House Committee Rejects Electricity Price Controls

In the first test of congressional sentiment on California’s power problems, a House panel on Thursday rebuffed an effort by Democratic lawmakers to legislate price caps on wholesale electricity.

The proposal, voted down 20 to 12 by the House energy and air quality subcommittee, would have required the Federal Energy Regulatory Commission to impose price controls keyed to the cost of generating power.

The Republican-controlled panel went on to approve a bill containing a number of less aggressive energy crisis measures, such as allowing California to relax environmental restrictions on power plants and extending daylight saving time to reduce evening electricity consumption.

But the vote on price controls, which split largely along party lines, was the most contentious issue addressed by the subcommittee. Although price cap advocates are expected to press their campaign at least twice more in the House, Thursday’s vote was a significant setback. It signaled that Congress is not inclined to rein in soaring energy prices, despite repeated pleas from Gov. Gray Davis and other state officials to do so.

Rep. Henry A. Waxman (D-Los Angeles), who offered the price control measure as an amendment to the energy bill, argued that it would protect consumers from price gouging while preserving “reasonable” profit margins for power suppliers.

Without price controls, he said, the bill “does not do for California what we need, and it does a lot of things for our state we don’t want.”

But the other three Californians on the subcommittee--all Republicans--disagreed, and voted against Waxman’s amendment, saying they believe price controls would exacerbate the problem by discouraging investment in new sources of energy.

“I recognize there’s tremendous political pressure on us, but do not believe it’s the right thing to do,” said Rep. Mary Bono (R-Palm Springs).

She was joined in voting against the measure by Reps. Christopher Cox (R-Newport Beach) and George P. Radanovich (R-Mariposa). The three California Republicans ensured the amendment’s defeat, because one Democrat who voted against the measure, Rep. Ralph M. Hall of Texas, said he would have supported it if all of the California members of the subcommittee had done so.

In Sacramento, Davis lashed out at Bono, Cox and Radanovich for opposing price caps.

“I find it very surprising that people here in California experiencing this crisis can go back to Washington and vote against the best interests of constituents of this state,” Davis said.

Waxman indicated he would attempt to revive the price cap amendment when the bill is taken up by the full House Energy and Commerce Committee.

A final test could come later this month, when the full House is expected to vote on the bill. Four California Republicans who are not on the energy committee have already signaled they would support a price control amendment.

Thursday’s vote was the first congressional action directed at California’s energy crisis, and underscored the extent to which the center of political debate on the issue is shifting from Sacramento to Washington.

Next week, the White House plans to unveil a comprehensive national energy strategy. The plan is expected to emphasize long-term solutions, ranging from new oil exploration in Alaska to construction of hundreds of new power plants and refineries.

With California experiencing rolling blackouts and gasoline prices surging nationwide, the White House has become increasingly sensitive to criticism that its plan won’t provide much immediate help.

At a news conference Thursday, White House spokesman Ari Fleischer stressed that “the president’s focus is going to be on doing everything he can for all terms: short-term, medium-term and long-term.”

House Republicans attending Thursday’s subcommittee session were careful to endorse the administration’s position that the federal government’s ability to help California in the short term is limited.

“We can’t make it rain. We can’t make it snow. We can’t make it cool in Palm Springs,” said Rep. Joe Barton (R-Texas), sponsor of the emergency bill and chairman of the subcommittee.

Still, he said, Congress can provide some assistance. Barton’s bill, which was approved 17 to 13 by the subcommittee, contains more than a dozen provisions designed to curb consumption and enhance power supplies.

Some of the key provisions would:

* Authorize California’s governor to waive some emission requirements on natural gas-fired power plants on “emergency” days of high demand. Democrats said Davis hasn’t sought such discretion, and the measure is unlikely to help because environmental regulations have not hindered power generation.

* Allow energy users to resell some of the electricity they are entitled to consume but don’t. Republicans said this would create a financial incentive to conserve, but Democrats said they fear it would undercut existing state programs that reward conservation.

* Allow some power suppliers to suspend contracts with financially strapped utilities. The measure is designed to enable companies that have cut off supplies for lack of payment to cut new deals with other utilities or users.

* Require federal facilities in states where electricity emergencies have been declared to curb their consumption by at least 20% compared with a year earlier.

* Permit California to extend daylight saving time beyond October.

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Times staff writers Edwin Chen in Washington and Dan Morain in Sacramento contributed to this story.