San Diego Union-Tribune

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18-Jan-2001 Thursday 

CALIFORNIA POWER CRISIS 
New D.C. team not likely to play major role in state's power woes | Bush aide calls it a California problem
 

Toby Eckert 
COPLEY NEWS SERVICE 

WASHINGTON -- The incoming Bush administration signaled yesterday that it sees a limited role for itself in resolving the California power crisis.

"We are reviewing any federal options, if there are any, to see what type of helpful role could be played," Bush spokesman Ari Fleischer said yesterday. "I think all experts agree -- and we concur -- this is predominantly (a state problem) and the solution will be found in California."

He made his comments after a Stage 3 power emergency was declared in California, but before blackouts started rolling through the state.

Another nominated Bush Cabinet member, designated Treasury Secretary Paul O'Neill, said at his confirmation hearing yesterday that Gov. Gray Davis has the "tools" to address the problem "and it's not clear to me that there needs to be federal intervention."

So far, Bush has had little to say publicly about California's energy problem, other than acknowledging its severity. His choice to head the Department of Energy, former Michigan Sen. Spencer Abraham, has said even less.

But Abraham, who previously advocated abolishing the Energy Department, is sure to be pressed on the issue today during a confirmation hearing before the Senate Energy and Natural Resources Committee.

Sen. Dianne Feinstein, D-Calif., a member of the committee, is writing legislation that would allow the energy secretary to impose caps on wholesale power prices if current rates are judged to be unjust or
unreasonable.

"Certainly she wants to ask him whether he would be ready to do something like that," said Feinstein spokesman Howard Gantman.

Some industry insiders think they already know the answer.

"It's going to be awfully difficult for a free-market administration to move to price caps," said one regulatory expert, who asked to remain
anonymous.

Outgoing Energy Secretary Bill Richardson has advocated wholesale price caps. But the Federal Energy Regulatory Commission, or FERC, which has the power to set wholesale rates, has refused to go along with the idea.

Indeed, experts say the most telling clues as to how the incoming administration might approach the California situation won't come until Bush starts making his appointments to FERC.

Bush will be able to appoint a Republican majority to the five-member commission, including its chairman, subject to Senate confirmation.

Abraham has no particular expertise on energy issues.

Angela Flood, a Bush spokeswoman, said Abraham "learns issues quickly" and has undergone intensive briefings from a team of energy experts.

"I know that California is an issue they've focused on," Flood said.

Bush has not said when he will fill the two openings on FERC.

Patrick Wood, a Texas utility regulator who is thought to be a leading candidate, has said that FERC needs to be more aggressive in managing problems with deregulation. Wood, who heads the Texas Public Utility Commission, is a member of the team advising Bush on energy issues.

Judy Walsh, another member of the Texas commission, is also said to be in the running for a slot on FERC.

Both have gotten high marks from industry and consumer groups for their handling of Texas' move toward power deregulation.