Interest in Regional Price Caps Stirs on Capitol Hill
Sen. Dianne Feinstein (D-CA) is preparing legislation that would
call for a price cap to be imposed on wholesale electricity
transactions in the western region during emergency situations, an
aide to the senator said.
She "is working with a number of members in the Senate" on the
legislation, which currently is in the "early stages of
development," the aide noted. The measure probably will be
introduced later this month.
"The legislation could involve giving the energy secretary...the
ability to impose [such] caps under certain conditions," the aide
said. Before the regional cap could be imposed, "there would have
to be a number of findings met" to determine whether an emergency
situation exists, he noted. The details, he stressed, "still are
being worked out."
On the House side, Rep. Anna G. Eshoo (D-CA) is drafting a bill
to give the Department of Energy (DOE) the authority to levy a
regional cap to tame wholesale power prices. Although no specific
cap figure was mentioned, she indicated it would be sufficient to
cover generators' costs to produce energy, plus a limited profit
margin. Also, the bill will provide for customer refunds from
"unjust" and "unreasonable" rates.
The House legislation will give the "Secretary of Energy the
authority to do what the FERC has thus far refused to do ---
namely, to mandate reasonable wholesale prices that will benefit
the consumer," she said in a prepared statement. Eshoo plans to
introduce the legislation when the House reconvenes later this
month, an aide said. Her bill would be a companion to Feinstein's
Vocal critics of FERC's handling of the California power crisis,
Feinstein's and Eshoo's proposals would be at odds with the
Commission's reforms for the bulk electric market. While FERC has
set a $150/MWh soft price cap in California, it has resisted
growing cries for a regional cap.
California Gov. Gray Davis, as well as a number of other
governors of western states, and Energy Secretary Bill Richardson
have voiced their support for a regional price cap.
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