Power Shifts to Congress

Wholesale electricity prices soared with the temperature this week, jumping to eight times the peak of only three weeks ago. No one knows how high the price may go when high summer hits. Which makes it all the more intriguing that one of the big power-generating companies is now calling for temporary price caps, which the Bush administration stubbornly opposes.

Authority over wholesale power prices rests with the Federal Energy Regulatory Commission, which is charged by Congress with maintaining “just and reasonable” rates. But FERC refuses to impose what California desperately needs, a broad temporary price cap that allows companies to recover their costs plus a reasonable profit. The state’s last hope for rate caps now rests with Congress.

Sens. Dianne Feinstein (D-Calif.) and Gordon Smith (R-Ore.) are sponsoring legislation that would require FERC to establish temporary maximum rates. Rep. Henry Waxman (D-L.A.) is scheduled to propose amendments to a House bill today to do the same. The support of three Republican House members from California, who are on the energy and air quality subcommittee, is crucial. They are Christopher Cox of Newport Beach, Mary Bono of Palm Springs and George Radanovich of Mariposa. The Waxman measure serves the best interests of California. Concern about losing seats in Congress may also help the GOP members make the right choice.

It was Feinstein who got a letter from Keith E. Bailey, chairman of Williams Cos., an energy producer, in support of temporary price controls. Perhaps some generators are tired of being labeled gougers, pirates and bloodsuckers, and they will settle for a reasonable profit through the rest of this crisis. But price caps would have to apply to all the producers. Congress must act, starting today with the subcommittee vote on the Waxman measure.