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Page   1 - Duke Energy Employee Advocate

Washington - Page 2

"When I was a boy I was told that anybody could become President; I'm beginning to believe it."
- Clarence Darrow

Power Trader Finds Washington All Ears

New York Times - By L. BERGMAN and J. GERTH - May 25, 2001

Curtis Hébert Jr., Washington's top electricity regulator, said he had barely settled into his new job this year when he had an unsettling telephone conversation with Kenneth L. Lay, the head of the nation's largest electricity trader, the Enron Corporation.

Mr. Hébert, chairman of the Federal Energy Regulatory Commission, said that Mr. Lay, a close friend of President Bush's, offered him a deal: If he changed his views on electricity deregulation, Enron would continue to support him in his new job.

Mr. Hébert (pronounced A- bear) recalled that Mr. Lay prodded him to back a national push for retail competition in the energy business and a faster pace in opening up access to the electricity transmission grid to companies like Enron.

Mr. Hébert said he refused the offer. "I was offended," he recalled, though he said he knew of Mr. Lay's influence in Washington and thought the refusal could put his job in jeopardy.

Asked about the conversation, Mr. Lay praised Mr. Hébert, but recalled it differently. "I remember him requesting" Enron's support at the White House, he said of Mr. Hébert. Mr. Lay said he had "very possibly" discussed issues relating to the commission's authority over access to the grid.

As to Mr. Hébert's job, Mr. Lay said he told the chairman that "the final decision on this was going to be the president's, certainly not ours."

Though the accounts of the discussion differ, that it took place at all illustrates Enron's considerable influence in Washington, especially at the commission, the agency authorized to ensure fair prices in the nation's wholesale electricity and natural gas markets, Enron's main business.

Mr. Lay has been one of Mr. Bush's largest campaign contributors, and no other energy company gave more money to Republican causes last year than Enron.

And it appears that Mr. Hébert may soon be replaced as the commission's chairman, according to Vice President Dick Cheney, the Bush administration's point man on energy policy.

Mr. Lay has weighed in on candidates for other commission posts, supplying President Bush's chief personnel adviser with a list of preferred candidates. One Florida utility regulator who hoped for but did not receive an appointment as a commissioner said he had been "interviewed" by Mr. Lay.

Mr. Lay also had access to the team writing the White House's energy report, which embraces several initiatives and issues dear to Enron.

The report's recommendations include finding ways to give the federal government more power over electricity transmission networks, a longtime goal of the company that was spelled out in a memorandum Mr. Lay discussed during a 30-minute meeting earlier this spring with Mr. Cheney.

Mr. Cheney's report includes much of what Mr. Lay advocated during their meeting, documents show. Both men deny discussing commission personnel issues during their talk. But Mr. Lay had an unusual opportunity to make his case about candidates in writing and in person to Mr. Bush's personnel adviser, Clay Johnson. And when Mr. Bush picked nominees to fill two vacant Republican slots on the five- member commission, they both had the backing of Enron, as well as other companies.

Mr. Lay is not shy about voicing his opinion or flexing his political muscle. He has transformed the Houston-based Enron from a sleepy natural-gas company into a $100 billion energy giant with global reach, trading electricity in all corners of the world and owning a multibillion- dollar power project in India. He has also led the push to deregulate the nation's electricity markets.

Senior Bush administration officials said they welcomed Mr. Lay's input but did not always embrace it: President Bush backed away from curbing carbon-dioxide emissions, an effort supported by Enron, which had looked to trade emission rights as part of its energy business.

"We'll make decisions based on what we think makes sound public policy," Mr. Cheney said in an interview, not what "Enron thinks."

The Bush-Lay bond traces back to Mr. Bush's father and involves a personal and philosophical affinity. Moreover, Enron and its executives gave $2.4 million to federal candidates in the last election, more than any other energy company. While some of that went to Democrats, 72 percent went to Republicans, according to an analysis of election records by the Center for Responsive Politics, a nonprofit group.

"He's for a lot of things we're for," said Mr. Johnson.

But when it came to deciding on nominees for the commission, Mr. Johnson said that Mr. Lay's views were not that crucial. The two most important advisers, he said, were Andrew Lundquist, the director of Mr. Cheney's energy task force, and Pat Wood 3rd, the head of the Texas public utility commission.

As governor, Mr. Bush named Mr. Wood to the utility commission. This year, when the White House filled the two Republican slots on the federal agency, Mr. Wood was the first choice, Mr. Johnson said.

