San Diego Union-Tribune

June 15,  2001

Worried Republicans urge more price curbs

By FINLAY LEWIS
COPLEY NEWS SERVICE 

WASHINGTON -- A lengthening list of politically endangered California
Republicans appears to have spurred the Bush administration into a retreat on the state's volatile electricity pricing issue.

The White House desire to keep Republican control of the House in next
year's elections will be an unspoken but clear concern when the Federal
Energy Regulatory Commission meets Monday to consider further price
restraints, according to a wide range of analysts.

The expected reversal by the administration and FERC is due, at least partly,
to complaints from embattled California House Republicans that Democrats
have gained the political high ground by calling for price relief.

"Republicans have come to realize that the entire pricing structure here . . . is a potential political killer," said Tony Quinn, a Sacramento political analyst with past ties to the GOP.

After months of opposing price caps, the administration gave the green light to FERC to devise a plan to restrain wholesale electricity prices in California and 10 nearby states by pegging them to the costs of the least efficient producer in a given market.

This approach has been invoked in California during energy-supply
emergencies. But critics say the existing policy allows any price to be charged
when there are no emergencies.

Wholesale electricity prices have plummeted in recent weeks, and some
Republicans credit the existing FERC order. But other analysts point to a
variety of factors.

The new plan before FERC would leave price restraints in place around the
clock during the summer months in California and much of the West
regardless of energy availability.

The proposal is far more generous to the power industry than the price-cap
formula being advanced by congressional Democrats and Gov. Gray Davis.
Still, it represents a substantial retreat by FERC and the White House. Until
now, both have insisted on giving free play to market forces except in
emergencies.

"The more savvy Republican leaders here have figured out that you can't go
down in flames for an ideological position when your constituents are being
hurt," said political scientist Sherry Bebitch Jeffe of the University of Southern
California.

With the GOP enjoying only an 11-vote margin over the Democrats in the
House, Republican strategists have assessed that a number of
Republican-held seats in California could switch hands largely because of
soaring electricity prices.

Those in danger include Reps. Doug Ose of Sacramento, author of the pricing plan now under consideration by FERC, and Rep. Steve Horn of Long Beach, a moderate.

According to some analysts, others in jeopardy are Reps. Elton Gallegly of
Simi Valley, Richard Pombo of Tracy, and Gary Miller of Diamond Bar.

Quinn also argued that Rep. David Dreier of San Dimas, chairman of the
powerful Rules Committee and a rising GOP star in the House, could face
energy-related problems. He added that Rep. Mary Bono of searingly hot
Palm Springs could find herself losing some ground in her otherwise safe GOP district.

"(The California energy crisis) has all the earmarks of a classic attack issue,"
said John R. Pitney, a political scientist at Claremont-McKenna College.
"You have a Republican administration headed by two people with
connections to the oil industry, and you have a very visible problem and a
solution that is easy and plausible -- (Democratic) price controls."

House Majority Whip Tom DeLay of Texas this week launched a
damage-control effort by assigning a team of Republicans to help counter
Democratic attacks on the White House. The team's assignment includes daily floor speeches defending Bush's energy policies.

The energy crisis is only the latest development in a trend that has increased
the sense of Republican congressional vulnerability in California.

Even before the blackouts and stratospheric energy bills, long-term
demographic shifts were tilting the state even more toward Democrats.
Congressional redistricting also is expected to exact a toll on the Republican
delegation.

Compounding the party's troubles was the perception that Bush, having lost
California by a wide margin to Democrat Al Gore last fall, had written off the
state for his 2004 re-election campaign.

Then came the sudden loss of Republican control of the Senate, a
development that reminded GOP strategists of their tenuous position in the
House.

"The administration soon discovered that California is still populated by a
large number of Republican congressmen who didn't appreciate the White
House's stance on the problem," said Steve Smith, head of a think tank at
Washington University in St. Louis that studies problems of politics and
economics.

Meanwhile, some Democrats appear to be betting that the pending FERC
plan will solve neither California's energy pains nor the GOP's political
problems.

House Minority Leader Richard Gephardt told reporters yesterday that the
measure would amount to only a "kind of tweaking" of FERC's existing
emergency pricing order for California -- an approach that he said has proven
"ineffective, overly complicated, and loaded with loopholes."

Gephardt added, "It still allows huge price gouging by the electric companies
with regard to wholesale prices in California."