Energy Policy Act of 2003- Continued

July 29, 2003

ENERGY POLICY ACT OF 2003—CONTINUED

    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 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.
    
    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 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.
    
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 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 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.