Bob Filner

Mr. FILNER

Mr. FILNER. I would say to those industries that really their survival is at stake, and yet they see a Republican President, and they may be Republicans, they feel they should not get into this. I will say to the businesses of California and the West and this Nation, for your own survival, tell the President that it is time to act. Tell the President that the Federal Government must intervene for our economic survival. He will listen to you more than he may listen to our Congress people here. So I beg you to ask. I thank our colleagues, the gentleman from California (Mr. Sherman) and the gentlewoman from California (Mrs. Davis) on the floor with me today. Apparently our time is up, but we will be back here every day to talk about this crisis, until this Congress and this President act on behalf of all of the consumers in this Nation.

Mr. FILNER. Any price increases?

Mr. FILNER. Mr. Speaker, I know the gentlewoman wants to show how we are dealing with the supply issue. I want to have the gentleman from California (Mr. Sherman) show through this chart that the crisis now that we are experiencing with the price is not primarily one of supply. We have supply. I would ask the gentleman from California (Mr. Sherman) to explain this chart, what these energy companies are doing to us.

Mr. FILNER. Any blackouts?

Mr. FILNER. I will tell the gentlemen, by the way, that because the situation in San Diego has become so grave with doubling and tripling of rates, with scores of businesses facing bankruptcy and closing their doors, the whole community is virtually united as saying we must get control of our future. We are going to establish in San Diego a municipal utility district where we can begin to get some leverage on the system. If we owned 1,000 megawatts of electricity, one-third of our needs, we could have tremendous impact on the whole situation. So we in San Diego, like the State of California in general, is moving toward a municipal ownership, to get out of, really, the heel of the cartel of energy wholesalers that is destroying our economy.

Mr. FILNER. Mr. Speaker, I wonder if I may bring my colleague, the gentlewoman from San Diego (Mrs. Davis), just to share with us some of the experiences that San Diego has had and what conclusions they lead for us to take in this Congress.

Mr. FILNER. Mr. Speaker, I thank the gentleman from California (Mr. Sherman) for those comments. Mr. Speaker, I would ask the gentleman from Ohio (Mr. Kucinich) to continue the outline of the Progressive Caucus.

Mr. FILNER. I yield to the gentleman from California.

Mr. FILNER. We appreciate the leadership of the gentlewoman from California on the Committee on Science and hopefully someday her chairmanship of the subcommittee. We are looking forward to her report on renewable energy sources. There are supposedly several plans that have been put on the table to look at this energy problem in its broadest sense. President Bush put out his energy plan several weeks ago. It had 105 recommendations. Not one of them gave any hope or any help to the western States for immediate relief. Overall, his plan is an unbalanced one that puts big oil and utility special interest friends of his who are already reaping record profits ahead of the consumers, all of us as consumers and the environment. He wants to drill in the Arctic and other pristine areas. There is no relief for consumers facing high gas prices and high energy costs. There is no help for the consumers out West who are being gouged by utilities. He wants to produce some of the fossil fuels and give tax breaks for nuclear plant construction. In fact, when his Secretary of the Treasury, I believe, was giving testimony to a congressional committee, he said on the safety record of nuclear energy, if you leave out Three Mile Island and Chernobyl, there is no problem with nuclear energy. That is coming from the Cabinet of this administration. He does nothing for fuel efficiency in his plan. The President claims to want to do something about it but slashes funding as we have just heard for energy efficiency and renewable energy by more than 25 percent. He delays putting in our fuel efficiency standards. He has rolled back such standards for air conditioners. He is using the excuse of the California crisis to roll back all environmental regulations, breaking his campaign promises on clean air, for example, and undercutting all kinds of other protection. And he benefits not the consumer or the average American but the oil and gas industry, the utilities, the nuclear and coal producers who have contributed, coincidentally, millions to the Bush campaign. There is another plan on the table, a plan that was devised by the Progressive Caucus of the Democratic Party. With us this evening is the chairman of that Progressive Caucus, the gentleman from Ohio (Mr. Kucinich) who will outline a plan which actually will help us in this crisis and not hurt us as the Bush plan does.

Mr. FILNER. Mr. Speaker, I just want to show this chart, which shows the coalition of organizations and individuals which support that concept in the Committee on Energy and Commerce, which is called the Price Gouging and Black-out Prevention Amendment. We can see not only all the governors of the western States, but farmers and businesspeople and working people and consumers, public safety people, health care providers, all of which support the end of the price gouging that the gentleman has advocated.

