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Inslee listens to a constituent.

Montage of Wing Point in Bainbridge Island and the Edmonds Ferry.

Jay Inslee: Washington's 1st Congressional District

Issues

National Energy Issues & Events

Frequently Asked Questions

Q: Why is the Inslee energy bill necessary, when FERC has already ordered price caps?

The FERC order was a move in the right direction, but it left three main economic and environmental loopholes:

  1. Windfall profits: The FERC order set up a system that encourages windfall profits by energy generators;
  2. Pollution: The FERC order encourages generators to turn on their most expensive, least efficient and dirtiest generation plants first;
  3. No refunds: The FERC order failed to order a refund to states that have paid unreasonable energy costs over the past year.

The experimental FERC order says that once supplies get low, the price cap mechanism will be triggered, and then generators may charge no more than the price of the most expensive unit of energy sold before the price cap was triggered. Generators now have an incentive to make sure that the last unit of energy sold was the most expensive unit of energy possible. This is a problem: everyone now has an incentive to turn on their dirtiest, most run-down and inefficient generating facilities first, since these facilities produce the most expensive energy. After the price cap kicks in at the most expensive rate, generators can turn on the clean, efficient plants, and sell their cheap energy at the high price ordered by the price cap.

In addition, when there is not an immediate supply problem, generators are still allowed to charge up to 85% of the reserve deficiency rate. This rate may still be three times higher than normal prices.

Q: What does the Inslee Energy bill do?

Inslee's tried and true approach would end exploitative profiteering and unnecessary environmental damage, while encouraging a fair profit for generators. The amendment would order FERC to set cost-based rates of return for each generator, just as it has done for 75 years. Rates would be based on how much it cost each generator to produce the energy, plus other reasonable costs associated with the acquisition, conservation, and transmission of the energy, plus a reasonable rate of return determined by each generator's price history. The bill also includes a refund provision, ordering the refund for Western States that were charged unreasonable rates (dating back to June 1, 2000.)

Q: How does the Inslee bill address FERC order loopholes?
  1. Windfall profits: Setting cost-based rates would address the windfall profit problem caused by the FERC order, because there would be no incentive for generators to fire up the most expensive generating plants first.
  2. Pollution: Cost-based rates would also address the environmental problem caused by the FERC order, because there would be no incentive to fire up the dirtiest, most polluting plants first.
  3. Refund: Inslee's refund provision would help local utilities and consumers limit additional energy price increases this year. For example, Seattle City Light has borrowed $750 million to pay for power this year, and must raise energy prices again this year in order to pay that bill, regardless of the FERC order limiting future prices. Said Inslee, "FERC has not taken real action requiring refunds, they've simply thrown a tea party to discuss the issue. Ordering refunds for all the Western States, not just California, is not a charitable action-- it is the legally responsible thing to do. Anyone who expects the industry to voluntarily disgorge profits must also believe in the tooth fairy."
Q: Why are you pushing for the Inslee bill in the House, when Senator Feinstein has pulled similar legislation from the Senate?

Senate procedural rules are different than House rules; House Members must take every opportunity to try to get a floor debate and vote on this issue, since the Energy and Commerce Committee refuses to release the bill.

Said Inslee, "There is no question that FERC acted last week in response to pressure from Congress, and we must keep building the heat and momentum for reasonable energy rates in the House. If we do not push for the right to debate and vote on this issue in the House, we will not obtain meaningful action."

Q: Why are you initiating a discharge petition on the Inslee bill?

The House Energy and Commerce Committee refuses to allow the Inslee bill to come up for a vote. A discharge petition would allow the bill to come to the floor for consideration, even if the Committee does not refer the bill, and even if House leadership does not schedule it.

Q: If the discharge petition succeeds, can anyone offer an amendment to the Inslee bill?

Yes, there is an "open rule" on the discharge petition, so anyone may offer an amendment to the Inslee bill on the floor of the House. Inslee's goal is to encourage debate about the best solution to the energy crisis, and then allow Members to vote on the bill.

Q: How does the discharge petition work?

On Wednesday, June 27th, the petition was placed in the well of the House. Members may sign the petition while they are on the floor to vote, or for other reasons. A total of 218 signatures (a majority of the House) is needed for a successful discharge petition. There is no time limit on how long the petition may remain available for signatures.

Q: Do you expect to get enough signatures on the petition?

Since constituents will bear the brunt of further price increases this year, despite the FERC order, more heat and momentum will continue to build around this issue every day. We are hopeful that enough Members will see the need for a debate about the bill. Signing the petition is not a statement of support for the bill, but it is a statement of support for having a debate about the bill, and any amendments to the bill that may be brought up.

Q: Has Inslee addressed the House of Representatives on this issue?

Yes, here is an excerpt from a floor speech by Inslee on June 27, 2001, the day the petition was placed in the well of the House:

"Last week in California, three former employees of generators of electricity testified that they turned off their equipment at the demands of their bosses, which resulted in increasing electrical prices on the West Coast. This House should do something about that.

I urge my colleagues to come to the well of the House, and sign a discharge petition for a bill that will create cost-based pricing for two years as a short-circuit to stop the meltdown of the energy market on the West Coast. I do that on behalf of the small business people who are losing their businesses today because of the thousand percent increases in wholesale electrical rates on the West Coast. These energy prices are unprecedented, wrong, unconscionable, and should be illegal.

The Federal Energy Regulatory Commission finally did something a few days ago, because over the last four months we have dragged them kicking and screaming to this point, but it is clear that the FERC action is not enough. We need to keep FERC's feet to the fire. I urge my colleagues to sign the discharge petition in the well of the House today."