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US Regulators Approve Power Price Restraints Across West
US federal energy regulators Monday approved a price "mitigation" plan to reduce wholesale electric prices in California and other Western states.
However, the Federal Energy Regulator Commission (FERC) plan falls short of imposing fixed price limits sought by California.
The plan, approved by a vote of 5-0, covers California and 10 other Western states. It will limit power prices based on a formula tied to the efficiency of power generation. It prohibits power suppliers from withholding power from the market to drive up market prices.
The FERC took the action after intense pressure from California Governor Gray Davis and Democrats newly in charge of the Senate.
Davis said that FERC "has finally taken a step in the right direction", but he urged the commission to do more in this regard.
FERC Chairman Curtis Hebert said the plan, effective through September 2002, will not only benefit consumers but also will " provide every incentive for suppliers to reduce costs."
Wholesale power prices have skyrocketed to more than 10 times what they were a year ago in California. The other states covered by the plan are Washington, Oregon, Montana, Idaho, Wyoming, Utah, Arizona, Nevada, New Mexico and Colorado.
Democratic lawmakers, who intend to make energy costs a key issue, have launched a series of hearings on the California power problems and called for price caps on electricity sales across the West.
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