Larry Craig

Mr. CRAIG

Mr. CRAIG. Mr. President, I called up the amendment No. 3047. I ask for its immediate consideration.

Mr. CRAIG. I ask unanimous consent the reading of the amendment be dispensed with.

Mr. CRAIG. Yes.

Mr. CRAIG. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. CRAIG. Mr. President, I call up amendment No. 3047 and ask for its consideration.

Mr. CRAIG. Mr. President, I rise after a great deal of consideration as to the amount of work that has been done on this energy bill by the chairman of the full committee and by a good number of interests. My colleague from Wyoming is on the floor. He spearheaded a group dealing specifically with title II, the electricity title, of this very large and important bill. He labored mightily over that. I was involved, and my staff was involved, in some of those discussions. But the reality became clear to me and others that the electrical title of this bill is such a very complicated, extended title-- attempting to rework and amend years and years of law and public policy that has built up, that has driven the capitalization of the largest electricity industry in the world and, frankly, one of the best--that without the kinds of detailed hearings that must come before a full committee of energy, we could not effectively and responsibly write this title in this Chamber. I have opined on many occasions here that this bill did not get the treatment of the committee, it did not get the treatment of the subcommittees, it did not get the treatment of the professional staff and all of those who are interested as stakeholders in dealing with this very critical title. As a result of that, after several weeks of consideration, I decided it was appropriate that we have a vote on the reality that we cannot get as far as we would want to get. So this amendment today strikes the electricity title and replaces it with consumer protection that is exactly the language currently in the bill, and the reliability provisions of that bill that did have full committee treatment, that has been voted on, on the floor of the Senate, and has been treated and accepted by the Senate as should these kinds of issues. A good many interest groups recognize the complexity of this problem. The House tried to deal with an electric title and couldn't--after months of consideration with the committee effort. It said: No, it is too complicated and we ought to step back from it. So their energy bill, passed in August, was silent on the issue of electricity. Whether or not we speak to it going into conference, if this bill ultimately gets to conference, there is a reality that we might not deal with it then. And there are provisions within this title that I strike to which many of us are strongly opposed. The electric title does need the full attention of the experts-- a clear, precise explanation of what the jurisdictional committee intends, and, my guess is, therefore could craft the appropriate language. I think the Senate owes the electric utility industry and the ratepayers nothing less than a full, open, and transparent process to get us there. We want to reform the electric industry. We need a national interstate transmission system. All of those are realities. We saw the problems in California when a State failed to deal with restructuring or deregulation in an appropriate fashion and created the disincentives that did not allow the investment in the marketplace. If we were to create those kinds of disincentives to send a multibillion-dollar industry scurrying trying to understand, but, most importantly, allowing the recentralization of authority and a Federal regulator, then my guess is we will have made a major mistake. I think that question is clearly on the table. Senator Murkowski, I, and others who work on that Energy Committee, and the chairman who is here in the Chamber--in discussing energy and electric restructuring over the last several years, and the phenomenal amount of hearings that were held on it before any language was attempted--laid down criteria we believed were important if we were going to do no harm to the ratepayer and do no harm to the billions of dollars of investments that are out there already in this industry. Those standards work: Deregulate where possible, streamline when deregulation is not possible, and respect the prerogatives of the States. I have added in the last several weeks of debate a fourth, an elementary principle: Know what we are doing when we legislate. And when we grant new authority, or change our delegation of authority to a regulatory agency, know the consequences. It is my guess at this time that you could not effectively do a side- by-side comparative of old law and new law in this title and begin to understand what its impact would be on the utilities of Georgia and their investments, their values, and their abilities to compete in a regional or a national market. That is what we ought to know. We know the importance of sustained, high-quality, reliable power to industry, to the consumer, and to the well-being of the economy of this country. Last month, we received a landmark Supreme Court decision on the authority of the Federal Energy Regulatory Commission to order transmission restructuring which has significant implications on the remainder of Federal-State responsibility and authority for regulation of public utilities. The Supreme Court's opinion in New York v. FERC demands our thoughtful attention. What we have not done here, because we have not been allowed to do it, is take this Court decision, lay it before the committee, bring the Federal Energy Regulatory Commission to the Hill, and begin to engage them in questions as to what they might be willing to do and what they sense their new authority is under this Court decision. Was that the intent of the public policy of our country, or do we allow the judicial branch to legislate in a way that grants substantial new Federal authority? It is not clear at this time. I think it is very understandable to most of us who deal in this phenomenally complicated area that we do not comprehend the reach of the Federal Energy Regulatory Commission as was and is now extended by the Court's decision. How far can the Commission push its authority now that the Court has said it has it? Those are the kinds of questions we ought to ask of ourselves for our ratepayers and for the utility commissions of our respective States and that which was once the responsible authority that created reliability and the stability of the industry historically. There are several other important questions which have been gnawing at me, and I think probably several of us, since the Court issued its opinion. For example, should the Senate now examine the need for legislation to protect native load customers? There are many who say: Yes, we should because we have a responsibility to the initial intent of the law and what it has done for the strength of our States' systems. We need to understand. Is FERC going to aggressively start restructuring in what appears to be a real, lively, unbridled authority granted by the