Federal Action on Energy Caps Expected

The Federal Energy Regulatory Commission meets today and is expected to take action on stricter caps on power prices in California and other Western states. The FERC now caps prices in California only during severe shortages.

State lawmakers and Western politicians want caps enforced 24 hours a day in 11 states as California enters the high-demand summer months, when peak power prices can soar a hundredfold or more.

Like current caps, the new limits would be based on the costs of operating the least-efficient power plant used on the day the electricity is sold.

Some industry executives say they are resigned to stricter caps, though they doubt the limits will function as planned.

FERC commissioners are scheduled to testify Tuesday before the Senate Governmental Affairs Committee, chaired by Connecticut Democrat Joseph I. Lieberman. California Gov. Gray Davis, who has been seeking price caps for months, will testify Wednesday.