Energy Crisis

General Statement
Every day I hear from businesses, schools, non-profits, elected officials and individual consumers -all of whom are rethinking their budgets and changing their behavior in order to respond to skyrocketing energy prices and rolling blackouts. Your message has been consistent- the federal government must act deliberately and immediately to institute short and long-term remedies to the energy crisis that is having catastrophic consequences on the Bay Area and across California.

The economic undercurrents of the electricity problem reach into virtually every aspect of our lives. The effect can be felt in our schools that must now divert funds away from buying books or hiring additional teachers in order to pay their energy bills. The effect can be felt in our communities where vital services may no longer be available in emergencies; and the effect can be felt by our Silicon Valley businesses that have already lost tens of millions of dollars due to blackouts.

Price Mitigation
The Federal Energy Regulatory Commission (FERC) is legally responsible for making sure that our electricity rates are "just and reasonable"- yet FERC has refused to protect California's ratepayers. California and the other western states can no longer afford to wait for FERC to get off the sidelines and get in the game.

Like many of you, I have been both alarmed and frustrated by the soaring costs of energy over the last several months. I have remained very active in the ongoing effort to force the FERC to protect our electricity ratepayers from unfair and unreasonably high electricity bills. In fact, FERC has already determined that certain out-of-state energy wholesalers have charged "unfair" and "unreasonable" rates to California's utilities but have refused to act upon this finding by giving California needed price relief and refunding the ratepayers the money they are owed.

In order to get FERC off the sidelines, I have joined with my colleagues from the Western States to explain clearly to President Bush and FERC what everyone in California already knows- ratepayers here in the Bay Area have been gouged by the out-of-state electricity generators. President Bush has the authority and the obligation to take common-sense action on behalf of our communities to restore stability and fairness to the western electricity market.

I have also joined with a number of my colleagues from California in sponsoring several pieces of legislation that direct FERC to protect California families and businesses by stabilizing the Western wholesale electricity market by imposing cost-of-service rates. I have co-authored the Energy Price and Economic Stability Act, H.R. 1468, legislation that would direct FERC to impose cost-of-service rates to protect ratepayers in the Western states for the short term. It would also allow states to pursue legal avenues to recover past and present "unjust and unreasonable" overcharges from generators in order to refund ratepayers that have been overcharged.

The Bush Administration's argument that reasonable price mitigation measures would stunt the growth of new energy generation is disingenuous. The Energy Price and Economic Stability Act promises generators a healthy return on their investment, while exempting new generation from any price mitigation. This legislation, which expires in March 2003, is a targeted short-term solution and should be considered by the House. Unfortunately, the Republican leadership is refusing to bring common-sense this legislation to the Floor for a vote.

It is important for the Bush Administration to realize that, just as the high costs of electricity have a "ripple effect" on our lives in California- so too will the electricity problem in California have a "ripple effect" on the western United States, and the nation. For this reason, the federal government must act boldly and swiftly to restore stability and fairness to the western electricity market.

Bush Energy Plan
Since President Bush was inaugurated in January, I've seen little to suggest that he has any real understanding of the California energy crisis, nor any desire to play a critical role in promoting energy conservation and renewable energies to create a well-balanced national energy portfolio. The Bush Plan, unveiled in May, confirms our worst fears. In the short-term, it does nothing to address the Western region's energy crisis, and in the long-term, it charts our nation on a course that will make us more dependent upon fossil fuels. His energy plan-a plan dripping with oil- only adds insult to injury.

Despite repeated pleas from California lawmakers, the President has refused to implement any meaningful price mitigation measures. By his own admission, his plan will not help California in the short-term. We need the federal government to meet its obligation now to maintain fairness and stability to the wholesale electricity market.

The Bush plan only pays "lip service" to energy conservation and renewable energies-which are essential if we are to become less dependent on fossil fuels and develop cleaner, more efficient ways to generate energy. While the White House claims to promote research and development, conservation and new technologies, President Bush and Vice President Cheney have actually cut federal conservation and research & development programs in the Department of Energy's budget. Vice President Cheney, has indicated that conservation is a "personal virtue," but not a sufficient basis for a sound energy policy. Bush's budget proposes to cut the federal energy conservation programs by $180 million, a 27.2% cut. The Bush budget also cuts by 46% the federal program that develops new, more advanced ways to conserve electricity in large office and residential buildings and cuts a similar program specifically for federal buildings by 48.2%. It is also likely that the Bush Administration will cut the Partnership for a New Generation of Vehicles, which creates economic incentives for the development of more fuel-efficient vehicles by over $50 million this year.

President Bush also lacks credibility in the area of renewable energy. He says that research in renewable energies is important, and yet, he proposes to cut funding for the federal renewable energy activities by almost 26% next year.