Court? We have not asked the question. FERC has not been before the committee. The committee hasn't functioned. Of course, that decision came just as we were engaging here on the floor, which I believe dramatically shifts the pendulum and the equation as it relates to this issue. We all know that FERC has pursued an aggressive restructuring program and to establish regional transmission authority--a vital, stand-alone transmission business, as the Commission called it in 1999. Before we enact new law, we need to act to take into account that reality. How does FERC, through the Supreme Court decision, affect RTO, the regional transmission authority? We have already heard their expression pre-Court decision. Now we need to understand their intent post-Court decision. Why would you, in an effort to restructure the electrical industry of this country, shift all of the power that once rested in many instances in the 50 States' commissions to a central Federal authority with phenomenal power over the ability of an industry to operate and to capitalize and, therefore, provide service to the consuming public? Not one word in the energy bill addresses the issue of the regional transmission organization. How can we enact an electric title without taking RTOs into account? That authority appears at this moment to be sweeping, and with substantial impact on the very title that is currently by amendment and by process here on the floor in this energy bill. Even if we choose to remain silent on this issue, our choice should be a conscious one clearly expressed and based on a complete record, and at a minimum after hearings in the committee with full jurisdiction. That is what we ought to be doing. That is what we are not doing. I say it is time we step back and stand down and pass the energy bill absent this--there is a lot of good stuff in it, and I hope there is more to come--and do as we ought to do before committee. In my March 14 floor statement, I discussed why provisions covering electricity mergers and market-based rates and a refund effective date give me concern. Are those important issues? You bet your life they are important. I would like to now address briefly a couple of the provisions that are also of great concern to me--the market transparency rule and civil penalties. Oh, my goodness, Larry. What are you talking about here? I am talking about new authority, new power, and real questions being asked that I believe this title moves. We ought to know about it. Market transparency rules: I find the title of this section a great misnomer. In a nutshell, I consider this section potentially anticompetitive as any piece of legislation we could pass. Yet we are talking about competitive markets. We may be creating a phenomenally anticompetitive incentive within the legislation. The provision says that as soon as practicable, competitors must release information about price and quality or quantity of sales in interstate commerce. As far back as 1921, in the American Column and Lumber case, the Supreme Court deemed their practice of contemporaneous release of individual prices and sale volumes by competitors a violation of antitrust law. That is the law. That is the ruling. That is the understanding; therefore, that is the practice. Have we changed it? It appears we have. Is that anticompetitive? It darn well may be. We ought to know it, and we ought to know how it impacts the capitalization of the economic base of this industry. Economists say this practice allows a cartel to enforce its rules. Some of my colleagues cry market manipulation at the first sign of price increases. Malefactors in the industry could not think up a better scheme of market manipulation than this one, at least that is my belief. This section allows the Commission to exempt commercially sensitive information. If we really mean that, we should ask the Commission to repeal the requirements of contemporaneous individual price and volume information. And if not, what do we mean by commercially sensitive? Are we simply going to allow that to be interpreted by the FERC? Some of their interpretations took them well beyond the law or the intent of public policy over the last several years. The Edwards Dam case: Never did we say in the law they had the right to take down a dam, but they chose to do it--or to at least establish the precedent to do so. I only cite that as an example because it does show the extreme power and authority of the FERC. The civil penalties section gives the Commission authority to impose penalties in electric cases beyond what it has now in hydro cases. Unlike refunds, civil penalties have no necessary relationship to economic damage. We need to rest assured that we give this kind of authority to agencies that exercise good judgment. Here, I fear, we have not. I recall the Commission's use of its civil penalty authority in the hydroelectric arena, and in particular a noteworthy case 10 years ago known as the Wolverine hydro. The U.S. Court of Appeals for the District of Columbia told of a case in which the Commission extracted a penalty of $2 million for a project that operated without a license for a few days a year. I will say that again: a penalty of $2 million for operating for a couple of days a year out of license. Is that reasonable? Is that right? It does not sound right, but they had that authority, and they did it. Worse, the DC Circuit never reached the issue of whether the $2 million constituted an excessive fine. The court held that the Commission overreached in the first place, so the concept of operating excessively in the area of civil penalties has never been judged. The law said that the Commission's civil penalties authority extended to violators of existing license conditions, not those operating without licenses. We do not need heavyhanded enforcement in the electricity area lest we scare off investment. Maybe the Commission has changed, but we need to inquire of the Commission's intent and its desire to use this provision in the law. The only way you get that done is for the chairman of the committee to convene a hearing, bring the Commission, and build the public record: What is your intent, Chairman of the FERC? How do you plan to use this title? And what do you think your parameters are in your authority? Is it sweeping? I would suggest that it is. And I would suggest that if that authority is real, as I have interpreted it, and as I think the courts have been silent to it, then do you scare off investment? I think there is a strong possibility you do. All these points collectively explain my grave reservations about moving toward the electrical title. The Senate's intent, usually expressed in jurisdictional committee reports, is missing. We do not have the Senate's intent, unless you can pick it up haphazardly and piece by piece through the Congressional Record. It is missing. And I fear this omission can only be adverse to many States, including my own, that will be affected by this very complex piece of legislation. FERC, most assuredly, interpreted these provisions in ways that would expand its authority. Few