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CNN Saturday Morning News
How Can California Solve Energy Crisis?
Aired May 05, 2001 - 08:17 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.
MILES O'BRIEN, CNN ANCHOR: The California power crisis not getting any better. The state preparing for rolling blackouts this summer amid that soaring energy crisis. State officials are split over how to solve the crunch.
For more on this, we turn to two California House members with some opposing views. Representative George Radanovich is live from Washington. He's a member of the House Energy and Commerce Committee. And live from Palo Alto, where it is awfully early in the morning, California Representative Anna Eshoo. She is also an Energy and Commerce Committee member and Ms. Eshoo, in particular, thank you for joining us at this wee hour. We appreciate it.
REP. ANNA ESHOO (D), CALIFORNIA: Thank you.
O'BRIEN: And I'll begin with you. The federal government, as you know, has the power to cap off the cost to consumers for power. That is not currently a part of the Band-Aid legislation which is going around Capitol Hill and the Republicans will tell you that the free market is the thing that should dictate all of this. After all, there's supply and demand. How do you respond to that?
ESHOO: Well, many of us are calling for cost of service based rates. That would allow California a time out because we are being gouged. On the issue of the markets, I don't have to carry anyone's briefcase on this. I'm a free market person, a free trader. But the fact of the matter is if we had a market in California, there would be competition. We don't have a market. We have a dysfunctional system. It's not only in California, it's in the western markets.
And that's why not only myself and many Democrats, but also Republicans, as recently as Thursday, Elton Gallegly from southern California called on the vice president, the chairman of the FERC commission and Spencer Abraham, the secretary of energy, to put into place cost of service based rates -- that means the cost of the service plus a reasonable profit -- so that we can help move beyond where we are now.
That would help the western region enormously. The administration and the Federal Energy Regulatory Commission have refused to do that so far. But I do think that we are starting to make some headway on it. But we also need generation and we need conservation. So those are the two things where we need to move forward in the state. But the cost of service based rates plus a reasonable profit, that can only be put into place at the federal level and that's where I focus my attention.
O'BRIEN: Mr. Radanovich, the way she puts it, it sounds fairly reasonable. It is a crisis and I'm sure many of your constituents would like the idea of having those costs capped somehow. How do you respond to that?
REP. GEORGE RADANOVICH (R), CALIFORNIA: Well, I agree with Anna, it's a lot like saying, you know, you should just let the market do whatever it wants to in a World War II type situation. California is not normal right now and there's a lot of debate about what needs to happen in order to right this thing that's been wrong for about a year.
You know, there's an old saying out there that a fool and his money are soon parted and I can't help but think that in two ways it relates to California, because of the bad deregulation bill that was passed in 1995, but also in the state's handling of this thing for the last year.
And I, if, I think the caps argument is a good idea if it could be used to drive wholesale prices below retail prices and get this, get the pricing structure in California back in order. But there's no guarantee that the government, the state government would actually do that if they get that ability.
O'BRIEN: Mr. Radanovich, the other aspect of this Band-Aid legislation, if you will, or a stopgap measure is it would give the power companies in California sort of a bye on some of the environmental regulations which constrain them, Clean Air Act and allowing them to put transmission lines over park land, for example.
Does the end justify the means to that extent?
RADANOVICH: Well, I think you have to look at the choices that California is facing this summer. It's either lights out or temporary -- and I do mean temporary partial relaxation of environmental standards. And I represent some of the actual...
O'BRIEN: But wait. Once a power line is installed, that's not necessarily a temporary kind of thing, is it?
RADANOVICH: Well, right. But I think the idea that Yosemite National Park is going to be dammed up for a hydro project or lines are going across the, you know, from Half Dome (ph) to El Capitan (ph) is a very silly notion in this thing. I can tell you right now that in Yosemite part of the plan is we used to have a little hydro generating facility dam on the Merced River (ph) and it is currently being deconstructed.
So I think the first priority is keeping the lights on for California. If it means temporary relaxation of energy standards, then I am for people over the environment on this, during this emergency.
O'BRIEN: Ms. Eshoo, how do you respond to that? ESHOO: Well, the Bush administration came to town and then expressed themselves on a whole host of environmental issues. I don't think the American people want the Arctic National Wildlife Preserve drilled and call that a national energy policy. We have in the committee this week one of the Republican members saying well, the federal government controls the land and so we can put transmission lines in our national parks.
We need to set these things aside. Those ideas are, I think, dead on arrival. We need to get back to what will work. Californians need new generation and new plants are coming online and more need to be constructed. We need to conserve so that our long, hot summer doesn't affect us and we need some real political wattage exercised in Washington where the administration -- and I'm very pleased that they called for the conservation measures in federal buildings in California this week. That's a plus. It's a step in the right direction.
But we also need cost relief. The federal commission found that Californians were being gouged and gouged at huge rates. We know that when we get our PG&E bills, when we get our utility bills. So we need to stand on the side of the energy consumer. We are conserving. We're the best conservationists in the country. We're going to do even better.
I think the combination of these things is not only going to help us in the short-term -- and by the way, the cost-based price issue that I raise, we have asked that to be placed on the books for two years and that it would not apply to new generators. So I think it's a fair idea, it's a bipartisan idea and I think that more than anything else, the administration needs to come on board.
The vice president really caused a ruckus in the country when he said just a handful of days ago that conservation may be a personal virtue. It's a national value. And so what we have we need to conserve and with the combination of what I just outlined, I think we can not only get through our summer, but that we can move our way out of the mess that was made with this so-called deregulation scheme that was placed on the books some years ago.
O'BRIEN: All right, Mr. Radanovich, I've got to give you a quick opportunity to respond, but we're way out of time. If you want to take one of those points and respond to it, then we'll have to call it a day.
RADANOVICH: The place to solve this problem is in California and unfortunately the dim wattage has been in the leadership in California on this issue.
O'BRIEN: All right, George Radanovich and Anna Eshoo, both Congresspeople from California, on the same committee. Thanks so much for being with us on CNN SATURDAY MORNING. I don't think we've settled that debate just yet, but we'll stay tuned on it.
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