WASHINGTON — While Enron's collapse has stunned investors, it has not damaged the nation's energy trading industry or its energy supplies, a top federal regulator said Tuesday.
Nonetheless, said one senator, the debacle shows that government oversight of the competitive power industry is still needed to protect investors and consumers in the freewheeling markets that the energy giant helped create.
"As we evaluate how well the market is working, we need to be clear here that electricity restructuring does not mean deregulation," Sen. Jeff Bingaman, D-N.M., said as he opened a hearing. Still to be answered, he said, is "whether there was a lack of adequate oversight or regulation" by government agencies.
Pat Wood, chairman of the Federal Energy Regulatory Commission, told the hearing that his commission "has not found any substantial spillover" of the Enron collapse to the energy trading business. Stocks of some energy companies declined immediately after Enron's bankruptcy, but other energy companies have moved in to fill the void. Enron accounted for nearly 20 percent of wholesale energy trades.
"The collapse of Enron has not caused damage to the nation's energy trading or energy supplies," Wood told the Energy and Natural Resources Committee. Wood said it would be wrong to think that Enron's collapse "sounds the death knell for competition."
Sen. Frank Murkowski of Alaska, the panel's ranking Republican, called the Enron meltdown "a story of lies, deceit and cover-up" but "not an energy market failure.The lights stayed on and energy prices did not spike."
Enron's complex system of trading in everything from electricity and natural gas contracts to so-called derivatives — financial contracts used to hedge or speculate on a commodity — was conducted without close scrutiny from either federal or state regulators.
Bingaman said in an interview that a top priority should be enactment of laws requiring disclosure of energy transactions by private energy companies. He said restructuring the electricity industry to end monopoly markets "does not mean deregulation."
Some Senate Democrats, meanwhile, were expected to use the hearing to criticize the continued refusal by the White House to make public details of Vice President Dick Cheney's meetings with energy officials during development of the administration's energy blueprint last year.
President Bush told congressional leaders Tuesday that he believes "very strongly" that he not give congressional investigators the names of business executives with whom he discussed energy policy, according to House Speaker Dennis Hastert.
In his regular breakfast with the four top Democrat and Republican leaders, Bush reiterated "that he thinks the president can have informational conversations in the White House, in the Oval Office without disclosing that information," said Hastert.