Sen. Dianne Feinstein (D-CA) is preparing legislation that wouldcall for a price cap to be imposed on wholesale electricitytransactions in the western region during emergency situations, anaide to the senator said.
She “is working with a number of members in the Senate” on thelegislation, which currently is in the “early stages ofdevelopment,” the aide noted. The measure probably will beintroduced later this month.
“The legislation could involve giving the energy secretary…theability to impose [such] caps under certain conditions,” the aidesaid. Before the regional cap could be imposed, “there would haveto be a number of findings met” to determine whether an emergencysituation exists, he noted. The details, he stressed, “still arebeing worked out.”
On the House side, Rep. Anna G. Eshoo (D-CA) is drafting a billto give the Department of Energy (DOE) the authority to levy aregional cap to tame wholesale power prices. Although no specificcap figure was mentioned, she indicated it would be sufficient tocover generators’ costs to produce energy, plus a limited profitmargin. Also, the bill will provide for customer refunds from”unjust” and “unreasonable” rates.
The House legislation will give the “Secretary of Energy theauthority to do what the FERC has thus far refused to do —namely, to mandate reasonable wholesale prices that will benefitthe consumer,” she said in a prepared statement. Eshoo plans tointroduce the legislation when the House reconvenes later thismonth, an aide said. Her bill would be a companion to Feinstein’smeasure.
Vocal critics of FERC’s handling of the California power crisis,Feinstein’s and Eshoo’s proposals would be at odds with theCommission’s reforms for the bulk electric market. While FERC hasset a $150/MWh soft price cap in California, it has resistedgrowing cries for a regional cap.
California Gov. Gray Davis, as well as a number of othergovernors of western states, and Energy Secretary Bill Richardsonhave voiced their support for a regional price cap.
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