San Francisco Chronicle: Despite ample muscle to aid energy-starved California, federal regulators have drawn up a puny rescue package. Instead of tough limits on runaway power costs, Washington approved porous caps that kick in only in dire emergencies.
Perhaps it was too much to expect the Federal Energy Regulatory Commission to impose stringent caps on wholesale power costs. Its chairman, Curt Hebert, is an apostle of open markets, and the Bush administration has refused to help fix California's broken market with energy price controls.
But consider the half steps offered by Hebert's offer. The so-called "mitigations" kick in only during acute shortages, not the rest of the time when costs are still sky high. Keep in mind California is spending $73 million a day buying electricity at rates that are 10 to 20 times its cost of last year. It's a 24/7 problem, and FERC is offering relief only in the direst cases.
Even when demand draws down supply to emergency levels, the ceiling authorized by FERC is set at a generous level for power generators. The price to be paid is that of the least efficient, highest-cost power plant. This guarantees that all other plants will reap extra benefits.
Poor planning: California's energy woes stem from numerous problems: a self-inflicted reregulation plan that backfired, bad weather, poor planning and a weak political will to fix matters. The results are a dysfunctional market, with spiraling prices swamping the state's ability to pay for electrons.
The big winners are generators, the owners of power plants that are in the golden position of selling to a voracious market. Stemming this profiteering is the traditional job of regulators, and such a duty rests with FERC empowered to set "just and reasonable" prices.
Ideology, not practical results, is undercutting this historic goal. The Washington mind-set believes that the current high prices will draw in hungry competitors who will beat the price down over time.
It's a fine blackboard concept, but California will be bled white before reasonable prices appear. Already PG & amp;E has declared bankruptcy, and the state is moving toward a $12 billion bond measure, the biggest in California history, to pay for present and future power buys.
U.S. Sen. Dianne Feinstein and her colleague, Gordon Smith, R-Ore., are pushing legislation to impose tougher controls on wholesale power, not the flimsy restraints suggested by FERC. It's a plan that would achieve results, not window dressing.
NO WAR OF WORDS
Miami Herald: Anybody on the planet who doubts the might and muscle of the U.S. military would be making a grave mistake. That's a fact, not fiction or braggadocio. To paraphrase Teddy Roosevelt, we can speak softly because we carry a big stick.
Which is why it is so puzzling that President Bush would find it necessary to warn China that the United States would do "whatever it takes to defend Taiwan." A 1979 law passed by Congress and honored by every president since, including Mr. Bush's father, binds the United States to the "defense" of Taiwan. The law uses words that are purposely ambiguous to allow the president and Congress flexibility in matching our response to a particular situation and to discourage Taiwan from taking bolder steps than it might otherwise take.
Sound-bite: No matter how well-calculated, Mr. Bush's statement serves no good U.S. purpose because it fixes the United States' position in stone. Mr. Bush's statement may be a great television sound-bite, but it comes across as a rookie mistake, similar to Secretary of State Colin Powell's equally ill-advised comments that Fidel Castro has "done good things for his people" and is "no longer the threat he once was."
The president's defenders point out that Mr. Bush's comments are no different than similar statements he made when campaigning for office. True enough, but that is precisely the point. Candidate Bush didn't have his finger on a nuclear trigger that can blow the world to smithereens. President Bush does.
President Bush and his team should put the cowboy diplomacy on a back burner and begin governing like the leaders of the world's only superpower that they are.