Thursday | June 7, 2001

Energy proposal dropped Congress won't help California

06/07/2001

By Jim Landers / The Dallas Morning News

WASHINGTON – House Republicans gave up on an emergency bill to help California with its power crisis Wednesday, saying they could not agree to Democratic demands for price controls.

The decision means California will enter a summer of blackouts and uncertain electricity supplies without help from Congress.

Rep. Joe Barton, R-Ennis, blamed House Democratic Leader Dick Gephardt of Missouri for the impasse, but he also said Congress had run out of time to pass legislation that could make a difference in California this summer.

Mr. Gephardt put the blame on the Republicans.

Both parties agreed, however, that it is now up to the Federal Energy Regulatory Commission to fix the ailing California power market and protect consumers from any effort to jack up prices.

"Price gouging is already illegal and this Congress should send a clear signal now that it must end," Mr. Gephardt said.

Rep. Billy Tauzin, R-La., chairman of the House energy committee, said committee Republicans were sending a letter to the commission urging "aggressive monitoring" of electricity and natural gas prices.

Mr. Barton challenged natural gas pipeline companies shipping to California for charging prices that "quite possibly could be market manipulation by outside parties."

Last month, President Bush assigned new FERC Commissioner Pat Wood III to investigate California natural gas prices, which remain more than twice the cost of gas delivered to New York City.

Mr. Tauzin said the letter would also urge FERC to encourage "negawatt" auctions in California, so power consumers could profit from conservation that returns unused electricity to utilities.

Power blackouts are expected several times a week this summer in California because of a shortage of power generation. It's partially caused by a major drought in the Pacific Northwest that has left hydroelectric dams with little generating capacity. But the state's power crisis is also blamed on a series of missteps in California's efforts to restructure the market.

The state's power bill is expected to rise from $7 billion in 1999 to more than $50 billion this year.

Democratic Gov. Gray Davis has slammed the Bush administration and the FERC for not doing more to curb electricity prices in the state, and he returned to that theme Wednesday, after Mr. Barton's bill was dropped.

"They walked away," said Steve Maviglio, Mr. Davis' press secretary.

Mr. Tauzin tried to put a positive spin on the failure of the bill. He said Mr. Davis and Mr. Bush have already adopted many of its provisions through executive orders that will lessen the number of blackouts.

The bill called for spending $225 million on a new transmission line between northern and central California to relieve one of the major bottlenecks in moving power around the state. Mr. Bush has ordered federal power agencies to get the line built.

Mr. Tauzin also said the president has instructed the Federal Emergency Management Agency to prepare for California blackouts, which was another element in the bill.

Mr. Barton was less upbeat.

"While we're here to declare victory today," he said, "I hope I won't have many more victories like this."

Mr. Barton said Mr. Gephardt "apparently decided to kowtow to the more radical wing of his party and that's in favor of price caps."

"The president won't accept price caps," he said, "and Joe Barton won't accept price caps."

The FERC has the authority to ensure "just and reasonable" wholesale electricity prices, and it has challenged $124 million charged by power companies in California this year.

But the commission's efforts have not satisfied California Democrats and some Republicans.

"We need to continue to pressure FERC," said Rep. Mary Bono, R-Calif.

Mr. Gephardt said House Republicans had simply walked away from the bill.

"My colleagues on the committee and I had been urging Republicans to put on the table an amendment that gave real price relief from astronomical electricity prices on the West Coast," he said.

"The best Republicans can do is offer up baseless charges and partisan potshots that do not help people."

http://www.dallasnews.com/business/stories/387122_electric_07bus.html

-- Martin Thompson (mthom1927@aol.com), June 07, 2001