WASHINGTON, D.C. -- Washington Attorney General Christine Gregoire told a Senate Committee here today that the energy issue is a "west-wide" problem that "is not just about legalities and economic theories, but about the day-to-day lives of people, our businesses, our schools and our environment."
Gregoire, testifying before the Senate Committee on Governmental Affairs, said she is encouraged that the Federal Energy Regulatory Commission is taking new action on the West's energy situation. But she added that it is too early to tell if the commission's order issued Monday will provide just and reasonable rates for consumers.
"FERC needs to monitor energy prices and enforce Monday's order to ensure we have just and reasonable rates," Gregoire said. If the order doesn't work, she said FERC should take immediate action. "Inaction by the commission is too detrimental to consumers," she added.
Gregoire told the committee energy rates in the West have been "unjust and unreasonable" since June 2000 and that FERC failed to respond in a timely way. As a result, she said, FERC should order refunds to utilities and that the refunds should be passed on to consumers in the form of rate relief.
Noting that FERC has a statutory mandate to ensure rates in the wholesale market are "just and reasonable," Gregoire added, "FERC has failed to fulfill its statutory mandate in a timely way. It has failed to ensure that rates are reasonable and to protect the public interest it was established to protect."
Because of concerns that Western consumers may have been "victims of unlawful antitrust practices," Gregoire said she and the Attorneys General of California and Oregon have launched a multi-state investigation into "exorbitant prices."
"We are concerned that energy prices and supply in the past year do not appear to be the result of natural market forces," Gregoire told the committee. As a result, she said the investigation will look at whether "generators may have violated any of our laws, including Antitrust and Consumer Protection."
A number of factors have contributed to public suspicions, she said, including:
- Suspicious price activity, including sudden and dramatic spikes that raised energy costs more than ten times normal rates;
- Sudden, unplanned "maintenance outages" that took down 40 percent of generation capacity when the historical average was only 10 percent;
- Unusual restraints on transmission capacity;
- And suspicious activity in the California natural gas market.
Gregoire said that to date, power generators have been uncooperative with the investigation and that she may have to go to court to force the companies to open their records to investigators. "If they haven't done anything wrong, they should be eager to open their records and put to rest the public concerns," she said.
Gregoire vowed to pursue "every remedy available under state and federal law, " until "we are satisfied we know the truth."
Final Written testimony 6/20/01