bureaucracies ever attempt to limit their authority. And FERC has shown very recently that it is loathe to limit its authority. My suggestion is, title II of this bill just hands to the Federal Energy Regulatory Commission new authority, expanded authority. And without our effective interpretation and/or committee reports, and the expression of the intent of this Senate as it relates to the Supreme Court decision, we have set them free, in many instances, to do as they would judge is in the best interest. I need only to reference, as I did earlier, the Edwards Dam case. That is the one where we gave them no authority in the law to take down a dam, but they did. For almost 80 years, the Commission never saw fit to interpret part 1 of FPA as giving the authority to order a licensee of a hydro project to take down a dam at the end of its original license term, and for good reason. As I have already stated, there is no authority in the statute for the Commission to do that. Indeed, Congress addressed, in 1968, the very issue of FERC, with attempting to address, in 1999, in the Edwards case, what happens to dams at the end of the original license term. Congress amended part 1 of the Federal Power Act, added sections 14 and 15, to allow for the issuance of nonpower licenses in the event a licensee was no longer able to continue operating a power project. In addition, those sections required payment to the licensee for surrendering its right to operate the project. So it was a bit of a shock to me when the FERC ordered the main licensee in the Edwards Dam proceeding to stop operating its project and pay the huge cost associated with removing the dam. That is what they did. FERC was even shrewd enough to procedurally block an appeal to the Federal court. So they worked their will outside the law. And here we are giving them vast new authority, without defining, without prescribing, without sideboards, in any way, in my opinion, limiting them, at least in the backwash or the shadow of a court, saying: Regional transmission, FERC, have at it. How can we ignore these kinds of actions? We should not. And if we are responsible in writing this kind of detailed bill, we will not. But we have. That is why I am here. That is why the amendment is before us to strike these provisions and allow the chairman to convene the committee, deal with this separately, and deal with it responsibly. With that knowledge, how can Senators be comfortable with what is available and what may become law in this pending legislation? Does anyone here today seriously doubt that the recent Supreme Court ruling in favor of FERC, in its quest to create a national grid, will not result in serious disagreements between FERC's desire to control restructuring of our electrical system and the individual desire of States to protect the important ratepayer policies within their borders? This is a major concern of mine. I am not sanguine about all that we have done and the way it has been drafted. That is why I believe that clearly all of us deserve the option, deserve the choice, to make the decision here with this amendment. Do you want it or do you believe that some of what I have said is valid enough that we ought to ask the authorizing committee, the committee of responsibility, and its professional staffs, to openly engage the FERC, and all of those other issues, to allow us to deal with this in an important way? There are ample reasons for us to deal with other issues, but let me give you a couple of those reasons. I have a list of the organizations that, on examination of my amendment, and over frustration with this title, have agreed that they believe it is important to support my amendment to strike: the American Public Power Association, Consumer Federation of America, International Brotherhood of Electrical Workers, the Electricity Consumers Resource Council, U.S. Conference of Mayors, Consumers for Fair Competition, National Electrical Contractors Association, Plumbing-Heating-Cooling Contractors Association, Air Conditioning Contractors of America, National Association of State Utility Consumer Advocates, Transmission Access Policy Study Group, AARP, Public Citizen, Consumers Union, Citizens for State Power, Conservatives for Balanced Electricity Reform, Americans for Tax Reform, and the Small Business Survival Committee. Those are ones that have just come to us in the last few weeks, as they had the opportunity to examine the title, what is in it, and the amendment. There is a good deal more to be said. I see colleagues in the Chamber who are opposed to the amendment. Let me wrap this up with a concluding statement. My colleague from Wyoming and I are very committed to building an energy policy that allows greater production. My colleague was asked if he would help the administration facilitate trying to bring about an electrical title on which we could agree. He has worked mightily to do so. In some areas, he has succeeded. But in the areas I spoke to, I believed these were areas that he could not go, nor could any of us, because we simply don't know the impact. It is important that we look at the big picture, as we are trying to define all of the players within that big picture, enter the Supreme Court, extending greater authority or at least clarifying to FERC what FERC thought it already had. Is it not right, most importantly, is it not responsible of us, as public policy crafters, to make sure that which we craft works? There are billions of dollars riding on this amendment and this bill and this title. The reality that if we do it right, when every consumer throws the light switch, the light will come on; when every consumer touches the on button on their computer, the computer will come on; that moms and dads working will know that their security systems are on and that their children are safe. The reason I mentioned those things was because when you do it wrong, as they did it in California, all of those things become questioned. When the lights go down or the lights go out, the economy of this country shudders. Let us not be so irresponsible as to craft a title without the effective vetting of it, without the responsible hearings, knowing where we are going, taking authority away from commissions at the State level and resting it in a central all-powerful Federal agency without clearly understanding its consequences. What my amendment does is causes us all to take a deep breath, step back, not rush to judgment, leave in the reliability, because we have done that. We have vetted it. We have been heard on it. The committee has operated. The Senate has passed it. Deal with the consumer protection. But on all of this that is so very critical to the long- term stability of the electrical industry and the electric system of our country that we have all created phenomenal reliability on, let us step back for a moment and take a look at what we are doing and make sure we are doing it right. I fear we are not; I fear that we lay a great deal of a very fine industry in jeopardy to central all-powerful authority. Bad mistake, wrong choice. I yield the floor.