Consumer advocates and business executives praise Mr. Wood. But Mr. Lay also had a role in promoting him. Shortly after Mr. Bush was elected governor in 1994, Mr. Lay sent him a letter endorsing Mr. Wood as the "best qualified" person for the Texas commission.

In all, there are five seats on the commission, two held by Republicans, two by Democrats and one held by a chairman who serves at the pleasure of the president. Mr. Hébert, who became a commissioner in 1997, was named chairman by Mr. Bush in January.

The Federal Energy Regulatory Commission's mandate to ensure fair prices in wholesale electricity and natural gas markets makes it crucial to sellers like Enron as well as consumers.

The movement toward deregulation sometimes leaves the commission caught in a tug of war: power marketers like Enron are trying to break into markets and grids controlled by old-line utilities, which operate under state regulation. The commission's chairman has considerable latitude in setting its agenda.

As part of its oversight of the wholesale electricity markets, the commission ordered several companies to refund what it considered excessively high prices this year in California. One lesser offender named in the commission's public filings - $3.2 million, of a total of $125 million - was an Enron subsidiary in Oregon.

Enron owns few generating assets, but buys and sells electricity in the market. Many of those transactions resemble the complicated risk-shifting techniques used by Wall Street for financial instruments.

Mr. Hébert, after he became chairman, initiated an examination into the effects those techniques have on the electricity markets. "One of our problems is that we do not have the expertise to truly unravel the complex arbitrage activities of a company like Enron," he said, adding, "we're trying to do it now, and we may have some results soon."

William L. Massey, one of the agency's two Democratic commissioners, said he supported the inquiry but had not been aware of it - an indication of the chairman's ability to set the commission's agenda.

Finally, the commission is trying to speed the pace of electricity deregulation by opening up the nation's transmission grid, much of which is owned by privately owned utilities that enjoy retail monopolies. Some Enron officials say the commission has been moving too slowly to open the grid. They attribute some of the problem to utilities. But they also fault Mr. Hébert.

"Hébert still has undeserved confidence in some of the vertically integrated companies coming to the table and dealing openly" with transmission access issues, said Richard S. Shapiro, an Enron senior vice president.

The utilities, however, maintain that they provide cheap and reliable service for their customers. Washington lobbyists for one Southern utility said that Enron was really interested in focusing on the utility's big-business clients, which under state regulation pay higher rates than residential customers.

Since 1996, about half the states have moved to open their retail markets to competition, and the commission has begun to make it easier for outsiders to use the nation's transmission grid. But the promise of cheaper rates has been largely unfulfilled. So the push for more deregulation, in which Enron has been a leader, has slowed, especially when California's flawed program led to skyrocketing rates and chaotic markets.

Mr. Hébert is a free-market conservative who favors deregulation but also recognizes the importance of state's rights. A former Mississippi regulator, he is a protégé of Trent Lott, the Senate Republican leader from Mississippi. Mr. Hébert said Mr. Lott was instrumental in his nomination to the commission in 1997 by President Clinton.

President Bush elevated Mr. Hébert to chairman on Inauguration Day, a move Mr. Lay said he told the White House he supported.

Mr. Johnson, the White House personnel chief, said that Mr. Lott and Mr. Hébert had both been told that Mr. Hébert could remain chairman at least until the administration's nominees - Mr. Wood and Nora Brownell, a Pennsylvania utility regulator - are confirmed by the full Senate. The Senate energy committee voted earlier this week to approve the two nominees, after a hearing last week indicated strong support.

It is widely expected that President Bush will name Mr. Wood to replace Mr. Hébert as chairman after the Senate acts.

In an interview for a forthcoming episode of "Frontline," the PBS series, Mr. Cheney suggested as much. "Pat Wood's got to be the new chairman of the F.E.R.C., and he'll have to address" various problems in the electricity markets, he said.

Mr. Hébert said that no one had told him he was being replaced. If someone else is named chairman, Mr. Hébert can remain a commissioner until the end of his term, which expires in 2004.

It was a few weeks after President Bush made him chairman that Mr. Hébert said he spoke by telephone with Mr. Lay.

Mr. Lay told him that "he and Enron would like to support me as chairman, but we would have to agree on principles" involving the commission's role in expanding electricity competition, Mr. Hébert said of the conversation.

