As he prepares to hand over the Senate Energy and Natural Resources Committee chairman’s gavel to Sen. Jeff Bingaman (D-NM), Sen. Frank Murkowski (R-AK) yesterday refused to completely reject the idea of placing caps on wholesale electricity prices in California. But, in an appearance before reporters at a Capitol Hill news conference on energy issues, the Alaska lawmaker also made it clear that he would first have to be assured that efforts to boost generation in the state would not be curtailed before he would consider the idea of a price cap on wholesale electricity prices in California.

The recent defection of Sen. James Jeffords (I-VT) from the Republican Party has shifted the balance of power — and the chairmanships — in the Senate from the GOP to the Democrats.

During the press conference, Murkowski was asked whether he could support legislation pending in the Senate sponsored by Sen. Dianne Feinstein (D-CA) that includes cost-based rates for western energy markets. “Not unless there was the assurance … that it was at a rate or that there was a formula worked out to ensure that California would get new facilities,” the Alaska lawmaker said.

Murkowski said that California’s move to issue a sizable number of power plant permits is only one piece of a much larger puzzle to solving the state’s energy woes. “I’m telling you, having talked to the investment community, the people who finance utilities. They’re not going to come through with firm commitments, you’re going to have conditional commitments, until such time as they have a certainty of return on investment, and that means there has to be an adequate spread associated with any caps,” Murkowski said.

Another reporter asked Murkowski whether it was a fair statement to say that he’s not going to rule out price caps. “It’s a fair statement to say my bottom line is quite specific — to ensure that there’s new facilities built in California,” Murkowski responded. “If I get that assurance, I’m willing to work with anybody on any kind of a formula that achieves increased energy production in California,” he added.

Meanwhile, Murkowski gave no visible signs at the press conference that he is ready to give up on the idea of legislation that would open up the coastal plain region of the Arctic National Wildlife Refuge (ANWR) to drilling. Murkowski responded in the affirmative when asked by a reporter if he thinks he has enough votes to get ANWR-related legislation out of the Senate Energy and Natural Resources Committee.

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