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House Democrats Insist on Price Controls in CA

House Democrats Insist on Price Controls in CA

While Rep. Joe Barton (R-TX) awaited the go-ahead from the White House to move forward on a "package" of proposals to aid California energy markets last week, California Democratic lawmakers on Capitol Hill registered their strong objections to Barton's decision to exclude price controls on wholesale electricity transactions from consideration.

Barton forwarded the proposals to the White House energy task force a week ago and is looking for a green light to proceed with emergency California legislation that incorporates these ideas, said Barton spokeswoman Samantha Jordan. The White House has assured Barton that it will respond "quickly" so that Barton and his House Energy and Air Quality Subcommittee can proceed in an "ASAP timeframe" on any legislation. The proposals were culled from the series of subcommittee hearings on California's energy crisis that were held in recent weeks.

"Some of the legislative proposals you've circulated are intriguing," acknowledged four Democrats on the subcommittee in a letter to Barton. But "we are concerned that your list of proposals does not adequately address the single most important step the federal government should take to assist California and other states in the western power grid: reining in skyrocketing energy prices." This should be the "central focus of any [legislation] we develop, as this issue falls solely within the jurisdiction of the federal government," wrote Reps. Henry Waxman, Anna G. Eshoo, Jane Harman and Lois Capps.

The standoff between House Republicans and Democrats on the controversial issue of price controls could sink any legislation that Barton introduces to address the out-of-control California power markets.

In support of their position, the House Democrats referred to the testimony of FERC Commissioner William Massey, who told the subcommittee that FERC needed to "call a time out from this broken western electricity market." He is the only member of the Commission who advocates a temporary price cap on bulk power sales in western markets.

Massey also has called on the Commission to undertake an investigation under Section 206 of the Federal Power Act to determine whether wholesale electricity prices in the West are unjust and unreasonable. Barton reportedly favors such a probe.

"We believe that it is essential that the subcommittee take immediate action to address wholesale prices. There are many legislative vehicles and options from which the subcommittee can draw in crafting an emergency bill," the lawmakers wrote to Barton. Without federal intervention on the price issue, "California and other western states could face an enormous energy crisis this summer."

In addition, "we...strongly object to your proposals to undermine the Clean Air Act. There is widespread agreement among those directly involved in California's electricity system that clean air rules are not responsible for [the current] electricity shortages." Environmental Protection Agency Administrator Christine Todd Whitman has refused to cite the clean air regulations as a contributing factor as well, they said.

Among some of the key ideas offered by Barton include proposals to establish a Federal Emergency Management Agency office in California to help the public deal with the blackouts that are predicted for this summer; turn over responsibility for the expansion (and payment) of the critical Path 15 - a south-to-north transmission line for shipments in California - to the federal Western Area Power Administration; require FERC to establish interconnection standards for distributed generation (which has long been advocated by Massey); require FERC to issue an order permitting Qualifying Facilities and other small generators to make power sales to third parties; and allow states to adjust Daylight Savings Time.

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