WASHINGTON, DC�Democratic Sen. Dianne Feinstein of California said during hearings Thursday she will introduce legislation which would give the federal government power to set wholesale electricity rates in western states when prices are determined to be "unjust and unreasonable."
Her comments appear to set the stage for a regional face off in the increasingly bitter political struggle over control of electric power resources in the West.
"I think my state is being set up�and I include Washington state�to be an energy farm for California," said Gordon Smith (R-Ore).
Feinstein complained the Federal Energy Regulatory Commission (FERC) had not completed its duty to put a cap on wholesale rates, which FERC determined to be "unfair" during a fall investigation of high prices in California.
Speaking during confirmation hearings for former US Sen. Spencer Abraham (R-Mich.) to be Energy Secretary, Feinstein said she sincerely believes "there is a federal responsibility here.
"I will enter legislation that will give this secretary�who may not want it�the right to set these rates, if they are found to be unjust and unreasonable," Feinstein said of her proposal. "And they will be cost-based, so there can be a pass through."
She added the program will be voluntary, and if certain state governors wish to, they may opt out. As well, the rate cap would last "only until the state is able to bring additional power sources on line," Feinstein said.
Asked after today's hearing what she thought the prospects were for getting the legislation passed, Feinstein commented, "I think it's difficult. I would be hopeful that giving it [rate-setting power] to the secretary is something that the committee would look favorably on."
No comment
Abraham had no comment on the proposal, which came on the day California was suffering through its second day of rolling blackouts due to power shortages in the state. Questioned repeatedly about how Bush Administration will cope with the California crisis, Abraham limited himself to saying he and President-elect George W. Bush have discussed the issue and are paying close attention to unfolding developments.
"While I believe it would be premature for me to speculate today as to actions that the Bush Administration might or might not take, I want to assure all of you that we will work with California, members of this Congress, and other concerned parties, particularly those in the region, to address this urgent situation," Abraham said.
The secretary-designate said he and Bush believe national restructuring of the electric power industry is in the cards, although Abraham said it is not something the administration will rush into.
Other senators on the US Senate Energy and Natural Resources Committee were brutally frank about their assessment of the California situation.
Sen. Frank Murkowski (R-Alaska) told Abraham the federal government should stay out of the situation entirely.
"I would encourage you to recognize that before there are going to be meaningful corrections, the California consumer has to feel the hit, and that hasn't occurred yet," Murkowski said. "I would encourage you to keep the pressure on those responsible for it and not necessarily encourage Uncle Sam to step forward and bail out a situation that's going to take internal correction."
Both Oregon senators, Ron Wyden (D) and Smith, bitterly complained about the effect of California's difficulties on their state. Generators have been forced to sell power to California under an Energy Department emergency order, leaving many to wonder who will foot the bill. Two of California's investor-owned utilities are in a serious cash crunch.