May 24, 2007 in Business

House takes aim at gas price gouging

Associated Press The Spokesman-Review
 
Associated Press photo

Rep. Bart Stupak, D-Mich., right, accompanied by Rep. Peter Welch, D-Vt., left, and Christopher Carney, D-Pa., center, answers a reporter’s question during a news conference at a gas station on Capitol Hill on Wednesday.
(Full-size photo)

WASHINGTON — Responding to high costs at the pump, the House approved legislation Wednesday that would outlaw gasoline price gouging.

Many lawmakers said that may be easier to say than to detect or enforce.

The legislation would penalize individuals or companies for taking “unfair advantage” or charging “unconscionably excessive” prices for gasoline and other fuels.

Opponents said the language was too vague and that the Federal Trade Commission, which would enforce the law, has not clearly defined price gouging.

“I don’t know what `unconscionably excessive’ means,” said Rep. Joe Barton, R-Texas.

The bill’s chief sponsor, Democratic Rep. Bart Stupak of Michigan, said he had no doubt the FTC would be able to determine price gouging once the agency had a law to uphold.

The measure would establish the first federal law against energy price gouging. The FTC now can investigate price manipulation under antitrust laws. Currently, 29 states have price gouging statutes; enforcement varies widely.

Stupak’s proposal only would go into effect — and then for just 30 days — if the president declared an energy emergency.

The bill calls for penalties of up to $150 million for companies and up to $2 million and 10 years imprisonment for individuals found to be engaged in price gouging.

Twenty-nine state have various price gouging statutes, but the vary widely in enforcement.

The FTC has investigated allegations of price manipulation but failed to find widespread violations. In a report last year, the agency said an investigation after Hurricane Katrina hit in 2005 uncovered 15 incidents that could have been price gouging. But other factors also could have explained the high prices, it said.

The House passed the legislation by a vote of 284-141 as majority Democrats pushed for action ahead of the Memorial Day weekend. Prices at a near-record levels heading into the holiday, the traditional kickoff for the summer driving season.

Senate Democrats said they would take up energy legislation — including price gouging — next month after they finish an immigration bill.

That energy measure would require that vehicles get better mileage and that 35 billion gallons of ethanol serve as a substitute for gasoline by 2022.

“Our legislation will dramatically increase American-made and grown renewable fuels production,” said Senate Majority Leader Harry Reid, D-Nev.

House Speaker Nancy Pelosi, D-Calif., also has promised an “energy independence” proposal before July 4.

But lawmakers have acknowledged such measures will do little to ease the price crunch at the gas pumps. The House’s decision to move ahead on the price gouging measure was viewed as giving lawmakers the chance to vote on gas prices before Congress leaves for a weeklong vacation.


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