Today the Bay Area Congressional Delegation and House Democratic Leader Richard Gephardt (D-MO) will host hearings in the Bay Area on the California energy crisis. Panelists will include local residents discussing how rising energy costs are affecting their lives and local experts discussing issues critical to a sound national energy policy.
We are pleased to welcome House Democratic Leader Richard Gephardt to the Bay Area to focus on the energy shortage in our state. His recent visit to San Diego gave hope to the people there. Under his leadership, a consensus has emerged among Members of Congress in the West about what needs to be done. We have introduced the Energy Price and Economic Stability Act (H.R. 1468) which requires the Federal Energy Regulatory Commission (FERC) to establish cost-of-service rates for electricity sold at wholesale prices in Western states. This legislation would provide immediate relief from the soaring wholesale electricity rates.
Since the Republican Leadership in Congress has resisted action to address the energy shortage, we sent a letter to President Bush last Friday calling on him to use his exclusive authority to require FERC to stop electricity price gouging, prevent arbitrary withholding of power by generators to create artificial scarcity and provide price relief to Western states. Under the Federal Power Act, California and other Western states do not have authority over wholesale rates.
The energy companies have learned how to take advantage of California’s flawed electricity markets and they are withholding power to reduce supply and drive up prices. The more energy they withhold, the more money they can make. If the price of a gallon of milk increased at the same rate as California’s wholesale electricity prices, a gallon of milk would increase from $3 to $190.
The Bush Administration has put forward an energy plan that focuses on drilling in sensitive ecosystems and cuts critical renewable energy and energy efficiency investments. We must invest in finding ways to increase energy production and to use fossil fuels and energy technologies in the most environmentally responsible manner. The people of California understand that we can preserve the environment while increasing energy production at the same time. The Administration has failed to see the connection between the energy crisis and the health of the economy. Indeed, their policies will tank the economy.
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