Mr. CRAIG

Mr. CRAIG. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. CRAIG. I yield 1 minute to the Senator from California.

Mr. CRAIG. Madam President, I ask unanimous consent that I be allowed 30 seconds to close.

Mr. CRAIG. Madam President, may I inquire how much time is remaining on my side?

Mr. CRAIG. Madam President, I ask for the yeas and nays.

Mr. CRAIG. Madam President, let me close by reminding my colleagues that reliability and consumer protection remain in this bill. Electrical advocacy groups, consumer groups, and utilities, some 18 across the country, strongly support the amendment to take down the majority of this title. Why? Because it has not been reviewed. It has not been vetted. It has not been brought up to the Federal Energy Regulatory Commission. What is your authority? How do you plan to use it? We are extending tremendous new authority to a central, Federal, regulatory body. That should not be where this Senate goes at this time. The House could not deal with it. It was much too frustrating and much too complicated. We did not deal with it in committee in an appropriate, comprehensive way. Yes, there have been deals made. Yes, there has been discussion. Let's step back, take a deep breath, and review this, as we should. I ask my colleagues to support me and the repeal of this title, leaving in place the reliability and the consumer protection. I yield the floor.

Mr. CRAIG

Mr. CRAIG. Mr. President, I thank my colleague, the ranking member of the Energy Committee, Senator Murkowski. Mr. President, I ask unanimous consent to set the pending amendment aside for the purpose of consideration of this amendment.

Mr. CRAIG. Mr.President, I send an amendment to the desk.

Mr. CRAIG. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. CRAIG. If the Senator will yield, he makes an important point. In commercial logging operations that are qualified under the U.S. Forest Service--the legitimate timber sales--some of those logs, once cut, and beyond the 12-inch diameter size that get to the mill, that are deteriorating or have, as you call it, the rot of the center and cannot be milled, put on a mill head rig and moved, fall apart, I think that is residue by anyone's definition when it is determined, at least in the mill yard, that no commercial value can come from it. Clearly, I think that falls under that definition. But I appreciate the Senator mentioning it. What we are doing, along with passing legislation, is establishing, by the record of the floor, what is the intent of Congress. And I think that is the intent of this legislation. I thank the Senator for yielding.

