05.22.07

Democratic Governors Join Cantwell in Taking on Gas Prices, Backing Gas Price Gouging Ban

Senate Committee has cleared Cantwell's price gouging measure; Cantwell calls on Bush to follow governors' lead on consumer protections

WASHINGTON, DC - Tuesday, U.S. Senator Maria Cantwell (D-WA) applauded 17 Democratic Governors for calling on President Bush to work with Congress to lower gas prices and ban gas price gouging. In a letter to Bush, the governors called on the president to "support federal legislation defining and penalizing gas price gouging" and to go after "any anti-trust or commodities violations." Earlier this month, the Senate Commerce Committee passed bipartisan anti price gouging legislation introduced by Cantwell as an amendment to a bill that would raise the combined average fuel economy for SUVs, cars, and small trucks.

"These 17 governors are at the front lines of this battle in their states to protect consumers from possible price gouging," said Cantwell, a member of the Senate Energy Committee. "To back them up at the federal level, we need the president to support a federal gas price gouging ban. We need to end years of elevated and volatile gas prices and give consumers confidence that the prices they are paying at the pump are fair and market-based. That means getting tough consumer protections signed into law, investing in alternative fuel sources, improving fuel economy, and giving the federal government the tools it needs to shed more light on oil and gas markets."

This week, the average nationwide price of gasoline reached $3.22 per gallon, the same price as the all-time, inflation-adjusted record high, set in March 1981. The average household in Washington state now pays nearly $3,000 more in gas each year than it did just six years ago.

Cantwell's bipartisan gas price gouging legislation (S. 1263), included in the Committee-passed fuel economy bill (S. 357), is based on Cantwell's measures to ban Enron-style manipulation schemes in the electricity industry. Her legislation would give the president the authority to declare national energy emergencies during which proven price gougers would be subject to new fines and criminal penalties. It would also make efforts to manipulate oil and gasoline markets illegal.

Under the legislation, the Federal Trade Commission (FTC)—an independent regulatory agency—could conduct investigations and fine companies for price gouging. The Department of Justice would enforce criminal penalties for gas price gouging during energy emergencies declared by the President. Energy emergencies could be declared during oil and gasoline market disruptions, similar to those that followed Hurricane Katrina. At present, there are no federal laws on the books that address price gouging for oil and gas, though 30 states have laws similar to Cantwell's proposal and it is modeled primarily on a New York statute that has withstood court scrutiny.

The governors of Kansas, West Virginia, New Jersey, Michigan, Pennsylvania, New Mexico, Arkansas, Arizona, Delaware, Illinois, Iowa, Louisiana, Massachusetts, Ohio, Oregon, Tennessee, and Wisconsin all signed the letter sent Tuesday to Bush.

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