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American Morning

FERC Intervenes in Western Energy Crunch

Aired June 19, 2001 - 11:20   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: On Capitol Hill, the topic today is energy and how much you -- especially you in the West -- should be paying on those power bills.

For more on that, let's check in with Jeanne Meserve -- hi, Jeanne.

JEANNE MESERVE, CNN CORRESPONDENT: Hi, Daryn.

Federal energy regulators today are spelling out the details of the new price-ceiling plan. The goal is to help consumers in California and 10 other Western states cope with skyrocketing energy prices. Federal Energy Regulatory Commission Chairman Curt Hebert tried to reassure the Senate that this action plan is on the right track.

(BEGIN VIDEO CLIP)

CURT HEBERT, CHAIRMAN, FERC: We've issued orders removing impediments, removing obstacles. We're doing things faster than they've ever done before to help California in the West. We've got gas prices coming down. We are moving towards transparency with gas prices. We're seeking comments on that. We're seeking comments on the caps themselves, on the capacity release. And now we have price mitigation not only for California, but also for the West.

(END VIDEO CLIP)

MESERVE: You saw California Senator Dianne Feinstein listening intently to the testimony today.

CNN's Kate Snow is on Capitol Hill.

Kate, what did Senator Feinstein have to say?

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: A big shift from leading Democrats, including Senator Feinstein today: What they are saying, basically, Jeanne, is that they welcome the decision by the FERC, by the Federal Energy Regulatory Commission, Senator Feinstein saying that she doesn't think that her bill that she had, her legislation that would call for price caps, is really needed at this point.

She withdrew that legislation this morning. She's saying they're going to wait and see how things play out, whether this FERC decision ultimately will mean that they don't need to legislate price controls -- Jeanne.

MESERVE: And, Kate, hearing a different sort of approach to this problem from the Democrats today?

SNOW: That's right. They are moving on now, saying that they maybe don't need to legislate price caps, but they do think that they need to take action and that FERC needs to take action in terms of getting people rebates for exorbitant prices that they've paid on energy.

This is an idea of getting refunds mailed to many people out in California and in the West -- Senator Boxer saying she has got a bill that would force FERC to do that.

MESERVE: And what about Republican reaction to yesterday's FERC action?

SNOW: There's a bit of a split, Jeanne, when it comes to Republicans: many Republicans embracing the decision, saying it is the right way; it's a middle ground, the right approach to do this price mitigation; but other Republicans, the more conservative members, saying that they worry about any time there is a mention of the word "price caps." They worry about intervention in the market.

And also, we should point out, Republicans saying that Democrats are simply trying to extend the debate here, that they're playing this up for all it's worth. They say that a lot of what the Democrats are doing on the subject of energy is just meant to win political points -- Jeanne, back to you.

MESERVE: Kate Snow up on Capitol Hill, thanks so much.

And, Daryn and Leon, we haven't heard the last of this -- the Senate Governmental Affairs Committee holding hearings tomorrow -- the star witness: California's governor, Gray Davis -- back to you.

HARRIS: All right, good deal. Thanks, Jeanne. We'll see you soon.

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