Price Caps Would Worsen Shortage, U.S. Official Says

Energy Secretary Spencer Abraham on Sunday reiterated the Bush administration’s staunch opposition to using price controls to rein in skyrocketing electricity prices in California and elsewhere.

Asked on ABC’s “This Week” about New York Mayor Rudolph W. Giuliani’s request last week for regulatory controls in advance of summer power demands, Abraham said the administration preferred to look for ways to increase supply or decrease demand.

“Our view is that price caps on energy create shortages. They created the gas lines of the 1970s. If we did them in California, for instance, where this call has gone out, we’d have more blackouts this summer, they’d last longer, and they’d go on into the future,” he said.

Abraham said the White House had responded to “virtually every single request” made by California Gov. Gray Davis.

“We’re doing the most that we can, but as I’ve said, we don’t have a generator in the basement of the Department of Energy where I can automatically send electricity, whether it’s to California or another part of the country,” he said.

On CNN’s “Late Edition,” Abraham cautioned that the margins between supply and demand are close in other areas of the country as well, including New York City. Still, he said he believed New York would be able to bring enough new electricity supplies on line to prevent the rolling blackouts predicted for California.

“But the long-term problems we have are reflected in California,” Abraham said. “If you don’t increase supply as demand keeps going up, then you confront the problems California’s got today, which is why we’re putting together a national energy policy. It hasn’t been in place for a long time.”