Statement by U.S. Senator Dianne Feinstein
on the Federal Energy Regulatory Commission’s
Findings on the Surge in Electricity Costs in Southern California
November 1, 2000

"The order issued today by the Federal Energy Regulatory Commission (FERC) clearly acknowledges that this summer's surge in electricity prices in the San Diego area was `unjust and unreasonable' and California's energy market rules are seriously flawed.

It is evident that California's efforts with regard to energy deregulation have failed and the State must go back to the drawing board.

FERC recommended a temporary soft cap of $150 per megawatt hour on the auction price that energy generators sell into the Power Exchange. I had previously recommended this step to FERC, and if this soft cap is implemented, it will be an important first step in dealing with the skyrocketing electricity prices.

FERC also proposed allowing investor owned utilities to purchase power bilaterally without going through the Power Exchange. This would allow the utilities to search for better energy prices. I hope that FERC and the California Public Utility Commission can work together to ensure this happens.

Next week, I intend to meet with an advisory council of energy experts I am establishing to determine what further steps may be needed, both on the federal and state level to ensure reasonable electricity prices for all Californians."