Judging from the comments expressed at yesterday’s Senateconfirmation hearing for Energy Secretary nominee Spencer Abraham,California isn’t likely to get much help from the Republicans inCongress for its ailing electricity market, but the Bush WhiteHouse could offer some hope.

Abraham, a former senator from Michigan, declined to say what,if any, action the incoming Bush administration will take to dealwith the power-supply problems and potential utility bankruptciesin California, saying “premature” speculation on his part could”disrupt” ongoing negotiations at the state level. But the matterwill be an “urgent priority” of the Bush administration, Abrahamassured Democrats on the Senate Energy and Natural ResourcesCommittee. The panel’s Republicans, however, don’t think Californiais deserving of any help from the federal government.

There will be “great expectations that somehow you are going tosolve this dilemma” in California, Sen. Frank Murkowski (R-AK) toldAbraham. “I would encourage you to keep the pressure on those [who]are responsible for it” – namely California’s governor,legislature, regulators and state utilities – “and not necessarilyencourage Uncle Sam to step forward and bail out” the state. The”immediate burden has to fall on California” for the crisis, whichhe believes “was quite predictable.”

Murkowski was obviously sympathetic to California’s two,near-bankrupt utilities — Pacific Gas and Electric and SouthernCalifornia Edison – saying they have been placed in an “impossiblesituation” of not being permitted to pass along the increases intheir wholesale power costs to retail customers. The Californiaretail consumer “has to feel the hit” of these higher costs beforethere can be “meaningful corrections” in the market, he said.

Sen. Pete Domenici (R-NM) agreed the current crisis has been ofCalifornia’s own making. He singled out the state’s long-heldpolicy of not-in-my-backyard for siting new generation facilitiesas the key culprit. “I think it is an immediate crisis” inCalifornia, and the state “has to decide what they want to do”about it, he said.

Sen. Dianne Feinstein (D-CA), who won’t become a voting memberof the committee until next week, took up the gauntlet for her homestate, arguing that the problem wasn’t an isolated one, and couldhave a trickle-down effect on the entire national economy if notquickly resolved. She believes a concerted effort by state, federaland industry officials will be required to put California’s powermarket back on track.

Towards that goal, Feinstein plans to introduce legislation nextweek, possibly as early as Monday, that would give the Departmentof Energy the authority to impose regional caps on prices forwholesale power transactions in western markets.

Compared to the more contentious confirmation hearings that weretaking place on Capitol Hill this week, members of the SenateEnergy Committee treated their former colleague with kid gloves.President-elect George W. Bush picked Abraham to head up theDepartment of Energy (DOE) after he lost his bid for re-election tothe Senate last November.

The committee wasted little time yesterday in voting outAbraham’s nomination. It now will be sent to the full Senate, whichis expected to act quickly to approve him.

Murkowski called Abraham an “outstanding nominee,” and said hehad “great confidence in your ability to meet the challenges” atDOE. Sen. Byron L. Dorgan (D-ND) also said he favored the choice ofAbraham for the job, but noted that he was inheriting some “veryserious energy problems.” Likewise, Sen. Ben Nighthorse Campbell(R-CO) warned him that he was “stepping into a quagmire” at DOE,and California “is just the tip of the iceberg.”

Ironically, Abraham supported legislation in the past to abolishthe very department to which he was being nominated to head up. Buthe said this was no longer his belief, noting that theever-changing energy situation in the United States “hassignificantly altered the equation.”

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