Democratic Lawmakers Demand Price Caps From FERC (AP) --

California's Democratic legislative leaders asked a federal appeals panel Tuesday to order federal regulators to cap wholesale electricity prices.

"The people of California need some protection from these outrageous prices," said Assembly Speaker Robert Hertzberg.

The move by Hertzberg of Van Nuys and Senate President John Burton of San Francisco came after unsuccessful lobbying by Gov. Gray Davis and other lawmakers to get the Federal Energy Regulatory Commission to impose strict price caps.

"The citizens of California are suffering immediate irreparable harm as a result of FERC's abrogation of its duty to establish just and reasonable rates for electricity," the lawmakers wrote to the 9th U.S. Circuit Court of Appeals, which has jurisdiction over FERC.

The lawmakers, joined by the city of Oakland, said California's looming threat of continued blackouts "are an imminent threat to the health, welfare and safety of every California citizen."

"There's a danger this entire economy can come unwound," warned former governor and now Oakland Mayor Jerry Brown. He plans to recruit his fellow mayors to also pressure FERC.

However, Assembly Republican Leader Dave Cox of Fair Oaks questioned whether the federal court will intervene in the commission's ongoing regulatory decisions. "If the court takes it, it's meritorious. If not, it's political," Cox said.

The suit comes after more than a year of wholesale power prices reaching historically high levels. In December, prices in California reached $200 per megawatt hour -- and they have skyrocketed to as much as $1,900 per megawatt hour during peak times since then.

The Bush administration ardently opposes price caps and President Bush has declined Davis' request to urge FERC to impose strict caps.

Vice President Dick Cheney, chief architect of the administration's energy plan released last week, said capping prices would not increase energy supplies or reduce demand.

"We get politicians who want to go out and blame somebody and allege there is some kind of conspiracy ... instead of dealing with the real issues," Cheney said Sunday.

Cheney criticized Davis, a Democrat, for what he called a "harebrained scheme" to use the state's budget surplus to buy power because California's two largest utilities face enormous financial problems.

For the short term, the Bush administration has approved Davis' request to expedite permits for new power plants and has ordered federal facilities in California to reduce energy consumption 10 percent this summer.

Sacramento and the White House appear locked in a high-voltage war of rhetoric over energy policies. There is broad bipartisan dissatisfaction in Sacramento with Washington's response to California's energy crisis -- the result of its own 1996 deregulation rules.

Last month FERC did order a one-year cap on electricity sold into California during power emergencies, when power reserves fall below 7 1/2 percent. The agency did not set a price and also required the state to join a regional transmission organization, which could limit California's ability to control its own power grid.

Davis called the plan a "Trojan horse," and state power regulators dismissed the cap as inadequate, saying it would profit power generators at ratepayers' expense.

In addition, Davis and state lawmakers sharply criticized FERC for considering requiring the state's power grid operator to add a surcharge on power sales to pay generators the money they are owed by the state's two large financially strapped utilities.

The case filed Tuesday is Petitioners v. Federal Energy Regulatory Commission, 01-70812.

-- PHO (owennos@bigfoot.com), May 23, 2001

Answers

Hairbrained scheme is right. Never in history, that I can recall, has the governor of any state taken on such dictatorial powers in peace time.

-- Billiver (billiver@aol.com), May 23, 2001.

If the people need protection against such outrageous prices, why didn't the Calif. legislature think of that and prepare a long time ago? Most other states did. Does it have to take a federal appeals court to bail them out?

-- Wayward (wayward@webtv.net), May 23, 2001.