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SJR-7 Federal Energy Regulatory Commission: wholesale electric prices.(2001-2002)

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SJR7:v96#DOCUMENT

Amended  IN  Senate  March 20, 2001
Amended  IN  Assembly  June 04, 2001
Amended  IN  Assembly  June 11, 2001
Corrected  June 12, 2001

CALIFORNIA LEGISLATURE— 2001–2002 REGULAR SESSION

Senate Joint Resolution
No. 7

Introduced  by  Senator Alpert
 (Principal Coauthor(s): Assembly Member Cohn)
 (Coauthor(s): Senator Bowen, Escutia, Figueroa, Kuehl, Morrow, Ortiz, Polanco, Scott, Sher)
 (Coauthor(s): Assembly Member Aroner, Havice, Kehoe, Koretz, Lowenthal, Pavley, Vargas, Wayne, Alquist, Cardenas, Cardoza, Cedillo, Chan, Chavez, Chu, Corbett, Correa, Diaz, Dutra, Firebaugh, Florez, Frommer, Goldberg, Hertzberg, Horton, Jackson, Keeley, Liu, Longville, Matthews, Migden, Nakano, Nation, Oropeza, Papan, Reyes, Salinas, Shelley, Simitian, Steinberg, Strom-Martin, Thomson, Wesson, Wiggins)

March 01, 2001

Relative to wholesale electric prices.


LEGISLATIVE COUNSEL'S DIGEST


SJR 7, as amended, Alpert. Federal Energy Regulatory Commission: wholesale electric prices.
This measure would memorialize the President of the United States and the Congress to support legislation introduced in the Congress requiring the Federal Energy Regulatory Commission to: (1) order a refund of the portion of any rate or charge that exceeds the rate or charge that the commission finds to be just, reasonable, and not unduly discriminating or preferential; and (2) issue a temporary order to establish the maximum price for electricity sold at wholesale subject to the jurisdiction of the commission in the Western Systems Coordinating Council for any period after June 1, 2000, if the commission determines that any rate charged for the wholesale sales of that electricity is unjust, unreasonable, unduly discriminatory, or preferential.
Fiscal Committee: NO  
WHEREAS, As part of California’s deregulation of the electric utility industry, the new owners of the electric generating plants that were sold by the state’s investor-owned utilities are regulated by the federal government; and
WHEREAS, The Federal Energy Regulatory Commission (FERC) granted electric generators the ability to charge market-based rates with the understanding that in a workably competitive market, market-based rates will always produce “just and reasonable” prices; and
WHEREAS, Commencing in May of 2000, and continuing to the present, wholesale electric prices throughout much of the western United States have climbed to unjustifiable levels; and
WHEREAS, High electric rates threaten not only California’s consumers, its neighbors, and businesses, but the economy of the entire nation; and
WHEREAS, FERC has preliminarily found that a wholesale electric seller in California withheld electric supply in order to raise prices to California citizens and businesses; and
WHEREAS, FERC has issued two orders that state that the rates currently being paid generating plants for electricity are “unjust and unreasonable,” and, nevertheless, the commission has ordered only minimal refunds and refused to examine thousands of wholesale transactions whose prices exceed the level that FERC set as the threshold for examination and has further refused to revoke the ability of electric generators to charge market-based rates; and
WHEREAS, Accordingly, it is necessary to enact federal laws to require FERC to order a refund of the portion of any rate or charge that exceeds the rate or charge that the commission finds to be just, reasonable, and not unduly discriminating or preferential; and
WHEREAS, It is also appropriate for the federal government to require FERC to issue a temporary order to establish the maximum price for electricity sold at wholesale subject to the jurisdiction of the commission in the Western Systems Coordinating Council for any period after June 1, 2000, if the commission determines that any rate charged for the wholesale sales of electricity is unjust, unreasonable, unduly discriminatory, or preferential; now, therefore, be it
Resolved by the Senate and Assembly of the State of California, jointly, That the Legislature of the State of California memorializes the President and the Congress of the United States to support legislation introduced in Congress requiring FERC to do both of the following: (1) order a refund of the portion of any rate or charge that exceeds the rate or charge that the commission finds to be just, reasonable, and not unduly discriminating or preferential; and (2) issue a temporary order to establish the maximum price, which shall be based on the seller’s costs, including a return of , and on, invested capital, for electricity sold at wholesale subject to the jurisdiction of the commission in the Western Systems Coordinating Council for any period after June 1, 2000, if the commission determines that any rate charged for the wholesale sales of that electricity is unjust, unreasonable, unduly discriminatory, or preferential; and be it further
Resolved, That the Secretary of the Senate transmit copies of this resolution to the President and Vice President of the United States, the Speaker of the House of Representatives, and to each Senator and Representative from California in the Congress of the United States.
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