Energy Law
May 31, 2001
FERC Doesn't Have to Issue Price Control
SACRAMENTO - A legal action by the state's top lawmakers against federal energy regulators was quickly rejected Tuesday by a panel of the 9th U.S. Circuit Court of Appeals in San Francisco.
Filed just last week by Senate President Pro Tem John Burton and Assembly Speaker Robert Hertzberg, both Democrats, the emergency petition asked the court to order the Federal Energy Regulatory Commission to impose price controls in California's out-of-control energy market.
The city of Oakland also joined as a petitioner in the case, Burton v. Federal Energy Regulatory Commission, 01-70812.
"The citizens of California are suffering immediate irreparable harm as a result of FERC's abrogation of its duty to establish just and reasonable rates for electricity" under the Federal Power Act, the suit contended.
It argued that blackouts, resulting from skyrocketing rates, threatened the elderly, the disabled and others who rely on a constant power supply.
Despite the legislators' urgent pleas, a three-judge motions panel of the 9th Circuit, which had original jurisdiction in the case, chose to stay out of the state's power crisis.
"Petitioners have not demonstrated that this case warrants the intervention of this court by means of the extraordinary remedy of mandamus," the judges said in a one-page order.
The panel included conservative Judge Ferdinand Fernandez and moderate Judge Kim Wardlaw. Conservative Judge Alex Kozinski unexpectedly replaced liberal Judge Harry Pregerson, who was originally assigned to the court's motion and screening panel in May.
Veteran Burlingame plaintiffs' lawyer Joseph Cotchett, who represented the legislators in their petition, said the judges made a mistake.
"It's unfortunate that three members of the 9th Circuit did not see this as a crisis," Cotchett said.
Cotchett said he would next seek review by an en banc panel of the appeals court.
The panel's decision was released the same day as a scheduled meeting between Gov. Gray Davis and President Bush over the governor's request for federal price caps. Bush has steadfastly refused to consider such limits.
Also on Tuesday, Hertzberg and Assembly Speaker Pro Tem Fred Keeley, D-Boulder Creek, formally petitioned FERC to reconsider its April order imposing price limits only during power emergencies.
"We'd like price caps before we get to emergency status," said a spokeswoman for Hertzberg.
And on Friday, the governor announced a "coordinated state legal assault to force federal regulators to halt price gouging by energy generators."
Davis, too, sought a rehearing on FERC's order to limit prices only during "staged alerts" in California. The state's Electricity Oversight Board, Public Utilities Commission, and Independent System Operator all filed requests for reconsideration of the order.
"Federal regulators said that prices were 'unjust and unreasonable' nearly nine months ago, but they have been AWOL ever since," the governor said in a written statement.
"FERC's pricing plan is laced with loopholes," Davis added. "It's worse than too little, too late. It's simply a fig leaf that does nothing to address the impact of the energy crisis on California and our nation."
Attorney General Bill Lockyer, a Democrat, also joined in the siege on FERC, asking the commissioners to reconsider their April 6 order that all purchasers of electricity be "creditworthy."
Lockyer argued the requirement blocked the power of the Independent System Operator, the state's power grid manager, to keep power flowing to customers of financially troubled Southern California Edison and Pacific Gas & Electric.
"It contravenes all reason and decency to elevate the financial interests of generators above the preservation of public health, safety and welfare," Lockyer said.
Hudson Sangree
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