Editorial: Is relief finally on the way?

Thursday, June 14, 2001 | 10:55 a.m.

Sen. Dianne Feinstein, D-Calif., and Sen. Gordon Smith, R-Ore., are upset that federal regulators have done little to protect consumers in the West who for the past year have been gouged by the obscene prices charged by energy producers. In response, the bipartisan duo have co-authored pending legislation that would force the Federal Energy Regulatory Commission to set stricter price caps, something the agency has resisted. A resolution may be in sight to this impasse, though. Federal regulators next week may impose tougher controls on the prices charged by wholesale energy producers.

Earlier this year the Federal Energy Regulatory implemented limited price caps on energy, but they are weak -- they just apply to California and only go into effect when there is an emergency shortage of electricity. The new caps likely to be adopted by the federal regulators would apply throughout the West and be in force all the time. Still, the devil is in the details, and we'll have to see if the new limits really will bring down these higher prices.

California has been stung the most by the escalating energy costs, but the rest of the West, including Nevada, also has been tormented by the energy producers. Last week Nevada State Consumer Advocate Timothy Hay joined several other states in asking the 9th Circuit Court of Appeals to order the Federal Energy Regulatory Commission to set just and reasonable rates in the wholesale power markets. In the past year electric rates have risen about 25 percent in Nevada, and Hay notes that by early next year there are estimates that these rates will be 80 percent more than they were in September 2000.

So what is prompting a change of heart by the Federal Energy Regulatory Commission, an agency that had been reluctant to intervene and instead had wanted to let the market work its magic? For starters, the public outcry has gotten the agency's attention, and even some Republicans have joined with Democrats in pushing for reasonable, temporary price caps. The reality is that residential customers and businesses in the Western states have been hit hard. For that matter, there is no reason why energy producers should be charging unconscionably high prices. It is hoped that next week the Federal Energy Regulatory Commission finally honors its responsibility to ensure that fair and reasonable rates are being charged.