- The Washington Times - Thursday, June 21, 2001

Energy Secretary Spencer Abraham thinks the Democrats have been getting away with murder by blaming the Bush administration for Californias electric power shortages.

This is a state whose energy needs have been held hostage by environmentalists and radical regulators who have blocked new power-plant construction; who imposed a pricing system that prevented long-term electric power contracts at the lowest price; and who put into place other regulations that stunted supply, discouraged conservation, and drove utilities into bankruptcy.

Now, caught in the mess of their own making, Gov. Gray Davis and state Democratic leaders, not to mention Democrats here in Washington, seem to have convinced a lot of voters that the Bush administration, which has been in office for less than five months, is to blame for all this. It is like Nero blaming the Christians for the burning of Rome.

The truth is that while Mr. Davis and state Democratic leaders have been hypocritically complaining about excessive prices and calling for price caps on the power industry, they have not moved to impose such restrictions on their own at the state level.

Mr. Davis and the Democrats have charged that the Bush administration has not lifted a finger to help solve the state´s energy problems. But it has been under Mr. Bush that rate rebates have been ordered to pay consumers back for utility overcharges, most of which occurred last year during the Clinton administration.

Mr. Davis has been demanding price caps, a mantra picked up by his party´s regulators here in Congress. But when he had the opportunity to impose such caps on his own, he did not do so. "It´s caused me to question how sincere the demands for price caps really are, because they have not taken action to put caps on the state´s utilities," Mr. Abraham told me in an interview.

"For all the complaining that the Democrats have been doing, I would note that most of these overcharges happened last year," he said. Where were the complaints then that the Clinton administration was doing nothing? Or that the Federal Energy Regulatory Commission had not acted? Mr. Davis and the Democrats were silent then.

"Under the Bush administration, FERC moved under the administration´s new chairman to rebate overcharges. But under the previous administration´s chairman, they did nothing to order refunds," Mr. Abraham points out.

"All during that time, FERC was under Democratic control. There were these alleged overcharges and gouging, and FERC did not act," he told me. "It was a Bush-appointed chairman who has acted."

"We´re the one´s who have acted on these problems. We´re the only ones who have brought about refunds," he added.

Still, no matter how demagogic the Democrats´ tactics have been, their charges of price-gouging and their call for price caps have had a political appeal. Internal polls show that the White House is losing the spin battle against the Democrats.

Meanwhile, House Republicans are growing increasingly nervous that their party is coming off as insensitive to the plight of California energy consumers. An effort by Democrats to add price controls to an appropriations bill last week was killed by GOP lawmakers, one of whom told his California colleagues, "You made your bed, now sleep in it."

Republican opposition to price caps was described by one Democrat as the GOP´s "let them eat cake" approach to the energy crunch.

With the White House growing uneasy that the Democrats are beating them in the energy war of words, the administration and a group of House Republicans are pushing for a plan by FERC to further limit California´s electricity prices. And last Friday, Mr. Abraham sent the first signal that the administration was willing to support further price controls. But he used some artful language to make it appear that Mr. Bush was not abandoning his opposition to price caps.

"This administration does not support prices that are unjust and unreasonable. We believe FERC should act," Mr. Abraham told me. But the administration remains opposed to any regulatory action that "would drive the price below market levels," he said.

Is FERC´s action aimed only at "unjust and unreasonable" prices? To the extent the new price controls are set by government regulation and not by the market, they are interfering with the laws of supply and demand. FERC is artificially limiting rates at a time when energy supplies have fallen below what is needed to meet demand. That´s a prescription for further shortages and higher price pressures.

Mr. Abraham and the administration are also moving to deregulate the national energy industry as fast as they can to unleash the power of the marketplace to boost supply, which will eventually bring prices down.

"We are moving to expedite the permit process so that new generation can be brought on line. We´re looking at a national electricity-grid evaluation to determine where we need more transmission, more interconnection," he said.

Over at the Interior Department, Secretary Gale Norton is looking at federal lands that can be opened up to oil and gas development.

But Mr. Abraham, working with only a handful of aides, has found it difficult to get his department´s top posts filled. That is slowing down policy implementation and making his job a lot harder.

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