- The Washington Times - Thursday, May 31, 2001

A solution to Californias energy crisis faces a deadlocked Congress and White House when Democrats take control of the Senate and demand wholesale price caps on electricity.
Republicans say price caps will exacerbate Californias energy woes, while Democrats say such measures are the only solution.
Sen. Jeff Bingaman, New Mexico Democrat, the incoming chairman of the Senate Energy and Natural Resources Committee, said he will move forward with a bill introduced by Democratic Sen. Dianne Feinstein of California to cap prices on wholesale electricity temporarily.
"I support that legislation. I hope we can pass that," Mr. Bingaman said on CNN Friday.
"If we are able to pass it, then I hope that we can persuade the House to do the same," Mr. Bingaman said, the day after Sen. James M. Jeffords of Vermont abandoned the Republican Party and declared himself an independent, handing control of the Senate to Democrats.
House Republicans were close to a deal with Democrats last week to mitigate key issues to increase supplies of electricity, but House Minority Leader Richard A. Gephardt, Missouri Democrat, nixed the deal, Republican aides said.
On another energy front, Mr. Gephardt yesterday called on President Bush to take "immediate steps" to curb rising gasoline prices and open the Strategic Petroleum Reserve.
"On June 5th, OPEC oil ministers are scheduled to meet to discuss whether to increase production of crude oil. I hope President Bush will call on [the Organization of the Petroleum Exporting Countries] to increase production of crude oil," Mr. Gephardt said.
Democratic calls for price caps "will be a hard sell for the most part," said Ken Johnson, spokesman for Rep. Billy Tauzin, Louisiana Republican and chairman of the Energy and Commerce Committee.
"Many Republicans believe that price caps, to a larger extent, created the problem in California, and we dont want to dig that hole any deeper," Mr. Johnson said.
Mr. Bush met with California Gov. Gray Davis Tuesday and was adamant in his opposition to price caps, which he said did not address the key issue of supply and demand.
"We will not take any action that makes Californias problem worse," Mr. Bush said.
Price caps would increase demand while decreasing supply, said Myron Ebell, energy analyst for the Competitive Enterprise Institute. "It will encourage consumers not to save and producers not to produce, and will lead to a summer and winter of dark, dreary lives in California. I wish them the best," Mr. Ebell said.
Price caps are a "feel-good solution" and the "absolute opposite of the right prescription" to Californias woes, said Susan Dudley, senior research fellow for the Mercatus Center at George Mason University. "Im baffled when I hear people say price controls, because it will only make [shortages] worse," Miss Dudley said.
Mrs. Feinsteins legislation would give the Federal Energy Regulatory Commission (FERC) 60 days to cap prices and would apply in 11 Western states. Mr. Davis is threatening to file a lawsuit against the FERC to force "just and reasonable" rates.
Mr. Davis said his state was "entitled to price relief" and blamed the Bush administration for the crisis.
"California is a mess and the governor is playing the blame game," said Tripp Baird, Senate liaison for the Heritage Foundation.


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