Mr. FILNER. I thank the gentleman from Oregon. We have, I think, shown that there is an incredible disaster both in being and looming further. We have shown there is a manipulated market that needs to be brought under control, that cost-based rates ought to be brought in in order to stem this tide while other solutions come about. And we know that there are long-range solutions involved in all this. We know that even though we are concentrating right now at getting the situation in California and the West stabilized through cost-based rates, we have to move into other directions in terms of renewable energy sources and a much different way of approaching our energy. One of the leaders in the Congress in making us think about these things has been the gentlewoman from California (Ms. Woolsey). I thank her for joining us and for her efforts on behalf of an energy future that will give us back some control of our own life.

Mr. FILNER

Mr. FILNER. Mr. Speaker, will the gentleman yield?

Mr. FILNER

Mr. FILNER. Mr. Speaker, we call on the President and this Congress to act today. I thank the gentleman from California, and I thank our colleagues from Illinois.

Mr. FILNER. Mr. Speaker, if I can sum up from my perspective and then give the gentleman a similar chance, California is being bled dry by a cartel of energy wholesalers. We are being charged at a rate of $3 billion a month, and the State is purchasing that because the utilities are bankrupt. Our first job is to get down those prices. We have legislation which virtually all of the Democrats and some Republicans from the States of California, Washington, and Oregon are supporting, which establishes cost-based rates for electricity in the western region. That will bring down the prices and stop the hemorrhaging, while the governor is programmed to build new plants and conserve more has its effect. We must bring down those prices. This Congress has refused to act and is going home for its Memorial Day recess without doing that. We have to move in addition, for the long range, and it really comes back to the same problem, because these cartels will not do the research for renewable resources, for sustainable energy. We could in California be pretty self-sufficient with photovoltaic cells if we brought down the cost and purchased in mass. We have to do more work in that. San Diego, as are other regions in the State, are moving toward a public power authority so we can have our own plant like the one that I described earlier. We can build and have some leverage in the system. We do not have to expropriate the San Diego gas and electric distribution system. At their rate, they will be very happy to do it. But we need some leverage of our own electricity and our own capacity so we can take control of our own future from this cartel. Whether we looked at gasoline in Chicago or whether we looked at electricity in California or natural gas as it flows, as the gentleman described, from Texas into California, the economic situation is the same. There is no competition, there is no market, there is a manipulated and controlled situation by a small group of major corporations. We must bring them under control, and we as different communities must establish our own sources to get out of their control. So I thank the gentleman, and I will give him the last word in the few minutes that we have left.

Mr. FILNER. And, the blackouts occurred at a time when our capacity for production theoretically is 45,000 megawatts, the demand in the wintertime when air-conditioning is not on is about 30,000, so we have a 30,000 megawatt demand, we have a 45,000 capacity. Economics 101 says there ought to be sufficient supply at a reasonable price. We had blackouts, and we had blackouts because of the situation that the gentleman described earlier. I wonder if the gentleman might share with us also the experience of those with public power; that is, there are 3,000 communities around this country that have public power. The City of Los Angeles, which the gentleman knows very well, produces its own power and distributes it. The City of Sacramento I think has its own power supply. Those cities and those municipalities, those areas that have public power are not under the control, for the most part, of this energy cartel. Does it work?

Mr. FILNER. Exactly. Not only were they making profits, I had thousands of people at plants in San Diego being sent home because their places of employment were blacked out or they had certain agreements with the utilities that they had to turn down their power during a stage-3 alert. So we have the incredible situation of blackouts in San Diego and other parts of the State, almost fatal collisions, by the way, at intersections as the lights went out, possible health fatalities, businesses. I had the biggest business in my district, one of the biggest businesses in my district come to me recently and say, they are going to have to leave San Diego and California because they cannot live with this uncertainty. So we have the power. The power is there. By the way, when we asked them why they did not produce, a TV station had talked to one of the people working there, and they revealed the logs and they said, they just turned it off. First they told me, well, we turned it off because there was environmental problems, restrictions, and we went to the air quality board and they said, that is a lie, there is no restrictions. They said there were mechanical problems, but the mechanics there said there were none. Then they said the system operator in the State did not ask them; it turned out that they did. So we have this incredible situation.

Mr. FILNER. There is a power plant in my district in southern San Diego County, the biggest power plant in my area, and in January during a stage-3 emergency that we had, stage-3 alerts, the biggest generator of their four at this plant, a 250-megawatt generator, was somehow removed from service. This was at a time of a stage 3-alert.

Mr. FILNER. And that is 66 percent profit.

