Washington – U.S. Senator Ron Wyden (D-Ore.) today announced his intention to place a “hold” on the nomination of Joe Kelliher to become a commissioner with the Federal Energy Regulatory Commission (FERC). In a statement being submitted to the Senate, the Senator explained the rationale for his decision and informs the Senate of his objection to a unanimous consent request that would allow the Senate to vote on Kelliher’s confirmation. Wyden, who sits on the Senate Energy and Natural Resources Committee, said in reference to Kelliher’s confirmation hearing testimony that “Mr. Kelliher has not convinced me he fully understands the impact of manipulation of West Coast energy markets on Northwest ratepayers or the problems the Commission's standard market design proposal could create for the Northwest electric power grid.”

As a matter of policy, Wyden publicly announces any “hold” he places on nominees or legislation. Wyden has led efforts to end the practice of “secret holds” in the U.S. Senate. Following is the text of Wyden’s statement for the Congressional Record explaining his hold on the Kelliher nomination.

Statement by Senator Ron Wyden for the Congressional Record
Monday, March 17, 2003

I cannot allow the Senate to proceed with Mr. Kelliher’s nomination to the Federal Energy Regulatory Commission today or anytime soon.

This is a position of enormous importance to my constituents in Oregon who have had their energy prices soar through the roof during the past few years while the Commission has failed to serve as an effective watchdog over energy markets.

In the limited time I was able to question Mr. Kelliher at his confirmation hearing, he demonstrated little understanding of the impact on the Northwest of the manipulation of West Coast spot markets by Enron using the various strategies described in the Enron memos. These strategies have had a devastating impact on Northwest energy consumers and on long-term contracts that the Bonneville Power Administration (BPA) and many other Northwest utilities subsequently were induced to sign in order to protect themselves from the volatility of the manipulated spot markets. In response to my question about whether the Enron memos provided grounds to get out from overpriced contracts, Mr. Kelliher stated: “As a legal matter, I do not know sir. I thought those memos were designed to manipulate spot markets."

To date, there has been a total failure on the part of the Commission to make any kind of connection between the manipulation of spot markets and the impact on long-term contracts that have raised rates for Northwest ratepayers. In fact, the Commission currently appears to be
pursuing two completely different standards for when ratepayers may be entitled to refunds for manipulation of spot markets as compared to when over-priced, long-term contracts that were a direct result of that manipulation can be voided or reformed. The net effect could be that Northwest ratepayers could be stuck in long-term, over-priced contracts even if the rates in those contracts are not considered just and reasonable according to FERC’s own standards.

What is also of concern to me is that there are a number of critical issues to Northwest energy consumers that will be coming before the Commission in the next several weeks. These include Commission decisions on filings by the Bonneville Power Administration and other Northwest utilities for relief from contracts with Enron and other energy traders, enforcement cases against the marketers accused of manipulating West Coast energy markets and the Commission’s proposal to create a one-size-fits-all standard market design for transmission systems that would be ill-suited to our region’s transmission system and could create new opportunities for manipulation of Northwest energy markets With these critical issues coming before the Commission, the Northwest needs to be assured our region's interests will be fully and carefully considered.

Mr. Kelliher has not convinced me he fully understands the impact of manipulation of West Coast energy markets on Northwest ratepayers or the problems the Commission's standard market design proposal could create for the Northwest electric power grid. For these reason, I would object to a unanimous consent request for the Senate to take up Mr. Kelliher's nomination until my concerns can be addressed.

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