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--> --> Smith joins Democrats on power price caps By Katherine Pfleger Associated Press Writer WASHINGTON - Sen. Gordon Smith broke with the Bush administration Tuesday to join Western Democrats in introducing legislation that would force federal energy regulators to impose price caps on the dysfunctional Western market. No other Senate Republican - or the White House - has joined with Smith , R-Ore., to push for legislation that would order the Federal Energy Regulatory Commission to institute temporary price caps on wholesale power. Instead, Smith found himself flanked by Western Democrats, including Sens. Patty Murray and Maria Cantwell of Washington. "It is a serious mistake for this government - and all of us - to defend a system ... that victimizes little folks in our society," said Smith, who authored the bill with Sen. Dianne Feinstein, D-Calif. The West is facing an energy crunch brought on by a botched deregulation effort in California, a lack of new generation capacity and a drought that is sapping the Northwest hydropower system, among other factors. President Bush warned Tuesday that California should expect more blackouts. Energy prices are soaring throughout the Northwest and are threatening to get even higher. Cantwell said the West makes up a third of the gross domestic product, and the energy issue is creating a crisis for the national economy. If the bill goes into effect, it would require FERC within 60 days to set wholesale price caps or reasonable rates that are based on the cost of producing power. The caps could cover up to 11 states in the Western power market. Critics of caps - including Vice President Dick Cheney, head of Bush's energy task force, and Energy Secretary Spencer Abraham - believe a free market can best handle the situation. They say price limits will discourage new generation capacity, one of the major problems in the West. "First they insisted on the federal government ordering Northwest utilities to import into California, and now they want to prohibit exports to us," Ron Eachus, chairman of the Oregon Public Utility Commission. "They're Balkanizing the Western market, and it could harm both California and the Northwest by inhibiting agreements based on the exchange of energy." But the bill's supporters say they've created a fix for that: the caps would not affect new energy facilities and would remain in effect until March 1, 2003, when the new energy sources are expected to be coming online. "We can impose a temporary control that does not discourage new energy production, that exempts new plants from the cap, and will pull us out of this crippling energy crisis," Murray said. Smith and others concede the legislation may not have much of a chance until after what could be a painful summer, complete with rolling blackouts and angry consumers. The bill has just six original co-sponsors, including Smith and Feinstein. Smith said he has been meeting with Cheney and the administration to encourage a change in their position on caps. Smith is also hoping to get some Northeast Republicans to go along with his proposal. "I really fear when I hear Dick Cheney and others talking in terms of brass-knuckles, free-market energy use," he said earlier in the day at the National Hydropower Association's annual meeting. "I won't help them with that." In California, utilities are going bankrupt in part because under the deregulation law the state's consumers are protected by caps from high retail prices. To remedy that, the bill says states that participate in the caps must allow their utilities to pass their costs onto ratepayers. The bill won't be popular at home for Feinstein. But "California must past costs on," she said. On the Net: Track the legislation: http://thomas.loc.gov/ Federal Energy Regulatory Commission: http://www.ferc.gov/ Bonneville Power Administration: http://www.bpa.gov/indexmain.shtml Email your... Technical questions & comments to: WebMaster Daily Tidings editorial comments & questions to: Editor Visit our other Oregon Newspapers... | Albany Democrat-Herald | Ashland Daily Tidings | Corvallis Gazette-Times | | Lebanon Express | Newport News-Times | Springfield News | Cottage Grove Sentinel | Ashland Daily Tidings 1661 Siskiyou Blvd. Ashland, OR 97520 Telephone 541-482-3456 © Copyright 2001 Lee Northwest Publishing