Mr. FILNER. There is a myth that our colleague, the gentleman from California, the chairman of the Committee on Ways and Means said earlier today in a debate, California inflicted this upon ourself. Our environmental wackos overregulated and prevented plants from being built, and now we are suffering for it. I want to talk about something that is going on in San Diego that will put a lie to that. I have a friend in San Diego who was a builder of power plants around the country. He is retired. He received environmental awards from all over the Nation for his ability to build power plants, but in both an architecturally and environmentally sensitive fashion. He said last summer, I can build you a power plant, follow the environmental regulations, and it can be up and running in a fairly short amount of time. I can charge you what is called a cost-based rate which is roughly a nickel a kilowatt, and I will make money on it. I will make a profit, as I have always done. I will make sure that the people of San Diego have reasonably priced electricity. I will follow the environmental regulations. We are in the process of trying to get that implemented. We are calling it the San Diego community power project. It puts a lie to this argument that California did this to itself because of environmental rules. We can respect the environment. We can have reasonably priced electricity if we have people like the builder of this plant, who understand that they can make money without gouging families and businesses in California.

Mr. FILNER. I have heard it said never has so much money been transferred from so many people to so few in so short a time. We are being killed by the prices. The Federal Government must act or the whole economy is threatened. It is these same corporations that control this that have prevented real research and development and implementation of alternative sources of energy because they cannot control those sources. It is decentralized and one that is out of their power. So through photovoltaic and solar sales and wind power, we can in fact have energy sufficiency and independence without relying on these corporations; and we have to move in that direction. Yet this President not only does not do anything for California in his plan, but in his budget cuts research into alternative energy sources and cuts conservation programs. What is he doing for us. I cannot figure out whether it is a political attack, one out of ignorance or just plain, hey, my friends in Texas are telling me what to do and I am just going to do it.

Mr. FILNER. And they certainly took that opportunity. So we need cost-based rates. We have legislation to do it. This Congress can take it up today, tomorrow, and pass it and bring some relief to people in California. The Governor of California is doing everything he can to get out of the situation that the gentleman described, out of the tight supply situation. We have a dozen power plants online and getting into production. He is doing everything he can to encourage conservation with rebate programs and tax incentives to do this. The governor of California, however, has no authority to regulate the wholesale price, only the Federal Government can do so. So the Governor is working overtime. The legislature is working overtime, but they cannot bring down the prices because it is the Federal Government's responsibility. That is where we need to pass the legislation.

Mr. FILNER. This is the irony of the situation and the answer to our critics when we say we need what is called cost-based rates, established by the Federal Government, to get these prices under control. Cost-based rates means the generator of electricity can get the cost of production plus a reasonable profit. That is what it was under regulation, and it worked for 100 years. We want to return to that. Interestingly enough, when there are no caps on the price, there is, as the gentleman has described, an incentive to withhold production.

Mr. FILNER. It is amazing that an administration which stresses States' rights and wants to keep the government off our backs will not allow us to do that. It costs 2 or 3 cents a kilowatt to produce electricity. We are paying in California anywhere from 30 cents to 50 cents to $1. It went up to $2 last week. Could go to $5, who knows. The cost of production has no relationship to what they are charging us nor to the amount of electricity available. And the same for natural gas, by the way. Turns out that the El Paso Gas Company, which controls the pipeline into California, kept the pipeline empty to drive up the prices. So the guys who charge us for electricity say, we have to charge you more for electricity, the price of natural gas went up. Well, the price of natural gas went up because the cartel, which is a subsidiary of the same electric companies that are saying they have to pay this, shot up the prices arbitrarily also. It is the prices, stupid, to coin a phrase.

Mr. FILNER. I thank the gentleman, and we appreciate hearing from the Midwest. Mr. Speaker, my colleague, the gentleman from California (Mr. Sherman), and I, are going to try to discuss in the time that we have left the short-term and long-term solutions to this problem. It is clear that the prices are bleeding us dry in California; my colleague from California told us in 2 years from $7 billion to $70 billion. The short-term answer involves getting down those prices. The long-term answer, and we will discuss what the Governor of California is doing and what the President of the United States is not doing, is to make sure that we diversify our resources of energy, get into alternative and renewable sources, and begin the discussion of public power, which, as the gentleman knows, Los Angeles is very familiar with, and have so avoided our problems in the rest of the State. The prices have driven us to near bankruptcy in the State. Our major utilities are bankrupt. Sixty-five percent of the small businesses in San Diego County face bankruptcy this year. What should we do about these prices?

Mr. FILNER. I thank the gentleman from Illinois. I, like you, find it just inexplicable that we are going to be leaving for our Memorial Day recess and this majority refuses to act on this crisis.