A senior commission official who was in Mr. Hébert's office during the conversation said Mr. Hébert rebuffed Mr. Lay's offer of a quid pro quo. The official said that he heard Mr. Hébert's side of the conversation and then, after the call ended, learned the rest from him.

Mr. Hébert said that he, too, backed competition but did not think the commission had the legal authority to tell states what to do in this area. Concerning the issue of opening transmission access through the creation of regional networks, Mr. Hebert supports a voluntary process while Enron seeks a faster and more compulsory system.

Mr. Lay said that while he might have discussed issues relating to the commission's authority concerning access to the grid, "there was never any intent" to link that or any other issue to Mr. Hébert's job status.

The commission is a quasijudicial agency, so decision-makers like Mr. Hébert must avoid private discussions about specific matters pending before the commission. Mr. Hébert and Mr. Lay both said that line was not crossed, but Mr. Hébert said he had never had such a blunt talk with an energy-industry executive.

Mr. Lay added that his few recent conversations with Mr. Hébert were nothing special. "We had a lot of access during the Clinton administration," he said.

And he said that while making political contributions "probably helps" to gain access to an official, he made them "because I'm supporting candidates I strongly believe in."

Last June, Enron executives were asked to make voluntary donations to the company's political action committee. The solicitation letter noted that the company faced a range of governmental issues, including electricity deregulation.

This year, some people who sought but did not get nominations to the commission said that Mr. Lay and Enron had had a role in the process.

One was Joe Garcia, a former Florida utilities regulator and prominent Cuban-American activist. He said he had been "interviewed" by a few Enron officials, including Mr. Lay, who he said had not been as "forceful or insistent" as the other Enron officials.

But in their conversation, Mr. Garcia said, Mr. Lay made clear that he would be visiting the White House, adding that "everyone knew of his relationship and his importance."

Mr. Johnson, the White House personnel chief, could not cite another company besides Enron that sent him a list of preferred candidates for the commission, but he remembered hearing the views of Tom Kuhn, who heads the utility industry trade group, the Edison Electric Institute. Mr. Kuhn was a classmate of Mr. Johnson and Mr. Bush at Yale.

As for his conversation with Mr. Garcia, Mr. Lay said he was comfortable with his candidacy but "I'm not sure what I told him about my friends at the White House."

Burn, Baby, Burn

New York Times - By PAUL KRUGMAN - May 20, 2001

Who knew that Dick Cheney had such a sense of humor?

He had us rolling in the aisles after the famous put-down in which he dismissed energy conservation as nothing more than a "sign of personal virtue." But the joke got much better Thursday, with the release of the administration's energy plan. Just for laughs, Mr. Cheney threw in a few mock conservation measures. Topping the list was a tax credit for - get this - people who purchase hybrid gas-electric cars.

In case you don't quite get the joke: during the campaign one of George W. Bush's favorite gag lines involved making fun of Al Gore's proposal for - you guessed it - a tax credit for purchase of hybrid cars. It got big laughs because it symbolized his opponent's supposed preoccupation with trivialities. Now, in a fine satirical gesture, Mr. Cheney has made the very same proposal his lead conservation measure. Take that, you wimps!

It seems that the pundits, having misjudged Mr. Bush and Mr. Cheney during the campaign, have done it again. We now know that the moderate rhetoric Mr. Bush used during the campaign was insincere; but it turns out that the administration's libertarian rhetoric during the selling of the tax cut was equally insincere. These guys don't believe in free markets: what they're really into is heavy metal. Refineries! Pipelines! Nuclear power plants! That's the stuff!

To justify their lust for tubular steel, Mr. Cheney and his collaborators have gone to great lengths to fabricate an energy crisis - and they have also suddenly decided that free markets don't work after all. "Estimates," says the report, "indicate that over the next 20 years U.S. oil consumption will increase by 33 percent." Whose estimates? We are never told. But that's an awfully high number. In the 20 years ending in 1999, the last year for which official data are available, oil consumption rose less than 5 percent. All I can figure is that Mr. Cheney's people are extrapolating from the abrupt decline in automobile fuel efficiency over the last few years, as people have switched from ordinary cars to S.U.V.'s. And what they are saying is that we should base our energy policy on the assumption that this quite recent trend will continue unabated for decades.

This doesn't have to happen. In fact, it isn't going to happen, even in the absence of any serious conservation measures. To burn as much oil as the Cheney report says we need, everyone who still drives a mere car would have to acquire an S.U.V., and everyone who now drives an S.U.V. would have to start driving something the size of a Sherman tank.

