As an energy company, Enron should have been better regulated to some extent by FERC as well as other federal agencies whose oversight failures already have been documented by the Governmental Affairs Committee as well as the Permanent Subcommittee on Investigations, of which, Senator Collins is the Ranking Member.
In questioning FERC Chairman Pat Wood, Senator Collins commended Wood on reforms that he has worked to institute since taking the position, but expressed continued skepticism regarding government oversight of energy markets.
"Why should people be confident that we have the ability to police these markets in a way that will prevent gaming the system such as we saw in California, and with Enron?" said Senator Collins. Looking at a broader issue of market fairness, Senator Collins raised the issue of having ratepayers in more frugal states foot the bill for consumers elsewhere who are using more electricity and at higher rates. "For example," said Senator Collins, "last week, the system operator in New England announced that because southwest Connecticut does not have sufficient power to meet its demands, it needs a transmission upgrade slated to cost at least $600 million. Some argue that the cost should be borne not only by those who live in southwest Connecticut – and will thus benefit from the investment – but by all New England consumers. I question the fairness of this approach especially since Connecticut has the highest residential electricity consumption of any New England state. Is it fair to impose on the rest of New England the cost of this upgrade?"
The average monthly household consumption in Connecticut is 711 kilowatt hours, compared with just 479 kilowatt hours in Maine.
Chairman Wood responded that he is trying to move FERC toward a system where costs and benefits are more centered on the specific users, and acknowledged that the allocation of costs is, in fact, one of the most difficult issues facing FERC.