strange bedfellows senators dianne feinstein and gordon smith announce partnership in response to the western energy crisis march 15 , 2001 washington , dc - senators dianne feinstein ( d - ca ) and gordon smith ( r - or ) today announced an agreement to introduce bipartisan legislation to restore stability and reliability to the western energy market by directing the federal energy regulatory commission ( ferc ) to impose a temporary " just and reasonable " wholesale rate cap or cost - of - service based rates . the legislation will also require the states involved in this effort to pass on the cost of the electricity to retail customers . however , the states would be able to determine how and when this would be done . in other words , california could choose to use tiered - pricing , real - time pricing or set a baseline rate above which prices would be passed through . " we now have a piece of legislation that can fix the broken electricity market and provide a period of reliability and stability in wholesale energy costs , " senator feinstein said . " ferc has found the wholesale prices being charged in california to be unjust and unreasonable . this legislation essentially will mandate that once ferc makes such a finding , the agency will carry out its regulatory role . this is a $ 175 million a year agency . it is there to regulate the energy marketplace , and it should . what the federal government can do is to provide a period of reliability and stability at a time of crisis . unfortunately ferc has refused to do so . " " california ' s broken electricity market is a result of a flawed 1996 california law that deregulated wholesale costs , but left in place caps on retail prices . this was coupled with a requirement that the utilities divest themselves of their generating capacity and buy most of their electricity on the spot market , where prices have escalated dramatically . in hindsight all of this came together in a catastrophic scenario , so that today , california buys electricity at astronomical prices . we believe that ferc needs to act to help restore reasonable costs and stability to this marketplace . "