What's behind Mr. Cheney's greasy math? It goes without saying that he wants to scare us into relaxing environmental regulation. But there's more: the Cheney plan provides an array of subsidies, explicit and implicit, for energy producers. Indeed, the libertarian Cato Institute calls the plan a "smorgasbord of handouts and subsidies for virtually every energy lobby in Washington."

Strange, isn't it? If you're a low-paid worker, or an energy consumer, the free market is sacrosanct - it would be a terrible thing if government provided you with any assistance. But energy producers apparently need special encouragement to do their regular job.

In fact, of course, they don't. Mr. Cheney loves to talk about our alleged need to build a new power plant every week for the next 20 years, implying that this is a herculean task that can only be accomplished with a lot of help from Washington. But high prices have already sparked a huge construction boom in the power industry, which will add three or four plants per week for the next few years. As some wags have put it, if the power industry wants to meet Mr. Cheney's target it will have to slow down its building program.

The truth is that the administration has things exactly the wrong way around. It claims that we face a long-run energy crisis, and that there are no short-term answers. The reality is that in the long run the forces of supply and demand will take care of our energy needs, with or without Mr. Cheney's expensive new program of corporate welfare. What we need is a strategy to deal with the temporary problem of sky-high prices and huge windfall profits. But we're not going to get it, at least not from Washington.

Bush Gala Expected to Net $15 Million

New York Times - By PHILIP SHENON - May 20, 2001

Organizers of a multimillion-dollar Republican dinner that will be President Bush's debut as fund-raiser in chief include dozens of corporate lobbyists and executives who helped engineer his election and whose industries stand to benefit from his energy plan, his tax cuts and his other early moves in the White House.

The black-tie dinner on Tuesday, the Republican National Committee's Presidential Gala, is expected to raise more than $15 million for the party and attract at least 2,000 people, including several cabinet members and virtually all of the Republican leaders of Congress. Ticket prices begin at $1,500 a seat, $15,000 a table.

Because the dinner is the first major Washington fund-raising event that Mr. Bush will preside over since his inauguration, it is being described as an early test of his ability and willingness to use the presidency to help raise money for the Republican Party.

President Bill Clinton, who was harshly criticized by Republicans for his aggressive fund-raising, used similar Washington dinners to raise tens of millions of dollars for the Democratic Party. For groups seeking changes in campaign law, the huge Democratic galas came to symbolize the excesses of so-called soft money donations, the unlimited contributions to political parties that would be outlawed under legislation now in Congress.

Among the 121 names on the organizing-committee list for Mr. Bush's dinner next week are lobbyists and executives from oil, gas and nuclear-energy companies that helped shape the White House energy plan, from manufacturing concerns delighted by Mr. Bush's early decision to overturn workplace ergonomic rules, from credit card companies grateful for Mr. Bush's support for a bill to make it harder for people to escape their debts in bankruptcy and from cigarette makers encouraged by reports that the government may drop a $100 billion racketeering lawsuit against the industry.

Many of the corporate executives on the list have been enthusiastic supporters of the president's plans for tax cuts of more than $1 trillion over the next decade. The Senate is expected to approve the tax-cut package next week. The House has already approved its version of the bill.

The dinner's sponsors include Red Cavaney, president of the American Petroleum Institute; Richard Shelby, executive vice president of the American Gas Association; Bud Albright, Washington lobbyist for Reliant Energy, and Robert S. Aiken, vice president for federal affairs at Pinnacle West, the parent company of a major electrical utility in Arizona.

Mr. Shelby pledged to raise $250,000 for the dinner; the others pledged $50,000. Also pledging $250,000 was Haley Barbour, a former chairman of the Republican National Committee whose lobbying concern now represents Southern Energy, as well as Microsoft, Lockheed Martin and Lorillard Tobacco.

The leading nonenergy corporate donors on the list are Philip Morris, the tobacco giant, which pledged $250,000, and AT&T and Bristol-Myers Squibb, which each promised $100,000 to the Republicans. Other organizers include the chairman of UST Inc., which is the parent company of United States Smokeless Tobacco, and the chairman of Northwest Airlines.

Republican officials say that business leaders and corporate lobbyists have long supported the party's agenda and that it is no surprise that so many of them want to help to organize the president's first big fund-raising dinner, much as labor unions historically underwrite Democratic fund-raising events.

