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California lawmakers seeking energy price caps from Congress

January 24, 2001|By ERIKA BUCK, Special to this newspaper

WASHINGTON (MNS) — California legislators' proposals for price caps on wholesale energy costs may face strong opposition in Congress, experts said Tuesday.

Rep. Duncan Hunter and a bipartisan group of lawmakers including Sen. Dianne Feinstein introduced legislation Saturday that would give the secretary of energy authority to impose price caps on wholesale energy at times when ‘‘unjust and unreasonable'' rates are being charged.

‘‘This legislation serves as a safeguard for Californians suffering through this crisis by providing the secretary of energy with the authority and mandate to stabilize our electricity market,'' Hunter said.

Sen. Barbara Boxer reintroduced a bill Tuesday that would compel the Federal Energy Regulatory Commission to exercise its authority to impose price caps across the Western region.

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‘‘A lot of people in Congress don't like price caps, and I think they will have difficulty moving them through,'' said Bill Frenzel, a former Republican congressman who is a scholar at the Brookings Institution.

The proposed price caps are intended to stabilize the skyrocketing wholesale costs facing California's deregulated utilities.

Price caps may solve California's energy crisis in the short term, said Pietro Nivola, an energy expert at the Brookings Institution, but may have unintended consequences.

‘‘We've had experience in the past where price controls start out as emergencies and then last for 20 years,'' he said. ‘‘It becomes difficult to take these caps off. You never know when to do it. I think that's the kind of thing that would make the new administration very nervous.''

Congress often requires months to pass legislation, and the lawmakers are not scheduled to take up regular business until the end of the month.

‘‘The crisis may have faded by the time they're able to move it,'' said Frenzel. ‘‘I do know it's going to take awhile for the federal government to get cranked up. It's going to take time, and California doesn't have a lot of time.''

The legislation is part of a larger effort from Hunter and other lawmakers to address the crisis that has inflated energy bills for San Diego utility customers and brought two of the state's largest utilities to the edge of bankruptcy.

Hunter and several other California lawmakers sent a letter to Spencer Abraham, the new energy secretary, outlining possible solutions to the crisis.

‘‘What we're trying to do is garner support,'' said a spokesman for Hunter. ‘‘To get California out of this mess or to provide relief to rate payers is going to take efforts at every level.''

Hunter co-sponsored the bill with a bipartisan group of California lawmakers, including San Diego area Republican congressmen Duke Cunningham and Darrell Issa and Democratic House members from California Barbara Lee, Anna Eshee and Lois Capps. Feinstein introduced a similar bill in the Senate.

On Tuesday afternoon the White House extended for two weeks a Clinton administration emergency order requiring power and natural gas companies to supply the state with energy.

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