Statement by Senator Dianne Feinstein on
Williams’ Support of Temporary Price Controls
May 8, 2001

“Williams today endorsed temporary price controls as part of an overall solution to the energy crisis in California. I applaud Williams’ decision, and I hope other electricity generators and marketers will follow suit.

For the first time, an electricity generator -- a company that is profiting from the absence of price controls -- has indicated that part of the solution to addressing the energy crisis includes a temporary cap on the prices being charged.

It is my hope that this decision will signal to the Bush Administration that there is support in the industry for a temporary price cap or cost-based rates and that it will take a less ideological, more pragmatic stance in the future. Unless the Administration changes its position, the blackout that occurred last night and the high prices for energy that are currently being charged will further debilitate California and the western region.

Last night’s blackout was the first of the summer season, and it is anticipated that many more will follow. The average cost of wholesale power in California yesterday was over $300 per megawatt hour. This contrasts with $30 per megawatt hour in 1999 – a ten-fold increase in just two years.

Furthermore, the price for natural gas is $12.67 per decatherm in Southern California, while it was approximately $4 in the rest of the western region. This disparity has raised the average Californian’s gas bill by two-thirds.

These two factors, combined with yesterday’s blackout, clearly demonstrate the need for price controls. I hope the Administration will recognize this, and take a less ideological approach to the energy crisis as we move into the summer months.”