The Senate Energy and Natural Resources Committee expects the financial failure of Enron Corp. to figure into the debate over energy legislation, which could get underway in the Senate next month, if Majority Leader Tom Daschle (D-SD) keeps his earlier promise to make energy a priority in the new congressional session (See Daily GPI, Dec. 6, 2001). As a result, it has scheduled an oversight hearing for next Tuesday to delve into the Enron affair.

But unlike other Senate and House panels, it’s not interested in the Houston energy trader’s improprieties, said committee spokesman Bill Wicker. “We’re more interested in what it [Enron’s bust] means to the energy markets in general.” The company’s implosion and bankruptcy “has spooked a lot of people from investing” in natural gas pipeline projects and new power generation facilities, he noted. “We want to know what [impact] Enron has had on the ability of electric and gas companies to raise money to complete projects.”

Moreover, Wicker indicated committee members may want to propose changes to the pending Democratic energy bill (S. 1766), as well as Republican energy proposals, based on what they learn at the Enron hearing. “I certainly think it [Enron’s breakdown] will be a consideration” in the Senate deliberations over energy legislation, but “I don’t know to what extent it will shape the debate.”

He doubts that Enron’s failure will signal the end to electricity deregulation, which is at the core of the Democratic energy bill sponsored by Daschle and Committee Chairman Jeff Bingaman (D-NM). “I think the people who never liked the idea of greater competition hope that that’s the case. But I’ve heard that it really isn’t going to have much effect at all” at the federal level, Wicker said. However, he conceded he was unsure of what’s in store at the state level.

Invited to testify at the committee hearing are FERC Chairman Patrick Wood, representatives from the Commodity Futures Trading Commission and New York Mercantile Exchange, as well as financial analysts who are familiar with energy trading practices.

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