On the same day that he was handed the reins of the Senate Energy and Natural Resources Committee, Senator Jeff Bingaman (D-NM) said that bipartisan legislation directing FERC to set cost-based rates to ensure just and reasonable wholesale energy prices in California could get consideration from the panel within the next couple of weeks. Separately, newly-minted Senate Majority Leader Tom Daschle (D-SD) made it clear earlier this week that he stands ready to support such legislation if FERC falls short of meeting its just and reasonable obligations.

Appearing before a Washington, D.C., press briefing sponsored by the Energy Daily and the United States Energy Association yesterday, Bingaman detailed what issues he thinks the energy panel can successfully address in the short term. As he has stated previously, Bingaman mentioned adequate funding for the low-income home energy assistance program and, separately, “enormously high” wholesale energy prices in California (see Daily GPI, May 29). “Again, it’s been my position from the beginning that the Federal Power Act requires the Federal Energy Regulatory Commission to ensure that rates are just and reasonable and … their last determination on this was in December that rates are not just and reasonable,” Bingaman said. He said that FERC “needs to take some action” as it relates wholesale energy prices in California.

He expressed optimism that the seating of two new commissioners at FERC — Pat Wood III and Nora Brownell — may make a difference in terms of how the Commission deals with this issue. “I’ve great hopes that they will concentrate on this issue and move the FERC to deal with it responsibly,” he said. In the meantime, Bingaman pointed out that Sens. Dianne Feinstein (D-CA) and Gordon Smith (R-OR) are “anxious” for the energy panel to move forward with legislation they have sponsored that would reinforce FERC’s responsibility related to maintaining just and reasonable energy prices.

Bingaman yesterday emphasized the point that the bill would not legislatively set a price cap, but would instead direct FERC to set a cost-based rate of some sort that would meet the just and reasonable requirement. “So that’s another issue that I think is clearly a strong candidate for action by our committee here in the next few weeks,” Bingaman said. “I would expect we’ll have a few hearings in the next couple of weeks before we actually conclude a final list of what we might move on quickly that are of an immediate nature,” he added. “We’re going to look at whether or not the sentiment is there to go ahead with that legislation and whether we think, under the circumstances that we’re presented with a couple of weeks down the road, whether that will be a constructive act to take,” Bingaman said.

Meanwhile, Daschle in separate letters to California Gov. Gray Davis and Feinstein sought to clarify his position related to runaway wholesale electricity prices seen in California. In the June 5 letters, Daschle refuted a recent Los Angeles Times report that he has “all but ruled out passage of federal price controls” for wholesale electricity sold in California. “This report does not accurately reflect my position on this important issue,” Daschle wrote.

Echoing Bingaman’s comments, Daschle emphasized the point that FERC must meet its obligation under current law to ensure just and reasonable prices for wholesale electricity in California. But the new Senate majority leader argued that FERC has failed to meet this responsibility, despite finding last fall that prices were not just and reasonable. “Unless FERC takes action, I believe that Congress will have to consider legislation to address this issue,” Daschle wrote. While Daschle noted that he does not believe Congress can or should establish a dollar amount for the price of electricity in California, he did voice support for the Feinstein-Smith legislation. “Unless FERC acts soon, your legislation should be taken up and passed to direct FERC to take action,” Daschle wrote in his letter to Feinstein. “I will support all necessary efforts to meet that goal,” he added.

Sen. Frank Murkowski (R-AK), the outgoing Senate Energy and Natural Resources Committee chairman, earlier this week seemed to exhibit some flexibility as it relates to putting caps on wholesale electricity prices in California. But Murkowski, in a Capitol Hill news conference, made it clear that such flexibility would be predicated on the guarantee of additional generation being added in the state (see Daily GPI, June 6).

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