Daschle lends support to California power price caps


By the OGJ Online Staff

HOUSTON, June 6--Energy politics continued to heat up Wednesday. New US Senate Majority Leader Tom Daschle (D-SD) indicated he would support federal legislation that would order federal regulators to impose "just and reasonable" wholesale electricity prices in California.

Meanwhile, at the last minute House Energy and Commerce Committee Chairman Billy Tauzin (R-La) canceled that panel's planned Wednesday markup of H.R. 1647, the Electricity Emergency Relief Act.

Daschle wrote a letter to California Gov. Gray Davis correcting a published press report which claimed he had 'all but ruled out' federal price controls for wholesale electricity in California.

"This report does not accurately reflect my position on this important issue," Daschle said. The majority leader said he expects FERC to meet its obligation under current law to ensure just and reasonable prices for wholesale electricity prevail in California.

Sen. Trent Lott (R-Miss.), who lost his position as majority leader in the turn over of the senate, supported the Bush administration's opposition to price caps in the wholesale electricity market. Now that control of the senate has shifted to the Democrats, passage of legislation to hold down electricity prices in California becomes more likely. Passage of price cap legislation is more doubtful in the Republican controlled House.

"FERC has failed to meet this responsibility despite finding last fall that prices are not 'just and reasonable'," Daschle said. "Unless FERC takes action, I believe that Congress will have to consider legislation to address this issue."

Sens. Dianne Feinstein (D-Calif.) and Gordon Smith (R-Ore.) have authored legislation that would direct FERC to impose just and reasonable prices, a term used in the Federal Power Act. Daschle said unless FERC acts soon to carry out its responsibility, legislation will be taken up to direct FERC to take action.

"I will support legislation introduced by Sens. Feinstein and Smith to direct FERC to impose just and reasonable prices on wholesale electricity sales in California," Daschle said.

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