American Morning - Transcript
CNN
SHOW: AMERICAN MORNING 07:00
June 15, 2004 Tuesday
Transcript # 061506CN.V74
HEADLINE: Iraqi Interim Prime Minister: Country Will Take Charge of All Detainees, Including Saddam Hussein
GUESTS: Iyad Allawi, Maria Cantwell, Saman Abdul Majid
And Senator Maria Cantwell of Washington State calling for the FERC, the Federal Energy Regulatory Commission, to open a new investigation into Enron in light of this and other new evidence.
She's live in our D.C. bureau.
That was a long lead-in.
Good morning to you, Senator.
Thanks for your time today.
SEN. MARIA CANTWELL (D), WASHINGTON: Good morning, Bill.
HEMMER: The evidence you gave yesterday, what do you contend that shows regarding Enron?
CANTWELL: Well, it shows specifically that ratepayers have been hurt and the federal regulators need to give them justice by coming in and revoking Enron's market-based authority. That way we can get out of these long-term contracts.
But right now, ratepayers across the West are actually being sued by Enron and becoming the deep pockets for their bankruptcy.
HEMMER: You say your consumers have been hurt.
Specifically in the State of Washington, in what way?
CANTWELL: Well, we had 14,000 people in 2002 that actually had their power shut off because we had a 50 percent rate increase. People have lost jobs. People have had, in the county that I live in, a 50 percent rate increase on their energy prices. And if we have to live with these Enron contracts, we'll be paying that 50 percent rate increase for the next five years.
HEMMER: We...
CANTWELL: That's...
HEMMER: I'm sorry for the interruption there.
We played one excerpt there, Senator.
Here's another one from yesterday.
And then I want to come back and kind of explain it to our viewers. A little bit of complication here. Listen and we'll talk.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: So as far as Washington is concerned, that 25 megawatts, they won't even see it, because it's just going to, I guess, to Arizona.
UNIDENTIFIED MALE: Well, the Western will still you, right?
UNIDENTIFIED MALE: What's that?
UNIDENTIFIED MALE: The Western, you're telling me Western won't even see this?
UNIDENTIFIED MALE: Well, technically Western will see it, but it's bouncing out-just in and out of their system.
UNIDENTIFIED MALE: Yes. Yes, I see what you're talking about.
UNIDENTIFIED MALE: A ricochet I guess is a good way of putting it. Although that seems to be a pretty...
UNIDENTIFIED MALE: Bounce is good.
UNIDENTIFIED MALE: Bounce, yes.
(LAUGHTER)
UNIDENTIFIED MALE: Ricochet is (UNINTELLIGIBLE) border on the (UNINTELLIGIBLE).
(END VIDEO CLIP)
HEMMER: Senator, take that phrase ricochet.
What does that mean?
CANTWELL: Well, it's a very disgusting scheme that was promulgated by Enron. And what it means is in California, the regulators had a cap on how much you could sell power for. So Enron took the power outside of the State of California-sometimes to Oregon, sometimes to Arizona-and then sold it back into California and thereby got to sell it at a higher rate. They made hundreds of thousands of dollars on these kinds of ricochet actions in just a few hours. And we showed that there are many days in which they did these kinds of ricochet actions.
HEMMER: You also talked yesterday in your presentation in Washington about sinister schemes-market manipulation.
Is that what you were describing yesterday, taking energy out and reselling it?
CANTWELL: Well, the...
HEMMER: Which is essentially double dipping, I would assume.
CANTWELL: Well, you just played two tapes. The first one was the death star scheme. And what that did is it created congestion and then when an energy company actually provides energy to relieve congestion, you get bonus payments. So that first tape talked about how they created congestion and then got the benefits from those bonuses.
And then the ricochet, again, how they circumvented the caps that California had by taking power and then just selling it back.
In one instance, they actually took surplus power from California that they got for zero dollars and sold it back into California for $750 a megawatt, gouging Californians.
HEMMER: Quickly, Senator, on the screen a statement from Enron. It came out some time ago. "We have been and we're continuing to cooperate with all investigations."
A, is that your understanding at this point? And B, what can the federal government do if you allege this is going on and it's illegal and it's hurting your constituents back in the Northwest?
CANTWELL: Well, certainly everybody wants to know when some of the other Enron executives are going to jail for promulgating these schemes. But the key issue is about 10 states and the utilities in those states have contracts with Enron. The question is whether the federal government is going to continue to make rate payers in those states pay those contracts.
If contracts have been fraudulent, if they've been manipulated, the federal government should make sure that justice is delivered and that rate payers don't have to pay on those contracts.
HEMMER: Maria Cantwell is a senator from the State of Washington.
Thanks for talking this morning.
CANTWELL: Thanks, Bill.