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THE CALIFORNIA ENERGY CRISIS

State Gets Little Sympathy at Hearing

Senate: Several Western senators blame California for the crisis at a session that offers few solutions.

February 01, 2001|RICHARD SIMON | TIMES STAFF WRITER

WASHINGTON — Underscoring the strong resistance California faces in seeking federal help for the state's electricity crisis, several Western senators said Wednesday during a Senate hearing that they have little sympathy for the state's predicament--even as they confront rising prices for power in their states.

"I'm suggesting to my consumers in Idaho that they send the bill to California," said Sen. Larry E. Craig (R-Idaho), who criticized the state for not constructing enough power plants and for drawing power from its neighbors.

"The brownouts in California could well be the brownouts of Idaho, Oregon and Washington next summer," he said. "I'm afraid that my consumers--and my voters--are not very sympathetic to California."

Sen. Gordon Smith (R-Ore.) succinctly described his feelings about the increasing power costs his constituents now face: "I think that stinks."

So it went on a day that seemed mostly devoted to venting anger, rather than finding solutions. The hearing--the first convened on Capitol Hill to explore California's energy crisis--brought together key players in the saga, including U.S. Sen. Dianne Feinstein (D-Calif.). She has introduced legislation that would impose a federal price cap on wholesale prices throughout the West.

Sensing the battle she faces in Congress over her proposal, Feinstein used the Energy and Natural Resources Committee hearing to exhort executives of the power generating companies who have been attacked as profiteers.

"Go back to your CEOs and ask them, 'Please don't price gouge. California is trying to work its way out of this situation. Give them an opportunity to do so.' "

Executives of the power suppliers denied manipulating the market.

The hearing came as Western governors gather today and Friday for an energy summit in Portland, Ore., with Energy Secretary Spencer Abraham. Next week, Senate Republican leaders are expected to introduce a 250-page national energy policy that calls for such measures as tax incentives to spur new oil production and nuclear energy development and oil drilling in the Arctic National Wildlife Refuge.

A number of the senators blamed California for bringing on electricity problems itself by making the state "one of the most difficult places on Earth to build a power plant," as one expert put it; passing a faulty deregulation law; and stubbornly refusing to raise electric rates.

"By not building their own power plants, Californians are putting upward pressure on prices by soaking up electricity from regions that have built their own plants," said Kit Konolige, a managing director at Morgan Stanley Dean Witter.

Sen. Ben Nighthorse Campbell (R-Colo.) said some of his colleagues might have to "hold our noses" to help the state. If the California economy goes into a downward spiral, "we're all going to be pulled into it," he said.

Stephen E. Frank, chairman, president and chief executive officer of Southern California Edison, said, "I know it's tempting to just say, 'California, you guys screwed it up, so you guys fix it.' " He joined Feinstein and Sen. Barbara Boxer (D-Calif.) in calling for caps on wholesale prices.

Many senators agreed with President Bush that the immediate solutions to California's problems lie in Sacramento, not Washington. Bush also has come out against price controls.

But Sen. Jeff Bingaman (D-N.M.) said, "The administration and this committee have an obligation, not just to California, but to the entire nation, to find a solution and to put it into effect before this crisis gets any worse."

Committee Chairman Frank H. Murkowski (R-Alaska) said U.S. taxpayers already have been put at risk because of a federal order directing out-of-state power suppliers to sell electricity to California's near-bankrupt utilities. The Bush administration extended the order to Feb. 7, but another extension is not expected.

"In the event that California cannot repay generators for this power," Murkowski said, "the federal government is going to have to meet that obligation."

Bingaman complained that Bush's "only solution" seems to be opening the Alaska National Wildlife Refuge to oil drilling. But, Bingaman said, less than 1% of California's electricity is generated by oil-fired plants. "All the oil in Alaska will not fix what is wrong with California's electricity market."

Feinstein said the California Public Utilities Commission "has to respond and allow the utilities to charge a reasonable rate of recovery," perhaps targeting consumers who exceed their "baseline" power allowance by more than 30%.

"Unless there is some action on this front, there will be little sympathy from other members of Congress to help California, especially those in the Northwest who are already seeing consumer rate surcharges of 50% or more," she said.

Critics of price caps say they will discourage companies from building new power plants.

Supporters of price caps say they can be structured in such a way as to ensure a reasonable profit for generating companies.

Murkowski seemed to sum up the attitudes of most of those gathered, no matter what their point of view.

"I fear the worst is yet to come," he said.

Times staff writer Mitchell Landsberg in Los Angeles contributed to this story.

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