----- Original Message -----
From: Gene Cramer
Sent: Friday, March 16, 2001 2:26 PM
Subject: EnLG 2001mar16 ENERGY SECRETARY SAYS SUMMER BLACKOUTS 'INEVITABLE'
ENERGY SECRETARY SAYS SUMMER BLACKOUTS 'INEVITABLE'
Shortages could affect other Western states, Spence Abraham warns.
Orange County REGISTER March 16, 2001
By H. JOSEF HEBERT The Associated Press
Power blackouts "appear inevitable" in California this summer and could spill into neighboring Western states, even as stocks of a gasoline additive raise concerns of another summer of price spikes at the pump, the Bush administration says
U.S. Energy Secretary Spence Abraham told a Senate hearing that the administration is trying to find ways to increase power supplies in the West, where prices have soared because of shortages. The administration strongly opposes price controls, he said.
"The problem will get worse, and blackouts this summer appear inevitable," Abraham said. The administration's hope is that "California doesn't start a wave of blackouts that go beyond its borders," he said.
Abraham announced no specific actions to ease the Western electricity crunch, although he said he has discussed the possibility of a small amount of additional power being obtained from Mexico.
He said the administration opposes price controls on wholesale power sales in the West, despite pleas from California and the Northwest that federal intervention in "a broken market" is essential.
"Let me be clear on this," he told a hearing on price-control legislation; "Any action we take must either help increase supply or reduce demand. ... Price caps will not increase supply or reduce demand."
He said California tried price controls, and prices soared. He said the debate over wholesale prices is diverting attention from the need to find ways to increase supplies and prevent blackouts.
"All we're asking for is help to prevent price gouging," said Sen. Dianne Feinstein, D-Calif. She said the state faces a likely shortage of 5,000 megawatts of power during peak demand periods this summer.
Sen. Gordon Smith, R-Ore., and Feinstein have proposed legislation to require the Federal Energy Regulatory Commission to limit prices charged by power generators across 11 states in the West. Wholesale electricity in California averaged $228 a megawatt in February, eight times what it cost a year earlier.
At the White House, spokesman Ari Fleischer indicated Bush's opposition to the Smith-Feinstein legislation.
Meanwhile, there was growing concern that this summer may bring another series of price spikes for gasoline, although many energy experts said it was too early to tell if it will be another season of $2-a-gallon fill-ups.
The Energy Information Administration forecast average gasoline prices this summer of $1.49 a gallon, about a dime higher than in recent weeks. But those numbers could change if gasoline supplies lag or if there emerges a shortage of additives to meet air pollution requirements in major cities.