Electric Transmission Property Depreciation

ELECTRIC TRANSMISSION PROPERTY DEPRECIATION -- (Senate - June 23, 2005)

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Mrs. MURRAY. Mr. President, I would like to express my support for a provision in this energy legislation that provides relief for Washington State ratepayers who suffered from Enron's market manipulation schemes.

All of us from the West Coast remember the energy crisis of 2001, when consumers and businesses were hit with massive increases in the cost of energy. Many in California faced shortages and brownouts. In Washington State, we felt the impact as well.

Washington State ratepayers have been continually penalized for failures in the energy market and failures by Federal energy regulators. While there were many causes for the energy crisis, the most disturbing is the fact that energy companies, such as Enron, manipulated the marketplace to take advantage of consumers.

As we saw throughout the crisis, the Federal Energy Regulatory Commission did not take aggressive action to protect consumers from market manipulation. In fact, over the last several years, as we in the West have sought to clean up the mess that these companies left in their wake, FERC has continued to drag its regulatory feet.

For more than 3 years, many of us in the Northwest delegation have been urging FERC to better protect consumers, and provide relief to ratepayers affected by market manipulation. At the height of the 2001 energy crisis, FERC was urging companies to enter into long-term contracts at highly-inflated rates, advice which many Northwest companies followed.

In 2003, FERC found that market manipulation occurred during the 2001 energy crisis, but indicated it would be unlikely that Washington State ratepayers would be reimbursed for the harm caused by the manipulation. When Western utilities--including Snohomish PUD, which was hit particularly hard--terminated their contracts with Enron, Enron turned around and sued them for ``termination payments.''

It was very disturbing for all of us to see FERC agree that there was manipulation, but leave Washington ratepayers holding the bag--with no relief--for the harm they experienced in 2001 and continue to experience today.

I am pleased that this energy legislation addresses this important issue by giving FERC exclusive jurisdiction to determine whether termination payments are required under certain power contracts are unjust and unreasonable.

This is wonderful news for Washington State ratepayers because of a March 2005 order, in which FERC found Enron in violation of its market-based authority at the time Snohomish PUD signed its power contract. This provision ensures Snohomish PUD's ratepayers will not be required to pay the now-bankrupt Enron for power the region did not receive.

Mr. President, I support this provision as it will protect Northwest ratepayers and give FERC more tools to better police the energy market.

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