WASHINGTON - Governmental Affairs Committee Chairman Joe
Lieberman, D-Conn., called on the Federal Energy Regulatory
Commission Wednesday to provide quick price relief to western
energy consumers, after hearing from a panel of blue ribbon
economists.
"FERC has already determined that energy rates in
California are neither just nor reasonable," Lieberman
said. "So, I would say to FERC: Provide real relief to the
people in the West this summer. Do it immediately and do it
decisively."
Lieberman called for 24-hour, seven-day-a-week relief
throughout the entire western region that has the actual effect
of reducing energy costs. "The Federal Power Act requires
electric rates to be just and reasonable everywhere, all the
time," said Lieberman. Currently, FERC is providing limited
price mitigation only when energy supplies fall to emergency
levels and only in California.
The committee will hold a second hearing June 20, 2001, to
discuss FERC’s response to the western energy crisis. All five
FERC commissioners are expected as witnesses.
In his first hearing as Committee Chairman, Lieberman heard
testimony from a panel of renowned economists who discussed the
effects of energy industry deregulation on consumer costs of
electricity and natural gas, primarily in the West.
The father of deregulation, Cornell University economics
professor emeritus Dr. Alfred Kahn, who played a leading role in
the deregulation of the airline, surface transportation and
telecommunications industries, agreed that temporary price
relief was necessary in order to respond to a dysfunctional
California market. In agreement were Dr. Severin Borenstein, of
the University of California, Dr. Paul Joskow of the
Massachusetts Institute of Technology, Dr. Frank Wolak of
Stanford University and Dr. William Hogan of Harvard.
In answer to complaints that price relief would hurt the
energy industry, Lieberman said: "Price mitigation can
preserve a healthy profit margin for energy producers while
bringing stability and predictability to the market.
"If we ignore these problems, we put our economy at risk
and leave our citizens unprotected. California
