Will Energy Price Ranges Work? West's Still Bracing For Blackouts.(ISSUES & INSIGHTS)(EDITORIALS)

Byline: Charles Oliver

Curt Hebert is optimistic. You would expect him to be. Last month, Hebert, chairman of the Federal Energy Regulatory Commission, issued an order to hold down the wholesale price of electricity in 11 Western states.

"This is a plan that is good for California, good for the Pacific Northwest and good for the entire West," Hebert said on unveiling his order. "It is a balanced plan that respects market forces and that attempts to restrain prices, while at the same time offering incentives for investment in supply and delivery that is the only real solution to the West's immediate energy problems."

More Supply's The Answer

He got that right. The only real solution to the West's energy crisis is more supply. It's just not clear how the FERC's plan will affect supply.

Analysts say the plan will tone down the big spikes in wholesale prices in the spot market. But they warn it does little, if anything, to boost supply. In fact, they say, the plan could make blackouts more likely this summer, not just in California but across the West.

There's a natural law, you see: Cap prices, cause shortages.