Republican House energy leaders have urged the Federal Energy Regulatory Commission to expand its California market mitigation plan to 24 hours a day across the West this summer.

The recommendation came Tuesday as California’s prime energy expert, S. David Freeman, briefed the press in Washington and headed for Capitol Hill, calling for FERC to “do its job” and install price caps to protect consumers in California (see separate story, this issue). FERC has scheduled a meeting Monday, June 18 to consider rehearing requests on its April 26 mitigation order. That order — which FERC has staunchly defended as NOT a price cap — established a single market clearing price for real-time transactions in the California Independent System Operator (Cal-ISO) during times of reserve deficiencies (Stage I, II and III emergencies) in the state. During those times, real-time transactions are based on a proxy price tied to natural gas prices (see Daily GPI, April 26).

Led by Energy and Commerce Committee Chairman Billy Tauzin (R-LA) and Energy and Air Quality Subcommittee Chairman Joe Barton (R-TX), the House delegation’s letter to FERC cited “the second worst drought in a century” and the threat of blackouts and price spikes in California.

“To ensure that prices are just and reasonable during the critical months ahead, we believe the Commission can and should do more to mitigate wholesale electricity prices in western markets.” The Republicans called for a “comprehensive plan to mitigate wholesale prices and aggressively monitor wholesale sales of electric energy…If the Commission finds that a rate charged does not comply with the price mitigation plan, it should strictly enforce the plan and require refunds and penalties to the full extent allowed by law.”

Also, to give consumers an incentive to conserve, FERC “should (1) establish or certify a wholesale ‘clearinghouse’ for demand reduction agreements; and (2) enable consumers, whether individually or through aggregation arrangements, to sell foregone power to their own local distribution utility or to third-party purchasers.”

The letter had been promised last week when Tauzin and Barton announced that attempts to pass emergency legislation to relieve the western states had stalled on the issue of price caps (see Daily GPI, June 7).

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