They said President Bush had insisted that no action create even the appearance of special favors for Republican donors. This week, the White House released a list of 152 people who had spent the night at the White House or Camp David since Mr. Bush took office, and few were contributors who had not been longtime family friends.

Trent Duffy, a spokesman for the Republican National Committee, said of the sponsors of the gala, "I don't question their motives."

Many of the donors insisted in interviews that they had no desire for special favors from the administration.

"These are people who believe in what the Republican Party stands for," said Richard F. Hohlt, a Republican lobbyist whose clients include the Nuclear Energy Institute, Philip Morris and Chase Manhattan bank. "Nobody is doing anybody any favors - I've never seen that."

Although Mr. Hohlt said he had asked for his name to be removed from the organizing list because of pressing business commitments, he said he planned to go to the dinner "because it's where you see friends."

Democrats and groups seeking to change campaign laws have contended that the list proves that many of Mr. Bush's most enthusiastic supporters are lobbyists and corporate executives whose efforts to help put Mr. Bush in the White House are now paying dividends for their industries.

Democrats say they also see a double standard, since President Clinton came under attack from Republicans who said the Clinton White House offered official favors in exchange for campaign donations, ranging from rewriting trade policy toward China to sleepovers in the Lincoln Bedroom.

"The Democratic Party did have to answer a lot of questions about fund-raising and we did address them and we did change policy," said Jenny Backus, a spokeswoman for the Democratic National Committee.

Ms. Backus said the list of the organizers for Mr. Bush's dinner was a demonstration of the hypocrisy of Mr. Clinton's Republican critics because "it's obvious that all these Republican contributors are getting what they paid for."

Lobbyists acknowledge that dinners like the Tuesday gala offer an opportunity for face-to-face contact with cabinet members and other officials. The Republican National Committee would not release a seating plans for the dinner, or say how it had been devised.

Two members of the organizing committee for the dinner, speaking on condition of anonymity, said that donors who wanted to be seated next to a particular cabinet member or other Republican official were directed to make the request to the committee and that the decision would be made partly on the basis of how much they had contributed to the party.

Originally, the National Republican Senatorial Committee had planned to invite donors who were coming to Washington for the dinner to special briefings with cabinet members.

But at least two of them, Education Secretary Rod Paige and Energy Secretary and Energy Secretary Spencer Abraham, said through spokesmen today they had declined the invitations because of schedule conflicts. Tommy G. Thompson, the secretary of health and human services, was criticized for meeting with Republican donors in his office after the meeting was disclosed last month in The New York Times.

The dinner could be among the last of its kind. Congress is debating a campaign-finance overhaul that would put an end to the unrestricted soft money campaign contributions that will make up the bulk of the donations at the gala. The McCain- Feingold campaign bill was approved by the Senate last month and is now awaiting action in the House.

A preliminary list of the gala's organizers was mailed to other Republican Party members last month in hopes of attracting more large donors. Individuals on the list were not identified by the companies they work for, and spokesmen for the Republican National Committee declined to identify the donors further.

But a comparison of the list with records of the Federal Election Commission shows that many are corporate lobbyists and executives with a long history of generous contributions to the Republican Party and to Mr. Bush.

Some are close friends from Mr. Bush's early years in Texas, including Joe and Jan O'Neill of Midland, Tex., who introduced Mr. Bush to his wife, Laura, in 1977. The O'Neills are identified on the list as deputy chairmen of the gala, which means they have committed to raising $100,000 for the dinner.

Another of Mr. Bush's closest friends, Bradford M. Freeman, a Los Angeles investment banker who recently adopted Mr. Bush's six-toed cat, Ernie, is listed as one of the 10 co-chairman of the dinner, which means he is committed to raising $500,000.

Among those listed as vice chairmen, requiring a fund-raising commitment of $250,000, is Charles Wyly Jr., a Dallas billionaire who gained attention last year when his family underwrote a $2.5 million advertising campaign attacking the environmental record of Senator John McCain, Mr. Bush's rival for the Republican presidential nomination.

Among members of the dining committee, who have each pledged $50,000, are Vincent A. Gierer Jr., chairman of the tobacco company UST; Ed Gillespie, a former Republican Congressional staff member who has lobbied in recent years for Cisco Systems, Viacom and DaimlerChrysler; and Timothy Haake, a lobbyist. Mr. Haake has been linked to lobbying efforts by the jewelry industry to block legislation that would ban diamond imports from nations or rebel groups with a record of human rights abuses. He did not return telephone calls.

