Energy Policy Act of 2003

July 30, 2003

ENERGY POLICY ACT OF 2003

Mr. WYDEN. Mr. President, I thank the Senator from Washington, and I also thank the Senator from New Mexico for his courtesy.

    I rise in strong support of the Cantwell amendment. What we have seen in the Pacific Northwest with respect to the manipulation of our energy markets is that the position of the Federal Energy Regulatory Commission has simply been see no evil, hear no evil, and ignore evil.

    The reason I have come to that conclusion is that when the Federal Energy Regulatory Commission Commissioners came to the Energy Committee in March to discuss with us the question of manipulation of the Pacific Northwest market, I read excerpts point by point from the Reliant Energy trading transcript to the Commissioners. I read to them pretty much like a bedtime story. Here is the portion of the transcript that I read to the Commissioners. It involves the Reliant manager.

    He says:

    How did it work today?

    Reliant Trader: 129. We're talking about the power exchange.

    Reliant Manager: Yeah. I saw that.

    Reliant Trader: Then we trade up to 1.31 for the third quarter next year.

    Reliant Manager: Sweet.

    Reliant Trader. We even had a senior manager down here.

    Listen, if you would, Mr. President, and colleagues to this.

    The reliant trader said:

    He just wanted us to know that everybody thought it was really exciting that we're gonna play some market power.

    After reading this transcript, I asked the Commissioners, How can you reach the conclusion after what I have read to you that overpriced contracts based on manipulation toward market prices should not be avoided or at least reformed? I pointed out it was clear just on the basis of that short excerpt that the traders were manipulating long-term prices when they were talking about the third quarter next year.

    What is more, the Federal Energy Regulatory Commission staff's investigative report issued earlier this year found that there was a particularly significant correlation between spot prices and shorter 1- to 2-year contracts. Despite being caught in the act with a smoking transcript, despite having it read to them like a bedtime story, despite the Federal Energy Regulatory Commission's staff findings, the majority of the Federal Energy Regulatory Commission—specifically Commissioners Wood and Brownell—still cannot see the connection between these caught-in-the-act, smoking gun memos and transcripts and the higher energy prices my constituents are now paying because of the market manipulation detailed in these transcripts.

    I am pleased to be able to have just a couple of moments here. But it seems to me if the Federal Energy Regulatory Commission is unwilling or unable to police long-term energy markets in cases like this where people in the Pacific Northwest are being ripped off in broad daylight, it is time for the Congress to step in. That is why the Cantwell amendment is so important.

    I urge my colleagues to back the Cantwell amendment and outlaw the kind of manipulation that I have read to the Senate today and that I read to the Energy Committee. Unfortunately, the Federal Energy Regulatory Commission is unwilling or unable to address it.

    I yield the floor.