Mr. CRAIG. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. CRAIG. Mr. President, I rise today to introduce an amendment that would modify the definition of biomass from national forests by clarifying that biomass may come from slash, brush, or mill residue from any size tree that may be harvested, as well as from thinning trees that are less than 12 inches in diameter. The Bingaman amendment defines the term ``biomass'' on national forest lands as only that material generated from tree commercial thinning or slash or brush. Our respective staffs have worked out language that is acceptable to the managers. I appreciate his staff's cooperation in addressing these concerns. Both Senator Murkowski and I have been concerned that mill residue, slash and brush from normal harvest activities did not qualify under the construct of Bingaman amendment No. 3016. I have also expressed concern about smaller logs that are sold as commercial timber that could be utilized as biomass in some market conditions but would not qualify under Bingaman amendment No. 3016. This amendment I am now offering addresses all of our concerns. We have 39 million acres of national forest land at high risk of catastrophic fire. We have an additional 24 million acres that have suffered insect and disease attacks making them highly susceptible to fire as well. There are over 49.5 million acres of trees in the 9- to 12-inch diameter class that need to be thinned to reduce the risk of catastrophic fires and to allow those trees to grow to full and productive maturity. I am pleased that we have addressed the fundamental problems that cause so many of my constituents concern. I have several biomass co-gen operations in my State that are fed largely from hog fuel off the public lands--the national forest land. I think this clarifies the issue. I thank the chairman for his cooperation.

Mr. CRAIG

Mr. CRAIG. Mr. President, I rise today to introduce the Rural Health Care Facility Improvement Act. Traveling throughout my State of Idaho, I have heard from many people about the need for additional funding to keep rural health facilities operational and up-to-date. After doing further research, I have found that this is true in all States in virtually all rural areas. For this reason, I am introducing the Rural Health Care facility Improvement Act. This bill would allow for $250,000,000 million in guaranteed loans to be available to rural health care facilities. Individual facilities could borrow up to $5,000,000 to be used for two purposes. First, to allow for capital improvements to their facility and equipment and second, to allow for the purchase of high-technology equipment. Providing health care services to much of rural America has become increasingly difficult in recent years. During the 1970s, rural communities thrived with economic expansion and unprecedented population growth. Rural health providers represented valuable institutions offering an array of medical services to their communities. Now many of these rural communities are struggling to maintain critical health care facilities. We all know that rural health care facilities are a vital part of the infrastructure of rural communities and the collapse of health care services in many areas often contributes to the further decline of rural communities. That's why it is so important to make sure that rural facilities have access to funds to keep them operational. In the 1990's, rural health care providers have begun to rally in the face of this challenge. They have developed creative ways to meet the needs of their communities with their limited resources. This legislation is one more way to help those who are working to guarantee health care in rural America. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. CRAIG

Mr. CRAIG. Mr. President, I rise today to introduce the Rural Health Care Facility Improvement Act. Traveling throughout my State of Idaho, I have heard from many people about the need for additional funding to keep rural health facilities operational and up-to-date. After doing further research, I have found that this is true in all States in virtually all rural areas. For this reason, I am introducing the Rural Health Care facility Improvement Act. This bill would allow for $250,000,000 million in guaranteed loans to be available to rural health care facilities. Individual facilities could borrow up to $5,000,000 to be used for two purposes. First, to allow for capital improvements to their facility and equipment and second, to allow for the purchase of high-technology equipment. Providing health care services to much of rural America has become increasingly difficult in recent years. During the 1970s, rural communities thrived with economic expansion and unprecedented population growth. Rural health providers represented valuable institutions offering an array of medical services to their communities. Now many of these rural communities are struggling to maintain critical health care facilities. We all know that rural health care facilities are a vital part of the infrastructure of rural communities and the collapse of health care services in many areas often contributes to the further decline of rural communities. That's why it is so important to make sure that rural facilities have access to funds to keep them operational. In the 1990's, rural health care providers have begun to rally in the face of this challenge. They have developed creative ways to meet the needs of their communities with their limited resources. This legislation is one more way to help those who are working to guarantee health care in rural America. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. CRAIG

Mr. CRAIG. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. CRAIG. I strongly support what the Senator from Wyoming has brought to the floor. As we have moved to restructure the electrical systems of our country, the Senator from New Mexico sweepingly turns it into a Federal single authority without the kind of flexibility we have sought. The Senator from Wyoming is absolutely correct. What we have had has stood the test of time. Western Governors believe in that. If you want to take the authority away from the States and put it with the bureaucracy in Washington, DC, then you would oppose the Senator from Wyoming. I believe that is exactly the opposite direction in which we are heading. Therefore, I hope my colleagues will support the amendment dealing with the reliability issue of this important title.

Mr. CRAIG. Mr. President, I believe under the unanimous consent agreement I have 25 minutes.

