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Court Declines Energy Price Cap

May 30, 2001

SAN FRANCISCO (AP) _ A federal appeals court declined Tuesday to order U.S. energy regulators to cap wholesale electricity prices.

The decision by a three-judge panel of the 9th U.S. Circuit Court of Appeals came on the same day President Bush met with Gov. Gray Davis and rejected the Democrat’s call for a cap on spiraling power costs. Davis said California would sue the Bush administration to force lower prices.

State Senate President John Burton and Assembly Speaker Robert Hertzberg, both Democrats, had joined with the city of Oakland in asking for the court order against the Federal Energy Regulatory Commission.

``The citizens of California are suffering immediate irreparable harm as a result of FERC’s abrogation of its duty to establish just and reasonable rates for electricity,″ they wrote.

The lawmakers said California’s looming threat of continued blackouts ``are an imminent threat to the health, welfare and safety of every California citizen.″

The court panel said the issue did not warrant intervention.

In December, wholesale prices in California reached $200 per megawatt hour _ and they have skyrocketed to as much as $1,900 per megawatt hour during peak times since then.

The Bush administration opposes price caps and President Bush has declined Davis’ requests to urge FERC to impose strict caps.

Last month, FERC did order a one-year cap on electricity sold into California during power emergencies, when power reserves fall below 7 1/2 percent. The agency did not set a price and required the state to join a regional transmission organization, which could limit California’s ability to control its own power grid.

Davis has criticized the plan and state power regulators said it would profit power generators at ratepayers’ expense.

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