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May 25, 2001: Feinstein Calls for Hearings on Enron Influence of Bush Regulatory Agency

Senator Dianne Feinstein (D-CA) calls for the Senate Committee on Governmental Affairs to hold hearings on a possible improper relationship between Enron and the Federal Energy Regulatory Commission (FERC). Her call for an investigation is prompted by media reports of Enron CEO Kenneth Lay pressuring FERC chairman Curtis Hebert to deregulate the energy industry in ways favorable to Enron (see August 14, 2001). Feinstein writes to Senator Joseph Lieberman (D-CT), the ranking member of the committee, “Despite evidence of manipulation and price gouging in both the electricity and natural gas markets in California and the West, and a finding by FERC last November of ‘unjust and unreasonable’ rates, the commission has failed to take the actions necessary to bring reliability and stability to the marketplace… [I]t is clear that the citizens of the United States, especially the people of California, who are suffering from FERC’s failure to do its job, deserve an investigation and full public hearing into what happened. FERC is a $175 million a year agency charged with regulating the energy industry, and it would be unconscionable if any of the nation’s electricity traders or generators were in a position to be able to determine who chairs or becomes a member of the commission.” Lay is accused of forcing Hebert from his position in favor of another, more Enron-friendly chairman, Pat Wood. Feinstein adds, “Since FERC has refused to fulfill its legally mandated function under the Federal Power Act to restore ‘just and reasonable’ electricity rates, we need to ask whether undue influence by the companies that FERC regulates has resulted in its failure to act… In California, the total cost of electricity in 1999 was $7 billion. This climbed to $28 billion in 2000 and is predicted to reach $70 billion this year. At the same time, with FERC refusing to act, power generators and marketers have made record profits. The people of our nation deserve a full investigation.” [US Senate, 5/25/2001]

Entity Tags: Joseph Lieberman, Curtis Hebert, Dianne Feinstein, Federal Energy Regulatory Commission, Kenneth Lay, Pat Wood, Enron Corporation

Timeline Tags: US Environmental Record

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