ENERGY POLICY ACT OF 2003
Ms. LANDRIEU. Mr. President, I rise in strong support of the Domenici substitute electricity amendment. There have been few other parts of the Energy bill that have been more controversial or that have been the subject of more debate than the electricity provisions. The Domenici amendment is a well-crafted compromise that represents some of the best thinking on electricity deregulation. It is worthy of the support of all Senators because it addresses those issues that need to be addressed and does so in a fair and balanced way.
The Domenici amendment deserves the bipartisan support of the Senate because it provides Federal agencies such as the Commodity Futures Trading Commission and Federal Energy Regulatory Commission with new tools to prevent and penalize anti-consumer and manipulative behavior, including false price reporting and simultaneous trading of the same volumes of electricity between two entities, known as round-trip trading. It encourages distributed and renewable generation through a nationwide net metering program; in other words, it allows entities that use solar power or small gas generators to put excess electricity back into the grid.
It moves the FERC's refund authority back to the filing of a complaint. Currently there is a 60-day grace period before refunds can be issuedthe proposed language removes the 60 days. It expands FERC's merger review authority by increasing the number of transactions that will be subject to FERC review and approval; in addition to utilities FERC now will be able to review mergers of transmission assets. This prohibits so-called "slamming" and "cramming." This concept comes from the telecom industry. Slamming is when retail customers have their service switched unknowingly, for example, AT&T to Sprint. Cramming is when retail customers have items added on to their bills unknowingly, for example, call waiting.
It requires the FTC to issue rules protecting the privacy of electric consumers; and the customers information cannot be shared without their consent. It requires FERC to issue a new policy establishing conditions under which public utilities may charge market-based rates. This policy is to consider consumer protection, market power and other factors deemed necessary by FERC to ensure that market based rates are just and reasonable. FERC cannot switch to market base rates if a monopoly exist or else will have to employ cost based rates.
Let me talk a few moments about the consumer protection provisions of this amendment. This is an area where some of my colleagues say the Domenici amendment does not go far enough. I believe that the provisions of the Domenici amendment are a significant first step in the right direction. Let me tell you why. First, the Domenici amendment would require FERC for the first time to issue rules to establish an electronic information system to provide information about the price and availability of wholesale electric energy and transmission capacity. Transparency is key to well functioning and fair electricity markets and this amendment will significantly improve transparency. The amendment further seeks to ensure market transparency and integrity by prohibiting the filing of false information regarding the price of wholesale electricity and availability of transmission capacity.
Second, the amendment would prohibit specific manipulative conduct and practices, including simultaneous trading of the same volumes of electricity between two entitiesround-trip trading.
Third, the Commodity Futures Trading Commission is given important new authority that will improve market transparency and further strengthen anti-manipulation powers. These new powers include a strengthening of the CFTC's authority to investigate and punish fraud and manipulation in the reporting of electric and natural gas prices and an expansion of the CFTC's general anti-fraud authority to cover certain on-line trading platforms, like those run by Enron.
Fourth, the amendment substantially increases criminal penalties for violations of the Federal Power Act to $1,000,000 per violation and civil penalties are substantially increased as well.
Finally, the refund effective date for violation of the "just and reasonable" pricing standard under the Federal Power Act is moved back to the date of the filing of a complaint, thus giving consumers a greater likelihood of receiving refunds where prices are found not to be "just and reasonable."
In short, this is a good consumer protection package and it is one that is worthy of our support. The Domenici amendment also makes certain long-overdue reforms to our Nation's outdated electricity laws. For example, the amendment would carefully extend open access requirements to transmission systems owned by all large transmission-owning utilities so that larger, more seamless regional wholesale electricity markets can be created. It would establish new transmission pricing policies to help ensure that those benefitting most from new transmission investments are obligated to pay for them. It reforms PURPA while protecting existing investments, contracts, and expectations. Lastly, it repeals PUHCA, while ensuring that State and Federal regulators have access to the books, records and information needed to ensure informed regulatory action.
Mr. President, this is a good amendment. I urge all my colleagues to support it.
However, there are some improvements that should be incorporated. One such example would be Senator Cantwell's amendment that places a broad prohibition on all manipulative practices in electricity markets.
I yield the remainder of my time.