Bush Off by a Few Decades, Experts Say

L. A. Times - By PETER G. GOSSELIN - May 18, 2001

WASHINGTON--These are not the 1970s. Try as President Bush might Thursday to portray America's energy troubles as a reprise of that decade's problems, there are striking differences.

Where once the country suffered a sudden cutoff of oil--the result of the Arab oil embargo and the Iranian revolution--now it has plenty. Where once it was a sloppy hog for power, now it's a comparatively trim consumer. And where once it seemed utterly helpless to end its troubles, now it has a relatively simple, if painful, solution to most problems: higher prices.

"What we're experiencing is a series of shocks that may be warnings of things to come," said Joseph A. Stanislaw, president of Cambridge Energy Research Associates, a widely respected consulting firm. "But we're not being embargoed. We have all the oil we want--for $25 or so a barrel."

In essence, independent analysts said, the administration lashed together two disparate problems--California's electrical crisis and a jump in gasoline prices--to make the case for doing something about a largely unrelated set of issues, such as boosting domestic oil production, reviving nuclear power and encouraging more use of coal. In doing so, these analysts said, administration officials relied heavily on a faulty comparison with the 1970s. "America in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970s," the administration warned in a 163-page report issued Thursday. "A fundamental imbalance between supply and demand defines our nation's energy crisis."

In fact, said analysts, with the exception of California's electrical crisis, there is no generalized mismatch of supply and demand. And even the California crisis is largely the product of regulatory foul-ups, not a fundamental shortage. "California is a horrible situation, but it's not going to get solved by anything in this report," said Harvard energy economist William W. Hogan, who as a Nixon administration official helped design Project Independence, one of Washington's early responses to the 1970s crisis.

Although environmentalists disagree, analysts said that where Bush appears to be at his strongest is in claiming that new technology makes it dramatically safer to extract oil and gas even in such sensitive areas as Alaska's Arctic National Wildlife Refuge.

"Did you ever see the James Bond movie about Caspian Sea oil with all the high-tech computer screens? Well, it's really like that," said Stanislaw. "The chip has made a big difference to everything, including drilling and pipelines." But if Bush, a former oil executive, is on strong ground when it comes to drilling technology, his case for sweeping federal action rests at least in part on antiquated arguments last heard in the 1970s.

For example, the administration argued in its report that if U.S. oil production is allowed to continue rising at the same slow rate it did during the last decade, "our projected energy needs will far outstrip expected levels of production."

But, analysts said, America's appetite for energy has outstripped its ability to produce fuel for most of the last century. And although the fraction of its needs that are met by imports has risen from 35% to 52% over the last three decades, the increase appears to have caused the country little economic or political trouble.

"It's surprising how the administration goes back to the 'gap-ology' of the '70s: that if we don't immediately do x, y, and z, there's going to be a gigantic shortage," said MIT energy economist Paul Joskow. "Its own report shows the economy has responded pretty well to the ups and downs of supply and demand."

"It's internally inconsistent," Joskow said of the report. And that is not the only inconsistency that analysts spotted.

For example, on an issue closely related to the California crisis--speeding the implementation of new transmission lines and development of a national power grid to ensure electricity can get where it's most needed--the administration appeared to be of two minds.

In one section, after criticizing California for bungling electrical deregulation, it praises two other states--Pennsylvania and Bush's own Texas--for providing enough home-grown power to meet their own needs. "Pennsylvania and Texas took steps to ensure that procedures for adding new power plants were efficient. . . . For these reasons, Pennsylvania and Texas have ample electricity supply to meet demand, while California is confronting a serious supply shortage," the report said.

But a few pages later, the report calls on the Energy secretary to examine establishing a national power grid, a move that analysts said makes sense only if states buy and sell power across their borders rather than rely solely on home-grown supplies.

"It's not clear which way they want to go," Joskow said. "Do they want states to be self-sufficient or be parts of regional markets that trade in power?"

The report seems equally inconsistent on the issue of generating more electricity. At one point, it argues that government action is needed to ensure the nation gets the 400,000 megawatts of extra generating capacity, or up to 1,900 power plants, that will be needed in 2020. But at others, it acknowledges the private sector is already churning out plants without any new steps by government.