To make matters worse, the Bush plan makes the development funding for renewable energies dependent on revenues from oil and gas leases earned from private sector drilling in Alaska National Wildlife Refuge (ANWR). The trade-off that the Bush plan proposes is unacceptable, and unnecessary. We have a responsibility to protect pristine lands like ANWR and to develop environmentally-friendly energies like biomass, solar, wind and geothermal generators. The false choice between protecting ANWR and developing these critically important energy sources is no choice at all. Under the Bush plan, the only people who win are the President's allies in the oil industry. Sadly, it seems that Mr. Bush's energy plan is just like his tax plan- no short-term relief, but we all pay the price over the long run.

Instead, I support a better plan, put forth by the Democrats- one that better nurtures Research & Development efforts in both renewable energies and energy conservation. The Democratic plan increases the existing infrastructure tax credit to 20% for solar and geothermal generation, and extends the credit to wind, biomass and other sources of alternative energy. The plan also provides at least $1 billion per year to cities, non-profits, and schools for the purpose of integrating renewable technologies into building infrastructures. The Democratic plan also provides generous tax credits to businesses and households to improve energy efficiency. In short, the Democratic plan, unlike the Bush plan, preserves the integrity of our environment while developing a well-balanced energy portfolio.

The Supply Issue
It is important to recognize that traditional energy sources, such as natural gas, crude oil, and coal will be used to meet the majority of America's growing energy needs in the foreseeable future. Currently, petroleum and natural gas account for approximately 65 percent of the nation's energy supply. I am committed to a policy of increased production and environmentally sound use of traditional energy supplies and believe we need to provide greater market stability in the oil and gas industry to help maintain and increase domestic production, and to deter price swings that hurt American families. Unlike the Bush Administration, I believe that we must use traditional energy sources in an environmentally sensitive manner, employ strong and sensible conservation measures and decrease, not increase our dependence on fossil fuels over time. By making the right investments now, in renewable energies like biomass, wind, solar and geothermal we can create a balanced energy portfolio that sustains us for the long haul, without permanently damaging the quality of our air, land and water.

Energy Conservation
I am proud that Californians are working together to help meet this crisis-by pulling together and conserving energy, California has recently been rated number two in the nation in energy conservation efficiency. In fact, in the month of May, Californians exceeded the state's goals by using 11% less electricity. Government buildings are now required to meet rigorous conservation goals and efficiency standards, which have produced results. We are also coordinating an exhaustive outreach and education campaign in our communities, working with businesses, local governments, school districts, and millions of California consumers, with the objective of reducing energy consumption. Governor Davis has led these efforts with an $800 million package of initiatives and rebates to promote conservation and energy efficiency throughout the state.

Though California already has a superb energy conservation record, the people of California have sought to do more, cutting energy consumption by 8% in February. Governor Davis has encouraged this effort in word and deed, asking Californians to conserve 10% in the coming months, and proposing a 20% rebate for anyone who reduces consumption by 20% over last year. California's leadership in conservation must be replicated and supported at the federal level by giving more grants and incentives to state and local governments and schools who undertake energy efficiency, conservation and alternative fuels programs. I am disappointed that so far, the Bush Administration does not appear to consider such efforts important.

I have cosponsored numerous bills that would strengthen our nation's efforts to implement higher standards for fuel efficiency and energy consumption. I also support to proposals that would provide more funding for conservation R&D and tax credits to businesses and households that install energy saving devices. I continue to believe that energy conservation should be a critical part of our nation's energy policy and I will fight for legislative proposals that accomplish this goal.

Renewable Energy
President Bush says that research in renewable energies is important, and yet, in the Bush plan, research & development funding for renewable energies is made dependent on revenues from oil and gas leases earned from private sector drilling in ANWR.

President Bush also lacks credibility in his lackluster advocacy of renewable energies. He says that research in renewable energies is important, and yet, he proposes to cut funding for the federal renewable energy activities by almost 26% next year. To make matters worse, the Bush plan makes the development funding for renewable energies is made dependent on revenues from oil and gas leases earned from private sector drilling in Alaska National Wildlife Refuge (ANWR). The trade-off that the Bush plan proposes is unacceptable, and unnecessary. We have a responsibility to protect pristine lands like ANWR and to develop environmentally-friendly energies like biomass, solar, wind and geothermal generators. The false choice between protecting ANWR and developing these critically important energy sources is no choice at all. Under the Bush plan, the only people who win are the President's allies in the oil industry. Sadly, it seems that Mr. Bush's energy plan is just like his tax plan- no short-term relief but we all pay the price over the long run.

Bush's budget would cut funding for federal renewable energy activities by 26%. Hydropower would receive a 49.9%, while solar energy research would be cut by 53.7%. According to Bush's budget, wind energy programs would be cut by 48.2%. It is simply irresponsible to cut these programs so vital to establishing a dependable, clean power source for California and the nation. It is simply disingenuous to claim to support these efforts in the press while cutting them in the budget.

We must increase the role of renewable energy in our national energy portfolio by increasing the investment tax credit for renewable energy infrastructure to 20% for solar and geothermal and extend the credit to wind, biomass and all other sources of renewable energy. We should also support proposals to create an infrastructure bank, funded at $1 billion a year, that would provide grants and loans to publicly owned electric generators and loans to private generators who develop renewable energy.