Showing its noninterventionist colors, the Bush administration decided against federally mandated energy price caps, despite pleas from a coalition of Western governors. Government and business leaders from California, Oregon and Washington met to convince the new Energy Secretary, Spencer Abraham, that short term price caps on wholesale energy prices were critical to stabilize the energy market.
Abraham countered that artificial price caps would increase demand, causing even greater energy shortages in the long run, especially coming into the peak summer months.
Abraham instead praised the states new conservation efforts as well as the decision to build more plants over the next few years. Recent rate hikes and rolling blackouts have found many companies reducing their electricity consumption by as much as 50%. Disappointed Western leaders claimed that federal aid in the short-term was critical to keep the energy crisis from spreading to the rest of the country.
The price cap decision comes on the heels of a $10 billion energy-buying bill passed by the California legislature. The funds are earmarked to buy energy in long-term contracts but summertime shortages are still expected.
Based on reports from The Los Angeles Times and The New York Times
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