Senator Fires Warning Shot on Power Costs

The new Democratic chairman of the Senate energy committee bluntly warned federal regulators Wednesday to act more aggressively to rein in electricity costs in coming weeks or prepare for Congress to intervene.

As Sen. Jeff Bingaman (D-N.M.) turned up the political pressure on the Federal Energy Regulatory Commission, House GOP leaders scuttled an emergency bill designed to help power-short California through a difficult summer. The measure became bogged down in partisan wrangling over price controls.

Bingaman’s comments were a sign of the sudden shift in energy politics in Washington after Vermont Sen. James M. Jeffords’ switch from Republican to independent and the Democrats taking control of the Senate.

In his first day as chairman of the Energy and Natural Resources Committee, Bingaman urged the Bush administration to “step up to its responsibility” to ensure that wholesale power rates charged in California are just and reasonable.

And new Senate Majority Leader Tom Daschle (D-S.D.) expressed similar sentiment in a letter to California Gov. Gray Davis.

“Unless FERC takes action,” Daschle wrote, “I believe that Congress will have to consider legislation to address the issue.”

Bingaman is co-sponsor of a bill introduced by Sens. Dianne Feinstein (D-Calif.) and Gordon Smith (R-Ore.) that would direct FERC to limit prices while ensuring that power suppliers recover their costs and still make a reasonable profit. The Bush administration has opposed price controls, contending they would discourage power plant construction.

The Feinstein bill appeared unlikely to come up for a vote in the Energy Committee under the former chairman, Sen. Frank Murkowski (R-Alaska). Feinstein said she hopes that if FERC doesn’t act within a few weeks, the committee will take up her bill. “We intend to keep the pressure up,” she said.

Even if such a measure were to pass the Senate, it would face stiff opposition in the GOP-controlled House of Representatives and probably a presidential veto. Nor is it clear to what extent Congress can dictate to FERC, an independent body, what actions to take. But with their newfound power, the Democrats believe they can, at minimum, increase political and public pressure on the regulators.

On broader energy policy, the Democratic control of the Senate has dashed GOP hopes for speedy approval of comprehensive energy legislation. Democrats complain that President Bush’s energy plan relies too heavily on coal, oil and nuclear power. They are expected to push for greater emphasis on conservation, energy efficiency and renewable energy such as wind and solar power.

Bingaman said that in the short term he hopes to boost energy assistance to low-income households, address gasoline price spikes--perhaps by revising the patchwork of regional fuel recipes--and reduce electricity prices in the West.

In a breakfast meeting with energy reporters, Bingaman expressed hope that two new FERC commissioners would act more aggressively in response to electricity prices, which have bankrupted California’s biggest private utility, Pacific Gas & Electric, and cost the state billions of dollars.

But he noted that there are limits to what Congress can do. “Once a law is on the books, and a federal agency is not enforcing it, then usually the remedy is in the courts,” he said. Davis has threatened to sue FERC.

FERC officials said they did not want to get into a war of words with Bingaman and would let the agency’s record speak for itself. “This agency is continuing to work extremely hard on the issues facing the country in regard to energy,” said Walter Ferguson, a top staffer for FERC Chairman Curtis L. Hebert Jr.

The commission actions “are our testament,” Ferguson added. “The interests of consumers are paramount, and we will act accordingly.”

In the House, GOP leaders declared dead a bill that would have provided some short-term help to California, such as federal aid to ease a notorious bottleneck in the state’s power grid and authority for the governor to ease emission rules to boost power supplies during an emergency.

Democrats suggested that the legislation was killed to save California Republicans from a politically difficult vote on price controls. Republicans contended that Democratic leaders were unwilling to compromise.

Rep. Joe Barton (R-Texas), the bill’s author, said the impasse made it unlikely that the legislation could pass Congress and clear the president’s desk in time to help California this summer.

Barton complained that his GOP colleagues felt like Charlie Brown about to kick the football only to have the Democrats, like Lucy, pull it away at the last minute.

But Rep. Henry A. Waxman (D-Los Angeles) asserted, “We were never close to a deal.”

“The Republicans say they cannot move forward on energy legislation because Democrats refuse to support any energy legislation that does not include wholesale price controls, and I say . . . right.” added Rep. Bob Filner (D-San Diego). “What good is a bill that does nothing for consumers?”

House Democrats vowed to continue to press for price controls. Some Republican leaders who have resisted price controls appeared to be softening their position, as long as it’s called something else.

Rep. W.J. “Billy” Tauzin (R-La.), chairman of the House Energy and Commerce Committee, said he was drafting a letter urging FERC to expand its “price mitigation” order that limits the price that power generators can charge.

The order now applies only when the state’s power supplies slip low enough to trigger an energy emergency. Rep. Doug Ose (R-Sacramento) has introduced legislation to expand the order to cover all times of day and the entire Western region.

Democrats contend the Republican proposal doesn’t go far enough. For example, the top price paid for power would still be set by the least efficient generator, providing bigger profits for newer, more efficient generators.

Davis said in a letter to lawmakers that the FERC order is a “faulty foundation on which to build relief for California. It is extremely limited in its scope and applicability and provides little, if any, real price relief for consumers and businesses in California.”

FERC rules prevent staffers from commenting on specific matters scheduled for commission action, such as any changes to the California price control plan. “That issue is pending and we are prohibited from commenting on it,” said Ferguson.

Democrats contend that as Californians begin receiving higher utility bills in the mail, the pressure will grow on Washington officials to clamp down more vigorously on wholesale electricity prices.

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Times staff writer Ricardo Alonso-Zaldivar contributed to this story.

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