Bill to Set Regional Price Caps Introduced
Sen. Dianne Feinstein (D-CA) introduced legislation on Capitol
Hill last week that would give the Department of Energy (DOE) the
authority to overstep FERC by setting an interim regional price cap
or cost-based rates on wholesale power transactions in 11 western
The legislation, which is co-sponsored by Sen. Barbara Boxer
(D-CA), seeks to amend the Department of Energy Authorization Act
of 1997 to allow the secretary to impose a temporary regional price
cap or cost-of-service rates (to cover a generator's production
costs, plus a reasonable rate of return) when FERC determines the
rates to be "unjust and unreasonable," but fails to remedy them.
The DOE secretary's action would remain in effect until "just
and reasonable" rates are restored to a market. The governor of any
state within the region would be able to opt out of the cap,
according to the legislation. The measure would apply to bulk power
transactions in California, Oregon, Washington, Nevada, Arizona,
Idaho, Montana, New Mexico, Colorado, Utah and Wyoming.
FERC has steadfastly opposed a regional price cap, while the
governors of the western states have favored it. "This bill is
being introduced after [the] Federal Energy Regulatory Commission
has turned down frequent requests to establish a temporary regional
wholesale price cap despite finding that the electricity generators
are charging 'unjust and unreasonable' rates," Feinstein said.
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