Bush Names Free-Market Advocate as Chairman of Energy Commission

California’s hopes of winning federal help with its electricity crisis suffered a setback Monday when President Bush announced he will nominate free-market advocate Curt L. Hebert Jr. to head the Washington agency that oversees wholesale electrical markets.

News of Hebert’s appointment to the chairmanship of the Federal Energy Regulatory Commission came as the new administration’s top economic officials met at the White House to discuss, but not intervene in, the crisis.

Hebert, a former Mississippi state legislator and the sole Republican on the five-member panel, has adamantly opposed the kind of price controls sought by Gov. Gray Davis and other California officials. He made it clear Monday that he has no intention of changing his position.

“These are challenging times . . . as the bulk power markets . . . more fully embrace the tenets of the free-market system,” he said in a press release. “I believe this system is part of the solution rather than part of the problem for the malfunctioning markets on the West Coast.

“I will do my utmost to see that competition is encouraged,” he said.

In interviews last week, Bush also opposed price controls--in the form of FERC-imposed caps on wholesale power costs--and expressed similar faith in free markets. Davis and executives of the state’s cash-starved utilities have petitioned the federal agency to intervene, charging that the state’s power suppliers are price gouging.

“The president continues to believe that the issue is mostly a California matter,” Bush spokesman Ari Fleischer told reporters Monday.

Hebert, a close friend of Senate Majority Leader Trent Lott (R-Miss.), has argued repeatedly in recent weeks against federal intervention in the California crisis. Although he went along last month when the Democratic-dominated commission approved modest steps to help the state, he issued a forceful statement, saying the state should fix the problem and pay its bills.

“There should be some commitment by . . . California to stop the financial bleeding of its utilities and to ensure that . . . the [overdue bills] of those providing energy . . . will not increase further,” he said in a statement.

Hebert replaces Democrat William Massey, who was elevated to the chairmanship by President Clinton last week after the abrupt resignation of James J. Hoecker, also a Clinton appointee. Hebert has been a member of the panel since November 1997.

Hoecker’s resignation gives Bush two vacancies on the five-member panel, which, though little-known outside the energy industry, wields immense power over the electricity and natural gas markets and has led the charge to deregulate both.

Hebert, like Lott, comes from Pascagoula, Miss. As a state lawmaker, he chaired the House Oil and Gas Committee. He was also chairman of Mississippi’s Public Utilities Commission from 1994 to 1996. He has a bachelor of science degree from the University of Southern Mississippi, and a law degree from Mississippi College.