Mr. CRAIG. Mr. President, we are discussing a very important amendment to a very complicated bill that will once again require a Federal mandate to meet a specific goal; or should we allow our States, through the incentive of the marketplace, to meet the goals relating to certain levels of energy production being of a given type. The reason I mention this is that, for the past couple of weeks, we have witnessed an unprecedented attempt to write very complex legislation on the floor of the Senate--an electricity title of an energy bill. Three years ago, Senator Murkowski, then serving as chairman of the Energy and Natural Resources Committee, on which I am privileged to serve, laid out three criteria for action as we move toward the development of a comprehensive energy policy. Deregulate where possible; streamline when deregulation is not possible; and the third, respect the prerogatives of the States. While that was not a mandate of the committee, it was certainly something to which all Members largely agreed. To that, I add a fourth elementary principle that I think is pertinent in crafting the legislation: Know what we are doing when we legislate and when we grant new authority or change our delegation of authority to a regulatory agency. In other words, look at the whole and not just each of the pieces now scurrying to the Chamber to be attached to this Title of the Bill. Title 2 fails all four tests. The approach we are taking to create this Title is simply too dangerous for me: Trying to write complex legislation without understanding it, without allowing our staffs in a bipartisan way to collectively make sure all the pieces fit together. Somehow politics leads us to this very precarious endeavor. A few general observations before I go into the provisions of this title that the Senator from Vermont is amending. We have this month received a landmark Supreme Court decision on the authority of the Federal Energy Regulatory Commission to order transmission restructuring that has significant implications on the balance of Federal-State responsibility and authority for regulation of public utilities. The majority opinion requires careful analysis in light of the statements, on the one hand, that the Federal Commission could not assume jurisdiction over retail transmission without possibly running afoul of the Federal Power Act that gave jurisdiction to States over retail sales, and, on the other hand, that the Commission could take control if it makes certain factual findings. Mr. President, what have I just said? Has anyone really, here, understood the intricacy of what I have just said. Are we, today, measuring our actions against what the Supreme Court laid down recently? We must know how far the Commission can go now and how far we want it to go before we enact this law. Yet there is fundamentally no effort to make that happen. The Commission has pursued a restructuring program to establish regional transmission organizations, a virtual stand-alone transmission business, as the Commission called it in 1999. Before we enact a law, we need to carefully study that new reality. How does the Supreme Court's decision in New York v. FERC affect those regional transmission organizations or RTOs? I note also that in all these hundreds of pages of comprehensive energy bill, not one word addresses the issue of regional transmission organizations. How can we enact a title on electricity without taking RTOs into account, now that the Supreme Court has ruled? Yet we are not doing that. If we are to call the electric title ``comprehensive,'' then we have just taken a big chunk out of it, letting what the Court has said stand without explanation in the context of the current policies of the Federal Energy Regulatory Commission. Even if we choose to remain silent on this important topic of the day, our choice should be a conscious one, clearly expressed and based on a complete record and, at a minimum, after hearings in the committee of jurisdiction, not the lapse of haphazardly working out numerous specifics on the floor of the Senate. We are now in a scurry with amendments, one that has just been offered and one that is about to be offered. Staff are over speaking with the Budget committee right now, seeing if amendments violate the Budget Act. Why? Because they were never tested, discussed, or reviewed in jurisdictional committees. So we are literally at this moment doing something that to my knowledge rarely occurs on the floor of the Senate. Many experts and the administration's ``National Energy Policy Report'' note that this country needs more investment in transmission. Better returns bring investment. The Commission, in its RTO rule in 1999, provided for certain kinds of price reforms to make investment more attractive. This title has not one word on the reform of transmission rates or prices. Even if we conclude that it is not necessary to address the issue in a statute because we support the course that the Commission is on, our conclusion should come from conscious choice after hearings in the appropriate committee--not, as I have already said, the lapse of haphazardly legislating on the floor. If you read these provisions, and I have, you will notice that, except for repeal of the Public Utility Holding Company Act of 1935 and the Public Utility Regulatory Policy Act of 1978--two obsolete statutes, I think most recognize, whose repeal I support--not one word in the title takes authority away from the Federal Government. So as was our intent in 1992 to move electrical production in this country away from a structured environment, we now have an amendment on the floor that takes us back to Federal mandates and Federal controls under the Federal Energy Regulatory Commission. I would like to spend a few minutes now, before my time runs out, on some of the other provisions within this electrical title. Mr. President, let me assure you. At the end of the day, this is what I plan to do. I have filed at the desk an amendment, an amendment that would strike the electric title as it is proposed and amended by the actions of the Senate. In striking it, my amendment would replace the reliability language that was just put in this afternoon, and would include the current language in the bill repealing PURPA and PUHCA. It would also include consumer protection language that is currently in the bill covering information disclosure, consumer privacy, and involuntary slamming and cramming. These provisions address issues that have been debated in Committee and considered for quite some time. The provisions offered fall within a general consensus that has evolved over the several years. These provisions will do no harm, and will advance important solutions to problems that have hobbled efforts to assure that our electricity system remains the most reliable in the world as well as ensure that consumers of electricity are protected. Leaving the Title as is does not advance deregulation, or a reform, but reregulation and a move towards the centralizing of Federal authority at the Federal Energy Regulatory Commission. Let me go to a provision in the bill, if I can: electricity mergers. The provision raises the floor on merger review to $10 million from $50,000. How many transactions does it affect? I doubt that anyone has any idea. There have been no hearings, no analysis of the market to determine the impact of this proposal. More importantly, section (a)(1)(D) gives the Federal Government jurisdiction