does not protect consumers the way it should. We have not fully evaluated the effects of this bill on energy consumers, particularly small consumers.
I am uncomfortable with the direction of the electricity title in moving authority away from State regulators to the FERC.
Last year, the west went through a terrible electricity crisis which consumers are still paying for and workers still remain out of work.
Also, in this past year we saw the collapse of Enron.
We are still trying to fully understand the causes and effects of these two events. Hearings are occurring and legal proceedings are ongoing. House and Senate committees as well as numerous Federal and local government agencies are still trying to find out what happened with Enron and why. Many people lost their jobs and many more people lost their savings and retirement accounts.
I do not believe we should move forward on major electricity market restructuring legislation before we completely understand what happened. Enacting broad, far reaching electricity market restructuring legislation before we understand what occurred would be a big mistake.
FERC has been forcing the development of Regional Transmission Organizations around the country in recent years. I have spoken with Chairman Wood and the other commissioners about my concern that their vision of RTOs may not fit with the structure of the Northwest electricity operations and market.
As I have stated earlier FERC is already exercising its broad authority and the national electricity market is rapidly changing. Enron, a major electricity market participant, collapsed late last year. We are still trying to sort out what occurred.
In the Pacific Northwest, energy isn't just a commodity. It is a resource that affects everything from our economy to our air, our water, agriculture, salmon recovery, and our quality of life.
We should not make the same mistake California made, by restructuring the electricity markets, before all the issues have been thoroughly explored and resolved.
Nearly everything I am hearing from people in my State is that they do not like this electricity title. They do not feel it is in their best interests. They are concerned about the direction FERC will take.
I am also concerned that all market participants have not had an opportunity to review this legislation and have not had an opportunity to provide meaningful input. We need to make sure the legislation is thoroughly reviewed and discussed before we enact major legislation.
This is a $200 billion industry. If bad legislation is passed, the consequences will be significant.
The amendment is not perfect. I am unhappy to see the good provisions of the electricity title removed. I am particularly unhappy that the amendment does not promote renewable and diverse electricity sources. However, Senator CRAIG'S amendment is preferable to the existing provisions in the electricity title.
Mr. JEFFORDS. Mr. President, allow me to state briefly that I will be voting against the amendment offered by Senator CRAIG. I do so not because I feel good about the existing provisions in the electricity title of this bill, but because I believe they are a starting point from which we ought to try to move forward.
It is no secret that I am a strong supporter of renewable energy and a meaningful renewable energy production requirement. I admit to disappointment in the provision currently contained in this legislation. While it nominally contains a 10 percent renewable requirement, the various exemptions and carve-outs bring it down effectively to a roughly five percent requirement by the year 2020.
This level of Federal commitment to renewable energy is painfully inadequate and I must express my concern and disappointment at this low number.
I will also point out that, despite the assertions of my colleague from Alaska earlier today, a 10 percent requirement by the year 2020 would not raise consumer energy costs. According to the Department of Energy, a 10 percent Federal renewable portfolio standard would reduce overall consumer energy costs by $3 billion per year by the year 2020.
The figures the Senator from Alaska was referring to were the gross price of renewable energy, not the increased costs to consumers of using renewable energy versus other forms of energy. The relevant figure is not what the renewable energy itself will cost, but the increased costs, if any, to consumers, from using renewable energy. As I have stated, the Department of Energy says under a 10 percent renewable energy mandate, consumer costs will actually go down, compared to energy costs with no renewable energy mandate.
So even a 10 percent renewable energy requirement will benefit consumers, and I hope we can get to a point where this Congress can actually implement that required level. However, while I am disappointed in the provision currently in the bill, I do believe it is a starting point, and one upon which I hope we can improve. Senator CRAIG's amendment to strike it entirely is not moving forward, but backsliding to where we are right now, which is nothing.
As to other portions of the bill, I have long held the position that we should not move forward with repeal of PUHCA and PURPA without substantial consumer protections, and substantial new investments in renewable energy, including net metering, strong interconnection standards and substantial investments by Federal agencies in renewable energy. Again, I am disappointed in the provisions currently in the bill, but would hope that we could improve these provisions as the bill moves forward, rather that just dropping everything.
For that reason, I will not support Senator CRAIG's amendment, but urge my colleagues to make the needed improvements in this bill.
The PRESIDING OFFICER. Who yields time?
The Senator from New Mexico.
Mr. BINGAMAN. Madam President, I yield myself 3 minutes of the time that is reserved in opposition to the amendment.
I understand the concerns that have been expressed by the Senator from Idaho. I understand the concerns expressed by the Senator from Washington. There is no question there is a lot of uncertainty about the future of electricity markets, and we are doing our best in this legislation on a bipartisan basis to point in a direction we know we need to move, a direction away from command and control and toward more of a market based system. I think all experts who have looked at it agree that is the general direction in which we ought to go.
