San Diego Union-Tribune

May 2, 2001

FERC chairman defends price-control order aimed at
aiding California


WASHINGTON -- The acrimony and finger-pointing over the federal
response to California's power crisis intensified yesterday as a top regulatorlashed out at "naysayers" who criticized his actions.

Lawmakers, meanwhile, squabbled over emergency legislation to cope with this summer's anticipated electricity shortages.

At a highly partisan House subcommittee hearing, Curtis Hebert, the chairman of the Federal Energy Regulatory Commission, charged that critics have distorted a FERC order aimed at controlling wholesale power prices in California.

The complicated and limited price control formula would apply only to power sold during shortages, but Hebert said that other elements of last week's order would constrain prices during other periods.

He cited a requirement that California generators sell all available power to the state's grid operator and steps to lessen demand.

"What the commission in fact said was that it was going to attempt to
constrain prices at all times," Hebert said, defending an order that has come under withering criticism from Gov. Gray Davis and many other California officials.

But fellow commissioner William Massey, who voted against the order,
disagreed with Hebert.

"In fact, it would be my expectation that prices would rise in those
(nonshortage) hours since they would not be subject to the price mitigation measures," Massey told the energy and air quality subcommittee.

Democrats on the panel lashed out at FERC and the Bush administration for, in the words of Rep. Edward Markey, D-Mass., "aggressive indifference" to the crisis. The Democrats pushed for stricter Western regional price controls, a move opposed by President Bush and Republican congressional leaders, who say it would aggravate power shortages.

Providing a moment of levity, Markey offered his own version of the '60s hit song "California Dreamin':"

"All the streets are dark/Blackouts every day/FERC just takes a walk/And let's the gouger's play," he sang.

Republicans on the subcommittee called the FERC order a step in the right direction and defended the Bush administration's response.

"I think that people need to realize that there's very little that the federal government can do right now and accept that fact," said Rep. George Radonovich, R-Mariposa.

Legislation the House subcommittee is considering would allow the temporary waiver of several environmental regulations to maximize output at power plants if governors request such a move.

The Republican-crafted bill also would allow small independent power
generators to sell electricity to parties other than utilities if the utilities can't pay them, authorize $220 million in federal funds to fix a bottleneck in a Central Valley power transmission artery known as Path 15, allow the federal energy secretary to establish transmission corridors across federal lands and allow Western states to adjust daylight savings time as a power-saving move.

"Making the most of existing generation is the only option in the near term given the shortage of power in the West," said Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee.

But Democrats said the bill would gut environmental protections and do little, if anything, to help California and other Western states cope this summer.

Anything short of tough, regional price controls on wholesale power is "only window dressing," said Rep. Henry Waxman, D-Los Angeles.