Senate Party-Line Vote Kills Energy Market Curbs
Democrats said their amendment was needed to prevent
recurring price manipulation. The Republicans saw it as
unnecessary regulation
"A Davis spokesman said later: "If Sen. Craig could get out
of bed with Enron and the other power suppliers for a minute,
he'd realize that it's the same extremist Republicans that pushed energy
deregulation that are pushing the recall."
.
By Richard Simon, Times Staff Writer
latimes.com
WASHINGTON - California's electricity crisis gave momentum to
President Bush's drive for a new national energy policy.
But the Senate on Wednesday narrowly rejected a measure that its supporters
said would have provided stronger protection against the kind of market
manipulation blamed for driving up electricity prices during the 2000-01
power crunch.
The Senate's Republican
majority, dubious of the
need for more
government regulation,
defeated a
Democratic-sponsored
amendment to the
energy bill that supporters said would have
strengthened the rules against market
manipulation. The largely party-line vote was 48
in favor of the amendment and 50 opposed.
California's electricity crisis, which had faded
from the congressional debate on energy
legislation, was a hot topic once again as
lawmakers discussed how it came about and
whether the legislation moving toward approval does enough to prevent energy price spikes from
occurring again.
The Senate energy bill includes a number of measures spotlighted by California's troubles, such as
outlawing a form of energy trading blamed for driving up electricity prices and boosting, from $5,000 to
$1 million, the penalty for violating the law governing power sales.
But Democratic senators from Western states asserted that the energy bill does not go far enough to
protect consumers.
Citing last year's headlines about price manipulation, Sen. Jeff Bingaman (D-N.M.) said, "It seems as
though something has been forgotten since those stories were being written a year ago."
Sen. Maria Cantwell (D-Wash.), the amendment's sponsor, brought to the Senate floor placards
reading "Fat Boy" and "Ricochet," which were Enron Corp.'s nicknames for the schemes the company
used to exploit California's market.
She said the energy bill does nothing, for example, to prohibit "ricocheting" - a scheme that involved
selling power out of state to avoid in-state price caps, and reselling it back into the state at higher
prices.
But Sen. Pete V. Domenici (R-N.M.), chairman of the Senate Energy and Natural Resources
Committee, said he "wouldn't have dared bring a bill to the floor that didn't give the West Coast all the
protections" that were possible.
As an example of such protections, a Domenici aide said, the bill includes a provision requiring power
merchants to disclose how much space is available on transmission lines to prevent so-called ghost
congestion, which could drive up prices.
Republican senators, calling the amendment unnecessary, said federal authorities have already moved
under existing law to investigate and punish alleged wrongdoers in the California crisis. Sen. Larry Craig
(R-Idaho) claimed that a flawed state deregulation law was a leading cause of the California crisis.
Then, citing the recall election facing Democratic Gov. Gray Davis, Craig added: "Finally, the
ratepayers of California got it figured out. The politics of California destroyed the market."
A Davis spokesman said later: "If Sen. Craig could get out of bed with Enron and the other power
suppliers for a minute, he'd realize that it's the same extremist Republicans that pushed energy
deregulation that are pushing the recall."
Sen. Dianne Feinstein (D-Calif.) bristled at assertions by GOP lawmakers that gaming was not a major
factor in driving up prices.
"Perhaps those of us in the West are more disconnected from the Beltway than I ever believed," said
Feinstein, who was joined by Sen. Barbara Boxer (D-Calif.) in voting for the amendment. Industry
officials also questioned the need for the measure.
"We cannot point to a single person who's done something wrong on the West Coast who hasn't been
investigated," said Gene Peters, vice president for legislative affairs for the Electric Power Supply Assn.
Craig Goodman, president of the National Energy Marketers Assn., said federal regulators were
moving to stiffen rules against price manipulation.
"It may not be necessary to legislate something that already is being implemented," Goodman said.
A spokesman for the Federal Energy Regulatory Commission declined comment on the legislation.
California, which seeks $9 billion in refunds for overcharges during the energy crisis, has alleged that
energy suppliers engaged in a sweeping pattern of market manipulation in 2001 and 2002. But federal
regulators have been considering a smaller refund total, estimated at perhaps $3.3 billion in the main
refund case, which may be resolved later this year.
In addition to the refund case, FERC is investigating allegations that energy suppliers engaged in a
pattern of excessively high bids in the spring and summer of 2000 that had the effect of manipulating
prices upward.
They also are considering dozens of individual cases of alleged market manipulation. The review of
bidding and the individual cases could have the effect of adding to the refund totals, but most experts
believe the amounts will remain far below what California is seeking. |
