Letter to Senator Pete Domenici

July 22, 2003

The Honorable Pete Domenici
Chairman
Senate Committee on Energy
And Natural Resources
U.S. Senate
Washington, D.C. 20510

Dear Chairman Domenici,

As floor debate continues on S. 14, the comprehensive energy legislation recently reported by the Senate Energy and Natural Resources Committee, we write out of deep concern that the electricity title both rolls back existing consumer protections and fails to put in place the new safeguards needed to respond to the lessons of the western energy crisis.

We are specifically concerned that the electricity title as written will allow the strategies of Enron and others to manipulate wholesale electricity markets to go unchecked. We are also concerned that this legislation will lead to increased and inefficient consolidation within the utility industry—to the detriment of consumers and investors alike. In addition, we are troubled that the electricity title fails to establish strict financial firewalls between utilities and their unregulated affiliates.

During floor debate on the energy bill, we hope that you will support proposals to address these issues:

The electricity title should ban all forms of market manipulation and contain concrete penalties for those who break the
rules.

Any electricity title passed by the Senate should not repeal the Public Utility Holding Company Act (PUHCA) without
a commensurate increase in the Federal Energy Regulatory Commission's (FERC's) authority to review the merger and
acquisition of holding companies' utility assets.

Similarly, the title should ensure there are adequate safeguards in place to prevent holding companies from using public
utilities—and their ratepayers' checkbooks—as collateral for the business ventures of affiliates.

As the western energy crisis and Enron's collapse made clear—and as recent and ongoing investigations have reinforced—today's electricity markets are ripe for manipulation unless clear safeguards are put in place and companies are held accountable.

In the absence of an agreement on these measures to restore ratepayer and investor confidence in the energy sector, we believe any final bill reported by the Senate should contain either no electricity title or very limited measures that—in the very least—leave intact our nation's existing consumer protection laws.

Sincerely,

Senator Maria Cantwell (D-WA) Majority Leader Tom Daschle (D-SD)
Senator Mark Dayton (D-MN) Senator Russ Feingold (D-WI)
Senator Edward Kennedy (D-MA) Senator Herb Kohl (D-WI)
Senator Debbie Stabenow (D-MI) Senator Dianne Feinstein (D-CA)
Senator Barbara Boxer (D-CA) Senator Jim Jeffords (I-VT)
Senator Ron Wyden (D-OR) Senator John Kerry (D-MA)
Senator Patrick Leahy (D-VT) Senator Carl Levin (D-MI)
Senator Bill Nelson (D-FL) Senator Tom Harkin (D-IA)
Senator Kent Conrad (D-ND) Senator Daniel Inouye (D-HI)
Senator Jeff Bingaman (D-NM) Senator Max Baucus (D-MT)
Senator Jack Reed (D-RI) Senator Frank Lautenberg (D-NJ)
Senator John Edwards (D-NC) Senator Daniel Akaka (D-HI)
Senator Patty Murray (D-WA) Senator Christopher Dodd (D-CT)
Senator Dick Durbin (D-IL) Senator Bob Graham (D-FL)
Senator Harry Reid (D-NV) Senator John Corzine (D-NJ)
Senator Tim Johnson (D-SD) Senator Joseph Lieberman (D-CT)