This legislation before us is the result of a lot of cooperation between myself, the Senator from Wyoming, other interested Members, and, of course, the administration as well since they have a vital interest in seeing the comprehensive bill we are considering, the energy bill, contain a title related to electricity that helps to ensure we have adequate electricity for our needs in the future, helps to ensure that the proper authority is there at the Federal Energy Regulatory Commission to ensure that mergers occur when consolidations occur, as they inevitably will, and that ratepayers are not harmed.
We have a provision in the bill. We are taking the authority under the Public Utility Holding Company Act and its requirements, the ones we believe make good sense and protect consumers, and we are shifting that responsibility to the Federal Energy Regulatory Commission. We are requiring them to ensure four things in order to approve a merger or an acquisition. No. 1, that captive ratepayers are not harmed by the acquisition or the merger; that the capacity of regulators to regulate is not in any way interfered with. That is another requirement. They are required to find there is no cost subsidy between the utility that is the subject of the merger and any other company so ratepayers are not being asked to subsidize any other business.
Of course, they are also required to find that it is in the best interest to go ahead with this merger before they can approve a merger. We believe this will be more effective regulation, more effective oversight of this industry than we have had in the past. We believe this language is a modernization.
Title II of the energy bill represents a modernizing of the law that is in the best interest of consumers and the best interest of our economy long term. I believe it is strongly supported by most of those who are interested in this issue and who have studied it.
I compliment my colleague from Wyoming for his hard work on this issue, which has led us to the language we now have in the bill, which my friend from Idaho, Senator Craig, would have us strip out with his amendment. I hope Senators will vote against the amendment of the Senator from Idaho.
I yield the floor and reserve the remainder of our time.
Mr. CRAIG. Madam President, may I inquire how much time is remaining on my side?
The PRESIDING OFFICER. One minute twelve seconds.
Mr. CRAIG. Madam President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Mr. CRAIG. I yield 1 minute to the Senator from California.
The PRESIDING OFFICER. The Senator from California.
Mrs. BOXER. Madam President, I am going to be supporting this amendment and I want to explain why. I am not happy with the part that strips out the renewables. We can put that back in. What I like about this amendment is that it really protects the States.
I have great respect for my friend from New Mexico, but I have to tell him that California's experience with FERC has been nothing less than dismal. FERC is supposed to protect against unjust and unreasonable prices. They have done nothing to help us. They have been unfriendly to us, and the Senator is giving them more power. PUCHA, which is the Public Utility Holding Company Act, which the SEC is responsible for enforcing, is being repealed.
I would rather keep the issue of mergers with the SEC any day of the week than give it over to FERC which has not shown itself in any way that I can tell to be particularly friendly to consumers.
So I thank the Senator. I know everyone comes at this a little bit differently, but the bottom line is, on the whole I think this is a good amendment and I will be supporting it.
I yield the floor.
The PRESIDING OFFICER. The Senator's time has expired. The Senator from New Mexico controls the remainder of the time.
Mr. BINGAMAN. I yield the remainder of our time to the Senator from Wyoming.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Madam President, I ask unanimous consent that I be allowed 30 seconds to close.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Wyoming.
Mr. THOMAS. Madam President, I thank the Senator, and I appreciate the chance we have had to work together. Certainly, it is interesting. I have a couple of things I want to say. First of all, regarding the comments about FERC, that is exactly the way
[Page: S2450] GPO's PDF
I have a letter from NARUC, the National Association of Regulatory Utility Commissioners. It came in when the bill was in its initial stage. They point out there is an admirable compromise between Federal and State jurisdictions, including the issues they can support, and then they suggested some other changes which exist in the current bill because of this.
Utility mergers sections, they support that; electric reliability standards, they support that. They support the PUCHA substitute and the PURPA substitute, and the net metering and consumer protection subtitle. This is the National Association of Regulatory Utility Commissioners which is in favor of the changes that have been made and would be opposed to the Craig amendment.
This is a letter from the Secretary of Energy and represents the position of the administration. It says:
I am writing to express my support for the electricity amendment package agreed to by the Senate last week following bipartisan negotiations. ..... These negotiations, between Senate Republicans and Senate Democrats, resulted in a fair, balanced and bipartisan consensus regarding several electricity provisions of the energy bill--a consensus that the administration endorses. Those negotiations also set forth a process to debate and vote on reliability and renewable portfolio standard provisions where consensus could not be reached. As we have discussed on several occasions, I believe that an electricity title is a fundamental component of comprehensive energy legislation. The administration has repeatedly stressed that appropriate electricity legislation is necessary to protect consumers, make wholesale power markets more competitive, strengthen the transition grid, increase electric supply and improve reliability. Any such legislation must also balance these ends with consideration to the role of States. These goals are reflected in the electricity amendments agreed to by the Senate last week.
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