Subject: Latest on Legislation Addressing Western Wholesale Markets
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Date: Thu, 24 May 2001 20:01:54 -0700 (PDT)

Traders et al:

We learned at the hearing today that one bill mark-up being considered would not cap prices but  would require participants to forward contract for a significabnt portion of both load and resources.  If I learn more about this requirement, I will forward it on.

Also, the regional demand exchange seems to have legs in the current legislation.  

Alan Comnes

US Lawmakers Postpone Calif Power Relief Vote To Fri    
Updated: Thursday, May 24, 2001 05:27 PM ET     
  
WASHINGTON (Dow Jones)--The House Energy and Commerce Committee postponed until Friday a vote on legislation to relieve power shortages on the West Coast after working through Thursday on a compromise. 

The energy committee is deeply divided between free-market stalwarts, who argue temporary controls on California's wholesale electricity and natural gas prices will distort the market, and others who say price controls are needed to stop market manipulation and prevent a regional economic disaster. 

Earlier Thursday, Committee Chairman Billy Tauzin, R-La., said talks between the two sides were "bearing fruit" and the committee scheduled to reconvene in the afternoon to vote on a bill addressing power problems in California and neighboring states. 

But the afternoon meeting was postponed twice as negotiations dragged on, and it was finally delayed until Friday morning. 

If the House were to approve temporary regional wholesale power price controls, the issue could reach a critical turning point. 

With Vermont Sen. James Jeffords' defection from the Republican party Thursday, Sen. Jeff Bingaman, D-N.M., is due to take over chairmanship of the Senate Energy and Natural Resources Committee. Bingaman has proposed price controls for both Western states' wholesale power market and California's natural gas market. 

However, President Bush, an opponent of price controls, still wields veto power. 

The House energy committee's ranking Democrat, John Dingell, D-Mich., said Rep. Joe Barton's, R-Texas, Electricity Emergency Relief Act - the bill currently before the panel - doesn't live up to its name because it doesn't direct the Federal Energy Regulatory Commission to impose wholesale power price controls. 

FERC Commissioner William Massey has proposed temporary price caps based on cost plus a reasonable profit, but he has so far been overruled by the rest of the FERC board. 

Some House panel members are also calling for stricter regulation of natural gas pipelines supplying California in light of the sharp spike in the state's gas prices and its effect on power generation costs. 

As it stood Thursday, Barton's bill, HR 1647, would include: 

- $220 million in funding to alleviate power transmission constraints on central California's "Path 15" system; 

- provisions to guarantee payment to small power producers threatened by electric utilities unable to pay them; 

- creation of a competitive market for power conservation; 

- and $100 million in new funding to help the region's low-income households pay electric and fuel bills. 

-By Campion Walsh, Dow Jones Newswires; 202-862-9291; [email-masked]