San Diego Union-Tribune

May 23, 2001

Democrats promise to renew U.S. House fight for price caps

By FINLAY LEWIS
COPLEY NEWS SERVICE 

WASHINGTON -- Accusing power generators of price gouging, a group of California House Democrats vowed yesterday to try again this week to legislate price caps in order to bring down energy bills in the state.

Rep. Henry Waxman, D-Los Angeles, author of the price-cap measure, said he would offer the measure as an amendment tomorrow. At that time, the House Energy and Commerce Committee plans to complete work on a bill intended to reduce the number of blackouts expected in California this summer due to shortages in the supply of electrical power.

Waxman and other Democrats seized on Republican fund-raising events Monday night and last night involving President Bush and Vice President Cheney. They charged the Republican administration with exacerbating the California situation by doing the bidding of the oil and gas industry in return for campaign contributions.

"This is a contrived crisis in order to wreck our environmental protection laws," Waxman said. "It is a contrived crisis in order to produce 1,000 percent increases in profits for some of these generators."

On the agenda when the committee meets tomorrow will be a bill by Rep. Joe Barton, R-Texas, that would allow California Gov. Gray Davis to waive some air pollution limits temporarily to increase power production in the state when blackouts are imminent.

It also would include:

Federal help to ease a power transmission bottleneck in the Central Valley.

Mandated power savings at federal facilities.

State discretion in adjusting daylight-saving time.

An easing of the ties between some small, independent power generators and large utilities.

Earlier this month, a subcommittee chaired by Barton rejected Waxman's price-cap amendment as some California Republicans complained that the idea of limiting power rates was politically inspired and would do nothing to solve California's crisis.

The Bush administration and the energy industry oppose price caps, saying that such an approach would distort the market and worsen the electricity shortage in California and many other Western states by discouraging exploration and production.

Waxman's plan would require federal regulators in many cases to tie
wholesale power rates to production costs, plus a "reasonable" profit.

At the news conference, Rep. Bob Filner, D-San Diego, derided Republican opposition to price caps.

Referring to wholesale power generators, Filner argued, "They were making money at $30 a megawatt; now they are charging up to $2,000. Believe me: They can make money off the market with a cost-base rate. They have done it for 100 years. They can continue doing it."