November 17, 2005

Nine Attorneys General Call for Anti-Price Gouging Legislation

WASHINGTON, DC – U.S. Senator Maria Cantwell (D-WA) announced this morning that nine attorneys general have endorsed her bill, “The Energy Emergency Consumer Protection Act of 2005,” joining 29 U.S. senators, and eight governors in the fight to protect hard-working American families from skyrocketing fuel costs. Cantwell will head to the floor of the Senate later this morning to offer her legislation as an amendment to the Tax Reconciliation bill.

“I commend the attorneys general for their leadership on this critical issue,” said Cantwell, a member of both the Senate Commerce and Energy Committees. “As the chief law enforcement officers of their states, they are at the front lines of this battle to protect America’s consumers from price gouging. We need to provide them with the authority to go after price gougers and protect Americans from profiteering at the gas pump. Our attorneys general are a critical part of this fight and I’m delighted to have their support for my legislation.”

In a letter today, Attorneys General Eliot Spitzer (NY), Peggy Lautenschlager (WI), Lisa Madigan (IL), Patricia Madrid (NM), Bill Lockyer (CA), Mike Beebe (AR), J. Joseph Curran, Jr. (MD), Richard Blumenthal (CT), Tom Reilly (MA) urged Commerce Committee Co-Chairmen Ted Stevens and Daniel Inouye to pass federal legislation that imposes a ban on energy price gouging. They asked for provisions to provide new market transparency and market manipulation authorities for the president and the Federal Trade Commission to better protect consumers in the future.

“While 28 states already have price gouging laws on the books, the Energy Emergency Consumer Protection Act of 2005 in our opinion would provide law enforcement with vitally needed tools to prevent price gouging,” the attorneys general wrote in their letter. “S.1735 would also finally shine a bright light on the practices of oil companies and refiners—a sector of the economy that historically has not received close scrutiny from federal or state regulators.”

“With ninety-percent of Americans believing price gouging is occurring at the pumps, we have a responsibility to do everything we can to ensure it is not taking place. We believe the Energy Emergency Consumer Protection Act of 2005 can do that. Passage will help assure the public that government is providing the oversight they demand.”

Earlier this week, eight governors also endorsed Cantwell’s legislation and called for further action that would outlaw oil price-gouging during a national emergency and give the Federal Trade Commission and state attorneys general new powers to protect Americans from artificially inflated gas prices.

Based on Cantwell’s measures to ban Enron-style manipulation schemes in the electricity industry, which became law as part of the recent energy bill, S. 1375 empowers federal regulators to ensure greater market transparency and go after companies for manipulation of oil and gas price. It also gives the president the authority to declare national energy emergencies during which proven price gougers would be subject to new fines and criminal penalties.

Senator Maria Cantwell has been fighting to ensure fairness for consumers in the energy industry. Yesterday in a letter to Chairman Ted Stevens of the Commerce Committee and Chairman Pete Domenici of the Energy Committee, Cantwell and other Senators requested that hearings reconvene as soon as possible to take sworn testimony from oil CEOs about their roles in the Cheney energy task force and the recent run-up in American fuel prices. Cantwell also called on the Justice Department to investigate the alleged false statements.

Cantwell is the chair of the Senate Democrats’ Energy Independence 2020 national campaign, working to break America’s overdependence on foreign oil, to protect working families from skyrocketing energy costs, and to stop unfair market manipulation by energy companies. We must stop price gouging, provide relief from high home heating costs, and invest in reliable sources of affordable fuel. By working toward energy independence, we can protect our environment, jumpstart our economy, and provide for a better future. Together, America can do better.

[The text of the letter from the attorneys general follows below.]

November 17, 2005

The Honorable Ted Stevens
Chairman
Committee on Commerce, Science and Transportation
United States Senate
508 Dirksen Senate Office Building
Washington, DC 20510

The Honorable Daniel Inouye
Co-Chairman
Committee on Commerce, Science and Transportation
United States Senate
508 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Stevens and Co-Chairman Inouye:

Even before the devastation caused by Hurricanes Katrina and Rita, skyrocketing oil and gasoline prices were taxing American families and burdening our nation’s economy—with the notable exception of the oil industry which continued to rack up record profits. In fact, according to the Department of Energy, Americans will spend over $200 billion more on energy this year than they did last year, totaling over one trillion dollars. These expenses seem directly proportional to the extraordinary $33 billion in profits reported by the five major oil companies for the third quarter of 2005. Exxon/Mobil alone made an unconscionable $10 billion last quarter, a 75 percent increase over last year. Moreover, the profit that refiners are collecting from gasoline sales has reportedly more than tripled from $7 per barrel in September 2004 to over $22 per barrel on September 27, 2005.

Given the extraordinary impact these energy costs have on families, farmers, and businesses across America, we commend your joint efforts with the Senate Energy and Natural Resources Committee to hold a hearing last Wednesday to try, as Senator Majority Leader Frist put it, to “examine reasons for high energy prices.” Given our society’s absolute dependency on fossil fuels – whether to power our transportation system, keep our families warm this winter, or countless other uses – both American consumers and the economy are extremely vulnerable to the whims of those with sufficient market power to artificially constrain supply or influence prices.

As the chief law enforcement officers of our respective states, we are writing to urge you to pass federal legislation that imposes a ban on energy price gouging. Any bill must also provide new market transparency and market manipulation authorities for the President and the Federal Trade Commission to better protect consumers in the future.

To this end, we respectfully urge the Senate Commerce Committee to expeditiously consider and pass Senate Bill 1735. While 28 states already have price gouging laws on the books, the Energy Emergency Consumer Protection Act of 2005 introduced by Senator Maria Cantwell on September 20, 2005 and cosponsored by nearly a third of the U.S. Senate, in our opinion would provide law enforcement with vitally needed tools to prevent price gouging. S.1735 would also finally shine a bright light on the practices of oil companies and refiners—a sector of the economy that historically has not received close scrutiny from federal or state regulators. In addition, we strongly support section five which empowers States with the authority to pursue civil actions on behalf of their residents for violations of price gouging prohibitions.

We look forward to working with you on this critical issue to the American public and our nation’s economy. With ninety percent of Americans believing price gouging is occurring at the pumps, we have a responsibility to do everything we can to ensure it is not taking place. We believe the Energy Emergency Consumer Protection Act of 2005 can do that. Even if we determine that there is no market manipulation going on, then it would be a case of “no harm, no foul.” Passage will help assure the public that government is providing the oversight they demand.

Sincerely,

Eliot Spitzer - New York Attorney General
Peggy Lautenschlager - Wisconsin Attorney General
Lisa Madigan - Illinois Attorney General
Patricia Madrid - New Mexico Attorney General
Bill Lockyer - California Attorney General
Mike Beebe - Arkansas Attorney General
J. Joseph Curran, Jr. - Maryland Attorney General
Richard Blumenthal - Connecticut Attorney General
Tom Reilly - Massachusetts Attorney General

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