PROMOTE FUNCTIONING WHOLESALE ELECTRICITY MARKETS

WHEREAS, western wholesale electricity markets suffered severe power shortages, skyrocketing electricity prices, infrastructure insufficiencies and extreme price and supply volatility; and

WHEREAS, this wholesale market dysfunction led to power system failures, rolling blackouts, and a downturn in the region's economy - the electric reliability impacts may be felt for years; and

WHEREAS, the state of California, other Western States and other officials have alleged market power abuse and market manipulation by energy trading companies contributed to the severity of the western wholesale electricity market crisis which adversely affected electric consumers' bills; and

WHEREAS, Enron Corporation recently released documents revealing that the company's trading arm engaged in calculated strategies to manipulate the western wholesale energy market to inflate profits; and

WHEREAS, the documents show that Enron's traders intentionally misled California and other officials in the Western States, falsified bid information and schemed to avoid federal price caps in order to inflate energy prices and profits; and

WHEREAS, the documents allege that traders from other energy trading companies also engage in these strategies to manipulate the wholesale energy market and inflate prices and profits; and

WHEREAS, allegations of market flaws and abuse exist for wholesale electricity markets across the country,

NOW, THEREFORE, BE IT RESOLVED, that The U.S. Conference of Mayors supports quick and decisive action by federal regulators and the U.S. Congress to ensure that strong consumer protection rules exist to promote functioning wholesale electricity markets, assure reliable electric service, and allow for effective marketplace monitoring to prevent manipulation and abuse; and

BE IT FURTHER RESOLVED, that if such action is not taken, consumers across the country are likely to suffer the extreme price spikes and service disruptions that occurred in the West.