- The Washington Times - Tuesday, June 19, 2001

President Bush appears poised to go wobbly on electricity price caps in California. In an interview with this newspapers Don Lambro last week, Energy Secretary Spencer Abraham said the administration would support federal actions to reduce "unjust and unreasonable" electricity prices in California. "We believe that the FERC (Federal Energy Regulatory Commission) should act," he said. It supports FERCs decision yesterday to expand the electricity price limits in California to 10 other western states through late 2002.
This turns Mr. Abrahams previous statements on their head not to mention every policy statement on the energy crisis made until last week by administration officials. In March, he told the U.S. Chamber of Commerce, "Let me be clear: The Bush Administration does not support price controls. Price controls on electricity will lead to more blackouts. Price controls will deepen Americas energy crisis, because they wont reduce demand, but they will cripple incentives for desperately needed new investments in energy supply." Vice President Dick Cheney apparently felt the same way until recently. In a May interview on Meet the Press, Vice President Dick Cheney told Tim Russert, "In 4,000 years of recorded history, price controls have never worked. They will not work now in California or anywhere else."
Not that this was ever clear to Californias Democratic leaders, who still seem to be whirling about in a fantasy world. California Senate Republican leader Jim Brulte recently noted that, even as blackouts have been rolling across the state, workers at various state agencies, including the Energy Commission and the Department of Water Resources, have been entertained by $15,000 worth of poetry readings. This is not to mention the $30,000 in taxpayer money that Gov. Gray Davis is spending each month to retain the services of Gore operatives Chris Lehane and Mark Fabiani.
The spin out of California is clearly working and seems to be the reason that many Republicans are suddenly so wound up. Many fear large electoral losses if action is not taken. House Majority Whip Tom Delay is one of the few on Capitol Hill who has kept his bearings. In a letter to Curt Hebert Jr., Chairman of FERC, Mr. Delay wrote that while we all would like to see Californias problems solved, "Price caps are not a solution to the electricity supply problem in California; they are an invitation to a radically dysfunctional electricity market and economic chaos. In fact, there is a very real risk that the imposition of price caps will actually exacerbate and perpetuate the existing supply problem."
The administration would do well to stay its previous course and overturn FERCs topsy-turvy ruling.

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