By the OGJ Online Staff
HOUSTON, May 10 -- A US House subcommittee Thursday approved an energy bill Republican supporters said would improve California's electricity markets without capping wholesale electricity prices in the western region.
Rep. Joe Barton (R-Tex), chairman of the Subcommittee on Energy and Air Quality, said the legislation would help prevent power outages. At the start of the debate, Barton observed the federal government cannot stop blackouts nor will the legislation stop them, but he said the bill could reduce their number and duration.
The bill next goes to the full House Energy and Commerce Committee, which will decide whether to approve it and take it to the full House for a vote.
As expected Rep. Henry Waxman (D-Calif.) attempted to amend the bill capping wholesale prices in western markets for 18 months, a measure sought by California utilities and state lawmakers, including some outside California.
In support of the amendment, Waxman said California's peak demand was actually higher 2 years ago in 1999, when prices for wholesale electricity were running about $30/Mw-hr. Today, wholesale prices are running about $300/Mw-hr.
The panel rejected the price cap amendment 20-12 vote, mostly along party lines. The Bush administration and Republicans on the subcommittee have adamantly opposed price controls.
The legislation would force the federal government to cut energy use at its California facilities 20%, twice as much as recently ordered by the Bush administration. An extra $100 million was included to help poor families pay their energy bills.
The bill did not include a controversial environmental provision from earlier versions. During hearings on the bill, Democrats said a provision allowing transmission lines to be built on federal lands, including national parks, would have allowed power lines to be constructed around national monuments in the nation's capital.
But it allows the governor to waive some clean air regulations to get more power plants on line during peak demand. The bill would also allow the state to waive certain air emission requirements for natural gas-fired power plants during extreme emergencies.
The draft Barton submitted Wednesday includes a provision to establish a west-wide so-called "negawatts" market that would allow consumers to resell to a third party electricity they would otherwise be entitled to use. Other changes to early drafts deleted sections on hydropower. Witnesses said they already had most of the authority proposed in the draft.
A section that would require payment guarantees for emergency power sales ordered by the government now includes caveats. If there is disagreement about price between buyer and seller, then gas prices will be determined by the President and electricity prices by FERC or the secretary of energy.
The Western Power Administration would be authorized to spend $220 million to expand its transmission system and relieve congestion on Path 15, the lines carrying power between northern and southern California. The legislation now calls for such proposals to continue to be subject to applicable state siting rules.
