WASHINGTON | As gas prices in Northwest Indiana are setting new all-time highs approaching the Memorial Day weekend, the U.S. House passed legislation allowing the Federal Trade Commission to punish companies that artificially inflate gas prices.
The House voted 284-141 Wednesday for the Federal Price Gouging Protection Act, co-sponsored by Rep. Pete Visclosky, D-Ind. The legislation bans sellers from charging "unconscionably excessive" prices.
The bill would allow the FTC to go after profiteering companies -- but only after the president has declared an energy emergency.
The fast-tracked bill, which the Bush administration threatened to veto, needed a two-thirds majority in the House and passed that threshold by a one-vote margin. The bill must still pass the Senate, where Democrats hold a narrow majority.
Under the legislation, companies could face criminal penalties up to $150 million, while individuals could be fined up to $2 million and imprisoned for up to 10 years.
The fines would be funneled to a federal fund that helps low-income families pay their energy bills.
Visclosky and other House Democrats say the legislation would help bring down gas prices and also protect consumers in the aftermath of a natural disaster like Hurricane Katrina.
Visclosky's office cited an AAA report that pegged Indiana gas prices at an average of $3.41 per gallon, coming on the heels of last month's news that the six biggest oil companies reported $30 billion in quarterly profits.
But others question whether the bill would help.
In a 2006 report on gas gouging after Hurricane Katrina, the FTC -- the federal agency entrusted by the House bill to determine what constitutes price gouging -- said "the offense of price gouging is difficult to define." That means that legislation to control prices could "leave businesses with little guidance on how to comply" and actually hurt consumer interests, the FTC said.
A White House statement said price gouging legislation would amount to "price controls and in some cases bring back long gas lines reminiscent of the 1970s," according to an Associated Press report.
The real problem, some experts say, is simply a production shortage.
Visclosky, who recently introduced legislation to boost investment in alternative energy technology, has acknowledged that there is no short-term solution to the country's energy crisis.
Even so, he said "addressing gas price gouging is the first step we must take to lower the cost of gasoline."