over acquisitions of generating plants, unless they are used exclusively in retail. Utilities sell at wholesale and retail, largely from the same plants. They don't create separate generating facilities for those kinds of purposes. This section blurs the distinction between regulation of retail suppliers of electricity, traditionally the province of the States, with the regulation of wholesale supply of electricity. Why? Have States not been vigilant? Have they been too restrictive? Will the Federal Commission now preempt State procedures for assuring adequate supply? Will the Commission now use generation acquisitions as a club to force restructuring, as it did with mergers previously? No one knows the answer to what I believe is a significant question that I have just asked. Yet if we had done our homework in committee, those answers would already be on the table. You or I may agree or disagree on them, but at least we would not be on the floor asking what is going on and what are we doing. On the floor we cannot swear in witnesses and ask questions. We cannot deliberate and write a committee report. Finally, on mergers, paragraph (5) says: The Commission shall, by rule, adopt procedures for the expeditious consideration of applications . . .. I like that. It goes on to say: Such rules shall identify classes of transactions or specify the criteria for transactions that normally meet the standards established in paragraph (4). What does ``normally'' mean? If you have ever watched these kinds of transactions or determinations, then you better understand what the word means because there is a long history of meaning as determined by Courts of law. In the vacuum of the floor deliberations, we don't know nor will FERC understand our intent because they will have to thumb through pages and pages of Congressional Record instead of a full committee report. Going further, if the Commission does not act within 90 days on these transactions, such application shall be deemed granted. Maybe that is fine. Now comes the hook: Unless the Commission finds that further consideration is required to decide the issues and the Commission issues one or more orders tolling the time for acting on the application for an additional 90 days. What am I saying? How complicated is that? Is there a clear understanding of what is intended here? The provision appears to permit the Commission to recoil from the very speed the proposal is attempting to introduce. As I said, I am generally for speed in decision-making, within reason, so that it isn't dragged out month after month and hundreds of thousands, if not millions, of dollars are lost and ultimately recouped from the ratepayers. Under this provision, as I read it, the Commission could take away with one hand what we have required with the other. What standard do we set here to make sure FERC doesn't toll away the 90 days into long delay? How does FERC intend to use this loophole? What has FERC done in the past? We cannot know because in the Chamber we cannot hold a hearing to get an interpretation from the Commission itself or legal and consumer groups as to what they believe the intent would be and how they would choose to carry it out. That is the reality. Let me touch on one other subject, market-based rates. This section in the legislation on the floor would tell the Commission it can do what it wants because this section says it shall consider ``such factors as the Commission may deem relevant.'' That is a phenomenal grant of authority. The Federal Commission can use this as a club for forcing restructuring, as it has in the past forced, and it can again force utilities to buy and sell electricity against their will, subordinate capital retail consumers, reveal proprietary information, and join regional transmission organizations. Each of these goals appears very much to be in the Commission's sights as we speak. The section lists possible factors: ``the nature of the market and its response mechanisms.'' What does ``the nature'' of the market mean? Response mechanisms? What kind? And to what? To me, the best response mechanism we have is the law of supply and demand. But that is not necessarily the response mechanism at which the Federal Energy Regulatory Commission would be looking. My colleagues may argue that the Commission knows what it means. Maybe so. But we need to know what this means before we give the Commission such vast authority. Revocation of market-based rates in section (f) says FERC shall set the just and reasonable rates by order. Under what terms? From the time it does so forward, or can FERC subject utilities to open-ended retroactive refunds, as it is trying to do now? Of course, in all of those situations we have seen the frustration that has been brought about by the attempt of FERC to do this recently. We don't know because we are legislating on the fly again without committee deliberations. How about a refund effective date? This section changes the date from which the Commission can order refunds of existing rates. Current law makes it, at the earliest, 60 days from the complaint or FERC investigation. This gives utilities time to digest the complaint to know the extent of their jeopardy. Sixty days also gives companies time to secure financial hedges and, most importantly, in this era of post-Enron disclosure, to make timely disclosure to the investors, the shareholders, and security regulators. Perhaps other considerations of consumer protection outweigh these harms. But can anyone tell me what they are? Has the current law harmed anyone? Will this fix any harm? This would not have appeased my colleagues from California two summers ago, I can tell you that. We cannot know when we legislate from the floor. I could go on. My time is running out. I will speak more about this possibly tomorrow and on Monday because I want to walk my colleagues through the substance of this title and to justify why I think it is necessary to strike this Title and replace consensus provisions. We must do no harm and we do no harm by establishing not only reliability but by repealing obsolete law--PURPA and PUHCA and by putting in the kind of consumer protections that all of us, or most of us, have agreed are fitting and proper. That is what we ought to do in the Senate. But there is a rush to judgment today in a time when the committee has had no opportunity to hold this fine print up to the light of day and to have our staff in a bipartisan way--our professional staff who have dealt with this law and the Federal Energy Regulatory Commission for years--to examine it and at least give us the reasonable interpretation of what all of this might mean. If I have confused anyone today, I hope I have because this is phenomenally complicated law. My guess is that most of my colleagues have not read the bill. If they had, they could not understand it. That is in no way to impugn the chairman of the committee. It is his bill. My guess is he is ready, and certainly his staff is. But when it deals with the kind of complications that I bring out and the simple interpretation that can turn a utility on its head, destroy hundreds of millions of dollars of investment, or redirect it in another manner, it is time we understand what ``normal'' means in the eyes of the Federal Energy Regulatory Commission, and a lot of other words that are now injected into what could become new utility law for this country. I will conclude my remarks for the day. I yield the floor.

