San Diego Union-Tribune

May 11, 2001

GOP bars energy price lids in tight party-line voting
     Plan was aimed to aid California, 10 other states

By TOBY ECKERT
COPLEY NEWS SERVICE

WASHINGTON -- Republican lawmakers slapped down an effort yesterday to impose price controls on wholesale power sold in California and 10 other Western states.

In the first test of congressional resolve on the issue, Republicans on the House energy and air quality subcommittee, including three from California, voted unanimously against the temporary price limits, while most Democrats on the panel supported the move. The issue will now come before the full House Energy and Commerce Committee.

The subcommittee vote dramatized the deep partisan divisions that have developed, even within California's congressional delegation, over how the federal government should respond to the crisis.

While Democrats argue that price controls would bring stability to the state's chaotic power market, most Republicans -- including President Bush -- counter that they would aggravate electricity shortages by discouraging needed power generation and sales.

After two days of rolling blackouts in California, the subcommittee vote was being watched closely for any signs of wavering on the issue by Republicans worried about the political fallout.

Rep. Henry Waxman, D-Los Angeles, offered the price controls as an amendment to a Republican-crafted bill that contains several measures crafted to boost electricity production and encourage energy conservation in the West.

The amendment would require federal regulators to impose either "just and reasonable" rates for wholesale power that fluctuate with demand or rates tied to the cost of producing the power, plus a reasonable profit.

Electricity generated at new power plants would be exempt from the limits so as to encourage their construction.

Sen. Dianne Feinstein, D-Calif., is pushing a similar measure in the Senate, so far without success.

Wholesale electricity prices in California have soared in the past year, a side effect of deregulation of the state's power market and increased prices for natural gas, which fuels most of the power plants. Utilities have been unable to pass on the full cost of the power to customers.

The amendment was defeated 20-12. The underlying bill passed on a party-line vote of 17-13.

It would allow the governor to temporarily waive some air- pollution limits to increase power production in California when blackouts are imminent; provide federal funding to fix a major power transmission bottleneck in the Central Valley; require federal facilities in power-starved states to cut
their energy use by 20 percent; allow California, Nevada, Oregon and Washington to adjust daylight-saving time; and allow small, independent power generators to escape exclusive contracts with utilities if, in the future, they are not paid by the utilities.

In the Senate yesterday, Democrats also were on the attack, saying the Bush administration has been slow to respond to high gasoline prices and other escalating energy costs.

Sen. Byron Dorgan, D.-N.D., called for a joint House-Senate investigation into the rapid increases in prices for gasoline, electricity, natural gas and heating fuel, to determine whether companies are price gouging.

Sen. Dick Durbin, D.-Ill., demanded the Bush administration give consumers a say in the national energy policy it plans to unveil next week, proposing the creation of a national consumer energy commission to recommend solutions for energy supply, distribution and pricing concerns.

Dorgan and Durbin said they had not yet sought the support of Republicans for their proposals -- a necessary move in the GOP-led Senate.