01.23.04

Cantwell: Think Enron Problems Fixed? Think Again.

WASHINGTON, D.C . - U.S. Senator Maria Cantwell (D-WA) started another fight for consumers against big energy companies. Cantwell introduced legislation that would ban market manipulation schemes that drive up energy prices, such as those used by scandal-ridden ENRON during the energy crisis of 2000-2001.

Along with Senators Russ Feingold (D-WI) and Jim Jeffords (I-VT), Cantwell introduced the Electricity Needs Rules and Oversight Now (ENRON) Act (S. 2015). The bill provides the Federal Energy Regulation Commission (FERC) with the power to crack down on energy companies that attempt any deceptive action to get around federal energy regulations.

"There is overwhelming evidence that Enron and other unscrupulous energy companies brazenly manipulated western energy markets during the crisis of 2000-2001," said Cantwell. "People assume that these deceptive tactics are illegal, but they aren't. My bill will make sure this never happens again."

Documents have been recovered that prove Enron participated in a number of these regulation-skirting schemes, naming them "Fat Boy" and "Death Star." While federal authorities have charged about 30 former Enron employees with a variety of civil and criminal crimes, Cantwell noted that--more than two years after the company's historic collapse, in December 2001--Enron's two top executives remain untouched.

"Jeff Skilling and Key Lay presided over a company whose activities wrecked energy markets putting a $35 billion dent in the Western economy," said Cantwell. "Enron's collapse destroyed more than $60 billion in shareholder value, devastating the retirement security of practically every American worker and retiree. Two years later, even after national attention to the scandal has ebbed, my constituents haven't forgotten. Their monthly utility bills are a potent reminder."

In November, Cantwell authored and muscled through an amendment to the fiscal year 2004 Agriculture Appropriations Bill that prevented energy market manipulation. Even though it passed with bipartisan support (57-40) the Omnibus Appropriations conference committee stripped the market manipulation provisions from the bill.

"Behind closed doors in the smoky offices of special interest lobbyists, Enron and its cronies continue to resist fair-play in the energy market," charged Cantwell. "We are talking about criminals continuing to steal the money of hard working Washington state families. I will not sit passively by and allow consumers to be gouged."

Background:

While the Senate has been considering proposals for energy legislation over the past two years, various investigations have unearthed Enron's "smoking gun" memos—detailing the company's schemes to drive up electricity prices—and other evidence leading the Federal Energy Regulatory Commission (FERC) to conclude that market manipulation was "epidemic" in western markets during 2000-2001. This energy crisis continues to take a serious toll on American consumers and businesses: it's been estimated that, as a result, the West has lost $35 billion in domestic economic product—in other words, a 1.5 percent decline in productivity and a total loss of 589,000 jobs.

While the Enron schemes are most familiar, numerous market participants have engaged in abuses throughout the country. At a time when our nation is struggling to recover from recession, Cantwell's bill would ensure that the kind of rampant manipulation that contributed to the largest electricity crisis in history is never repeated.

Cantwell is a member of the Senate Energy and Natural Resources Committee and the Subcommittee on Energy.