Senate Republicans on Wednesday blocked each and every turn by Democrats to make significant changes to a substitute electricity amendment offered by Sen. Pete Domenici (R-NM) as part of the omnibus energy bill (S. 14).

“It was not a good day for Democrats because a lot of amendments to improve the [substitute] electricity amendment were either defeated or tabled,” said a Capitol Hill committee aide.

The most significant action came early in the day when Republicans defeated by a vote of 50 to 48 a proposal sponsored by Sen. Maria Cantwell (D-WA), which sought to make it illegal for companies and traders to engage in “any [and all] manipulative or deceptive” behavior when purchasing or selling electricity, and to allow FERC to revoke the market-based rate authority of utilities who participate in fraudulent market activities.

Domenici’s substitute amendment makes it illegal for anyone to “knowingly and willfully” to carry out “round trip” trades, but Cantwell and other Democrats didn’t think the prohibition went far enough. They wanted to specifically make it illegal to engage in other Enron-type manipulation practices — Get Short, Load Shifting and Wheel Out, for example — in the electricity substitute amendment.

“People are going to look in their rear-view mirror and say Sen. Cantwell was right,” said Sen. Patrick J. Leahy (D-VT) late Wednesday.

With the Domenici proposal, Congress “barely slaps the hands” of Enron and other energy traders who manipulated power prices and supply, Cantwell said from the Senate floor. These practices “are not legal; they are examples of manipulation.”

Sen. Tom Harkin (D-IA) questioned why Domenici would ban only one trading practice and not others. FERC has found that manipulation of the energy markets was “epidemic,” he noted. “How many times do we have to get burned [by fraudulent schemes]” before lawmakers and policymakers do anything about it?

He said he doubted the Department of Justice would go after the likes of Kenneth Lay, former Enron chairman, because of his close ties to the Bush administration. Lay “may be on the French Riviera for all I know.”

But Sen. Larry Craig (R-ID) countered that the “politics of California” were to blame for many of the problems in the West Coast electricity markets. The “ratepayers of California [have] got it figured out” by demanding the recall of Gov. Gray Davis, he said.

In addition to blocking the Cantwell proposal, Senate Republicans voted to table two second-degree electricity amendments sponsored by Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the Senate Energy and Natural Resources Committee. One proposal sought to strengthen FERC’s authority to review the sale and purchase of generation assets to avoid too much consolidation in the industry, and prevent cross-subsidies between regulated and unregulated operations.

A second amendment addressed standard market design (SMD). Both Bingaman and Domenici agreed that FERC should delay finalization of SMD until July 2005, but Bingaman had proposed giving the Commission the flexibility to issue orders or rules on matters within the scope of SMD during this period.

The Senate was expected to return to consider other amendments to Domenici’s substitute electricity title Wednesday night, and possibly vote on the entire title, the Capitol Hill aide said. Once the Senate votes on the Domenici substitute proposal, he estimated that about 60% of the 11-title, nearly 500-page energy bill would be complete.

Asked if the Senate would vote out a an energy bill by Friday when the August recess is scheduled to begin, he said, “it’s looking a little dubious right now.” There’s “controlled chaos on the floor over how the bill is being managed,” with senators often interrupting the energy bill debate with discussions on judgeships and trade relations.

The Senate still must debate climate change, a renewable portfolio standard and energy tax incentives, including those for oil and natural gas producers and the Alaska natural gas pipelines.

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