Ideas floated in Congress to ease California power crisis

By Kate Thomas
OGJ Online

HOUSTON, Mar. 23�After 2 days of hearings on the California power crisis, Rep. Joe Barton (R-Tex.) is scheduled to meet with the White House staff over the weekend to determine whether emergency legislation will contribute to a solution.

Meanwhile, congressional sources said a laundry list of possibilities was submitted after Tuesday and Thursday's hearings by the US House Subcommittee on Energy and Air Quality chaired by Barton. A committee aide denied any decisions have been made on what to include in an emergency package.

If a decision is made to move forward on legislation, he said it will take at least 2 weeks to assemble a bill that will attract bipartisan support. At the conclusion of Tuesday's hearings, Barton emphasized speed is of the essence to make a difference this summer.

Most experts now believe blackouts are all but inevitable in California and possibly in other parts of the West. But proposals to help, especially on the key question of whether to impose a price cap on wholesale electricity transactions, broke down along party lines. Most Democrats advocated a cap, while Federal Energy Regulatory Chairman Curtis Hebert and Energy Sec. Spencer Abraham have opposed a price cap. No mention of a price cap is among the proposals said to be under consideration.

Some of the ideas would appear to provoke little controversy. Others, such as making Indian lands available for electric generation, would almost certainly lead to a court challenge.

The proposals include directing the Federal Energy Management Agency to prepare for blackouts by setting up an office in California, conducting an education campaign preparing for blackouts, and having an emergency plan ready to provide assistance during blackouts.

The list also includes a proposal for federal assistance to expand PATH 15�the south-to-north constraint on power shipments�as quickly as possible. The California grid operator has frequently blamed its inability to move power north as contributing to shortages in northern California. Among the ideas floated is to direct the Western Area Power Administration to take responsibility for the Path 15 expansion and authorize federal payment for all or part of the project.

Require Section 206 hearing
Several of the proposals involve the Federal Energy Regulatory Commission. The most controversial would require FERC to initiate a proceeding under Federal Power Act Section 206 to determine if wholesale electricity prices in the West are unjust and unreasonable or unduly preferential or discriminatory.

Another would direct FERC to establish an interconnection standard for distributed generation that would allow small generators to connect and ship power over the grid. Many utilities have thrown up roadblocks to setting technical standards for connecting to the grid.

The proposals would direct FERC to issue an order allowing so-called Qualifying Facilities (QF) or small generators to sell electricity to third parties. In California, many QFs which are under contract to sell power directly to utilities, have not been paid in 3 months. Some have shut down.

Other proposals said to be under consideration, include:

� Authorize additional emergency funds for low income families.

� Allow states to adjust Daylight Savings Time.

� Direct federal facilities to reduce energy demand by 10% compared to the previous calendar year.

The following assistance would be granted only upon the declaration by a governor of an electricity emergency, for a period no longer than 2 years. Each item of assistance would granted upon a specific request by the governor of the affected state:

� Direct federal facilities with backup generators to operate those generators.

� Direct US Department of Defense to run portable generators.

� Direct Defense Department to explore connecting Navy nuclear ship generators to the electric grid.

� Direct Bonneville Power Administration to maximize generation at hydroelectric facilities (upon request by the governors in the Pacific Northwest).

� Make federal lands and Indian lands available for siting new generation plants.

� Direct Bureau of Reclamation to delay implementation of the Trinity River restoration plan in California for 1 year.

� Direct the Environmental Protection Agency to establish a nitrogen oxide (NO_x) emissions credit bank for power plants.

� Direct EPA to waive NO_x allowance requirements.

� Allow restart of mothballed nonnuclear power plants.

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