Hebert Says California Has 'Grasp' on Power Crisis
Although he's "sympathetic" to the plight of electric customers
in California, FERC Chairman Curt Hebert Jr. said last week he
believes the Commission should stay clear of the state and let it
solve its own problems --- at least for now.
"I am one who believes that when there are state problems we
should let the states do what they can to resolve their conflicts.
And it is my belief.[that] the worst thing we can do is get in
their way," the new chairman said.
Gov. Gray Davis and the California legislature are "working
hard" to resolve the market turmoil, he noted. "We have to give
them the opportunity to do that.I think that they've got a grasp on
the problem. I don't think they need us at this point to do
anything." However, Hebert conceded that something could occur
tomorrow to "change our minds."
President George W. Bush, who moved quickly last Monday to
appoint Hebert as FERC chairman, also favors a state solution to
the continuing power crisis in California. "President Bush has made
it clear that [in] situations like California, we need to be
careful" to prevent the crisis from spreading to other states,
Hebert made the remarks during an impromptu press briefing that
was held following the Commission's regular meeting last Wednesday.
He stressed that he was not advocating a more limited role for FERC
"I don't care what has to be done or what needs to be done, I
[am] willing to do that if it helps the folks in California," he
said. But he believes the state should be given first crack at
solving its own problems.
In the meantime, "I'm not aware of anything that we're doing
right here at FERC at this moment" to ease the situation in
California, Hebert noted. But "I think you'll see this Commission
continue to try to give guidance to California."
He said he plans to meet with Sen. Dianne Feinstein (D-CA), who
has said FERC has been like an "ostrich with its head in the sand"
with respect to the turmoil in the California power markets. She
has openly criticized the Commission for its failure to step in and
set "just and reasonable" wholesale power rates in the state
despite alleged evidence of market-power abuse by suppliers.
"No one's provided me with any information" that would suggest
that "illegal conduct" has occurred or is occurring in California,
He also noted that Energy Secretary Spencer Abraham plans to
meet with a nine western governors in Portland, OR, on Feb. 1-2 to
discuss the continuing power crisis in California and the western
region, as well as the issue of a regional price cap. Hebert, who
is expected to attend, is opposed to price caps of any form, saying
they could cause long-term damage in a number of power markets.
In other developments, Hebert said he will have three priorities
as chairman: 1) getting regional transmission organizations "up and
running; 2) dealing with electric and natural gas pipeline
deliverability issues; and 3) hydroelectric re-licensing.
He further noted that he does not intend to "erase or do away
with anything" that former Chairman James J. Hoecker did during his
more than three-year tenure at the FERC helm. But "there will be
some changes made" at the Commission over the next four to six
months, he said, but he did not go into details.
An avowed supporter of free enterprise, Hebert refused to
discuss how his approach to energy markets would differ from that
of Hoecker, who stepped down on Jan. 18.
As one of his last actions, Hoecker recommended that FERC seek
to enjoin the state of California from staffing the Independent
System Operator (Cal-ISO), the keeper of the state's power grid,
with state political appointees. But Hebert doesn't appear eager to
heed the advice. "I'm not prepared to go down that road right now,"
he told reporters.
Lastly, Hebert said he has set up a team led by his legal
advisor, Joshua Z. Rokach, to deal with the backlog of nearly 2,000
cases at the Commission. "We need to move forward" with these