One respected consultant, Energy Ventures Analysis of Arlington, Va., said recently that more than half that extra capacity could be up and running in the next four years alone. "The main course is being served--and we may be headed for a glut," said EVA analyst A. Michael Schaal.

In a speech Thursday in St. Paul, Minn., Bush said the nation needed to move swiftly. "If we fail to act," he warned, "our country will become more reliant on foreign crude oil, putting our national energy security into the hands of foreign nations."

But energy veterans cautioned that Bush should be careful with the security argument. Hogan recalled that after the 1973 OPEC oil embargo, President Nixon declared the nation's goal was "energy independence" by 1980.

A year later, an administration task force concluded there was essentially no way to make good on the goal. In its place, Hogan said, task force members set themselves a new goal. "We decided our task was to redefine two words," he said. "One was 'independence.' The other was '1980.' "

Stop Conference Roulette

New York Times - By WILLIAM SAFIRE - March 12, 2001

A generation ago, at 5 in the morning in a basement room of the Cannon House Office Building, bleary- eyed members of the House Ways and Means and Senate Finance Committees met in secret conference to hammer out compromises in both houses' versions of the 1982 tax bill.

When the House delegation to the conference committee offered the stunning, retroactive tax cut passed in the House, the Senate's Russell Long told one of his Louisiana "Uncle Earl" stories.

"Seems Uncle Earl went into a Ford dealer in the Bayou country to get a deal on a car. Got such a good deal he told the dealer he'd buy two. Dealer gave a deep sigh and said: `That's too big a deal for me. Go on home.' Now that's how I feel," said the Senate conferees' leader, "about your big tax cut." And so, despite the urgent need to combat stagflation, the tax-cut plan called Kemp-Roth was stretched out over three years.

But nobody knew what deals were being made in that basement. That's because Congress's "conference system" is the last bastion of secrecy in a lawmaking process that is supposed to operate in the sunshine.

In 1995 the dealing in the dark got even worse. "Clinton decided to deal directly with Speaker Gingrich and the Senate Republicans," recalls Pat Moynihan, now a star of Syracuse University's Maxwell School, "cutting out Senate Democrats. Decisions about laws were made by four or five people in the most serious offense against the spirit of the Constitution I have ever seen."

Now this comedy of comity has drooped to its nadir. House and Senate tax bills differing by nearly a half-trillion dollars will be compromised in a conference to which the public is not invited. And when the House passes its version of the Senate's McCain-Feingold, campaign finance reform may be eviscerated by a delegation of senators appointed by a leadership that never wanted it passed at all. Or a House speaker could stack that body's delegation with centrist representatives who oppose the House bill they are supposed to be defending.

We cannot open up this lawmaking by putting cameras into the conference room, because the pre-conference meetings in hallways are where arrangements are made. A senator publicly "speaking for Buncombe County" may have had his amendment passed to please voters back home on the clear understanding it would be killed in conference.

Defenders of closed covenants point to the Constitutional Convention itself, held in secret: had that Philadelphia conclave been open, no unpopular compromises would have been possible to form the nation. They argue that if a camera caught someone today saying "the House yields" in some trade with the Senate, the deal maker would be embarrassed irreparably.

Baloney. Just as James Madison was wrong to conceal for over 20 years his minutes of the framers' convention, today's deal makers are wrong to legislate behind their hands. "Sometimes you have to cast a tough vote," says Senator Ron Wyden, Democrat of Oregon, who annoyed some colleagues by opposing their secret "holds" on nominations. "That's what they give election certificates for. We should always have a presumption for openness."

That brings us to the Deal That Wasn't Made. When the Senate split 50-50 this year, the Republican leader, Trent Lott, agreed with his Democratic counterpart, Tom Daschle, to even- Steven memberships of all committees. But that did not apply to Senate delegations to conference committees. Because the Senate can't get its act together, bills passed by both House and Senate to make it harder to declare bankruptcy are in limbo and similar logjams lie ahead.

What to do? As Robert Lovett liked to say, "To hell with the cheese, let's get out of the trap."

Party leaders should include as conferees the sponsors of the bills and the chairmen and ranking member of committees that report them out. (That means McCain and Feingold would be in.) Assignments to conferences should be announced promptly and resulting reports signed with objections registered.

And the Congressional press corps should take up the burden of revealing who did what to whom - and for whose benefit - inside every conference and pre-conference. Flush 'em out; get 'em to rat on each other; force the sunshine in. Or is that, as Uncle Earl Long's car salesman would say, too big a deal?

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