Legislative leaders set to sue federal energy regulators

By Don Thompson Associated Press Writer
Monday May 07, 2001

SACRAMENTO – Democrat state lawmakers said Saturday they will sue federal energy regulators for refusing to cap the spiraling cost of electricity in the midst of California’s power crunch. 

Leaders of the state Senate and Assembly will contend that the Federal Energy Regulatory Commission is violating federal law. 

“They’re not following (the section) that requires just and reasonable rates,” Senate President Pro Tem John Burton, D-San Francisco, said Saturday. “Nobody thinks they’re doing that.” 

The suit will be announced Monday, he said. 

Democratic Gov. Gray Davis is not a party to the suit, but “is supportive of any effort to make sure FERC does its job,” said Davis spokesman Steve Maviglio. 

No one answered the phones at FERC’s media office Saturday, and FERC officials could not immediately be reached to comment. 

Democrats also said they will propose shutting down a special session that has occupied legislators since January. The idea, they said, is to make an end-run around Assembly Republicans who have refused to allow the state to issue up to $12.5 billion in bonds, a key part of Davis’ plan to end energy problems. 

Democratic leaders plan to try to pass the bond issue Monday with the two-thirds vote needed to allow it to take effect immediately. 

If that effort fails without Republican votes, they will try for passage using Democrats’ simple majority. They would then have to end the special session to trigger a 90-day clock until the law could take effect and the bonds could be issued. 

That strategy would mean scrapping the “bridge loans” that officials hoped would provide short-term repayment of $6.2 billion the state has shelled out since January to buy power for cash-starved utilities. And that means patching together the state budget for three months until the long-term bonds could be issued over Republicans’ opposition. 

Assembly Republicans want the state to issue no more than $8 billion in bonds and absorb about $5 billion. Democrats say that money should be saved for environmental, child care and other state programs. 

Assembly GOP Leader Dave Cox of Fair Oaks argued Saturday that the state can afford to do without the money, given the budget surplus it built during better economic times. 

“I think it shows the arrogance of the situation” that Democrats would act without Republican votes, Cox said. 

When it comes to federal regulators, however, there is bipartisan dissatisfaction. 

Last month, FERC ordered a one-year cap on electricity sold into the state during power emergencies, when power reserves fall below 7 1/2 percent. But Davis and state power regulators dismissed the cap as inadequate. 

The pending lawsuit follows months of lobbying by Davis and legislative leaders of both parties. 

Meanwhile, Assembly Speaker Robert Hertzberg, D-Van Nuys, is working on a three-state strategy to lower both electric costs and the risk of blackouts in the drought-stricken Pacific Northwest. 

Hertzberg is working with U.S. Sens. Patty Murray, D-Wash., and Gordon Smith, R-Ore., on the proposal, which would require FERC approval, a legislative source said Saturday. 

Smith broke last month with the Republican Bush administration to work with Democratic congressmen and Sen. Dianne Feinstein, D-Calif., for a bill requiring FERC to cap wholesale electric prices across the West. 

But legislative leaders decided they needed to go to court as well, Burton said. 

He retained Bay Area Democratic attorney Joseph Cotchett to represent the state for $1 a month, but said he expects the state Senate and Assembly to each approve spending up to $75,000 for other legal costs. 

State lawyers, meanwhile, are examining whether the Legislature is the right body to sue the FERC and whether any state entity can compel the federal commission to act. 

“Why not?” said Burton. “We represent the people of the state of California.”