March 15, 2001
12:00 AM
WASHINGTON, DC. - “Power shortages and price spikes are symptoms of deeper problems – inadequate generation and transmission. I am not convinced that the legislation before us will solve California’s supply problems. In fact, I am concerned that they may make them worse,” said Chairman Frank H. Murkowski today during a hearing on legislation that would impose price controls on wholesale power sold in Western states. Murkowski noted that price controls imposed in the 1970s on oil and gas did not work, and that price controls on electricity will not solve California’s supply problems. “By imposing price controls on wholesale power, construction of new generation could be discouraged.” Murkowski said. The Chairman pointed out that California is last in the Nation in terms of electric generation per person, and has very low monthly electric bills. Consumers in 37 other states have higher bills, including California’s neighbor, Oregon. “So what is the solution? On the supply side, California must get over its aversion to new powerplants and transmission lines. On the demand side, California must get over its unwillingness to pass through wholesale costs. There is no question that California faces serious problems, but we must find meaningful solutions – not band-aid patches that just create new problems.” “California faces its first real test in addressing the problem of providing more power generation. The startup of an existing 450 megawatt gas-fired power-plant fo this summer is already encountering severe local opposition. If that power-plant is prevented from going on line, I wonder if anything can save California,” Murkowski said. “This reminds me of poll reported in a February 11th story in the Washington Post that found two out of three people in California would rather have the lights go out than have any price increase. Well if they continue to oppose power-plants and transmission lines, they may just get their wish.” ###