Mr. CRAIG

Mr. CRAIG. Mr. President, I rise today to discuss the renewable fuels provision in the energy bill that we are debating. Renewable energy sources are an increasingly important part of our energy generation, and it is clear that they will only continue to increase in importance. Thus, the debate is not over whether or not we will develop renewable energy resources, but how we will do so. Throughout my career in Congress, I have supported and led efforts to explore the development and promotion of renewable fuels. I have done this for several reasons including their value in offsetting our nation's dependence on foreign sources of energy, their environmental benefits, and the potential economic opportunities for agricultural producers and rural communities. Clearly, hydropower is our greatest renewable supply. About ten percent of our nation's electricity is from hydropower. However, another very promising renewable energy source with great potential is ethanol, and this is the area where I want to concentrate my discussion of renewables. Ethanol has already proven its importance to the nation. Its use as part of the clean fuel program has dramatically reduced air pollution in many cities across the nation. In fact, cities around the nation have found that using fuels with an ethanol blend help them to meet federal clean air targets. Ethanol also helps us to take a step closer to energy independence. By increasing our use of ethanol, we will rely less on imported foreign oil and more on America's farmers. Another benefit of ethanol is that, at the same time it helps the environment and makes our nation more energy independent, it also helps our rural communities. As a rancher in Midvale, Idaho, I believed--and still do--that energy can be a value-added opportunity for agriculture and I have worked to advance technological opportunities for ethanol and other bio-fuels. Currently, ethanol uses around seven percent of our nation's corn crop, and ethanol production facilities are an important economic resource in many states, including my own. Without this economic stimulus, many rural communities, which are already poorer and have higher unemployment than the rest of the Nation, would be hurting even more. For these reasons, I have always been a supporter of ethanol. As part of my efforts to promote it, there have been numerous times in the past when I supported legislation to help our nation develop its ethanol industry. For example, I was proud to join a majority of Senators in voting to support the 5.4 cent per gallon tax credit for ethanol, which ensures the ethanol tax credit will be in place until at least 2007-- something crucial to existing ethanol plants and to those considering new production facilities. I also led an effort, in cooperation with the American Soybean Association, in the 105th Congress to ensure that biodiesel was considered an ``alternative fuel'' under the Energy Policy Act of 1992 (EPACT). My legislation, which was passed by Congress and signed into law by the President, now allows fleet operators to purchase vehicles powered by biodiesel under the requirements of EPACT. However, more needs to be done. Ethanol and other renewable energy resources must be encouraged in order to protect our environment and help our quest for energy independence. This bill has many important provisions relating to ethanol, and I want to encourage my colleagues to support these provisions. The increased use of ethanol that would occur if this bill passes will be good for the environment, good for our energy independence, and good for our farmers. It is much better to rely on the farmers of Idaho or Iowa or Kansas for our energy needs instead of Saddam Hussein. I look forward to working with the Bush administration, my colleagues in the Senate, and my constituents to develop a comprehensive energy policy that includes a new and strengthened resolve to develop domestically grown renewable sources of energy. The ethanol language in this bill is an important step in that direction. Bio-fuels, including ethanol, can and should be an important part of our path to energy independence, and I urge my colleagues to support the renewable fuels provisions in this bill.