Members of the Conference's Energy and Environment Committee dedicated their full agenda to a discussion of the continuing gas and electric supply and pricing crises that have struck the West Coast, the Midwest and other regions of the nation.

The January 18 Winter Meeting session which was convened by Charlotte Mayor Patrick McCrory, chair of the Energy and Environment panel, who led presentations by key mayors affected by gas and electric supply and pricing problems, focusing on how these developments are harming their respective cities and regions.

Natural Gas and Electricity At Issue

Chicago Mayor Richard M. Daley presented a paper on his city's many efforts to combat the effects of natural gas prices, particularly given this winter's extremely cold temperatures. He briefed the panel members on a number of key recommendations that he has developed to help Chicago residents and others deal with the burden of rising gas prices. "I want to see an increase in LIHEAP (Low Income Home Energy Assistance program)," Daley said. Indicating that it is hard to explain why natural gas prices have risen so dramatically, Daley said, "We should ask Congress to investigate gas prices."

Daley also discussed how the City of Chicago is promoting Ôhome fairs' that "educate people on what they do, like fixing homes and weatherization." He noted that Chicago is asking the Illinois General Assembly to change state laws. Daley also emphasized that there is a need to increase exploration and take other actions increase natural gas supplies.

Following a discussion with panel members on the problem, mayors from the West Coast discussed the region's electricity crisis and the continuing efforts of both supply shortfalls and dramatically rising costs. Santa Clara Mayor Judy Nadler, detailed the disruptions to her region's economy and the challenge of delivering basic services as rolling blackouts continue throughout California. Nadler pointed out that the public as well as businesses, particularly larger consumers, had been very responsive to the crisis. Despite such efforts, she noted that key Ônew economy' businesses, like Intel, Nextel, HP and others, which are concentrated in her city and region, are suffering under the burden of supply instability. Nadler also explained that relief is nowhere in sight.

Electricity Crisis Hits Northwest

Also making a presentation was Tacoma Mayor Mike Crowley who talked about the effects of the electricity crisis on the Northwest. "This is not a California issue, it is also a Northwest issue," Crowley said. He described how the competition for scare electricity supplies in the West had resulted in a 40-70 percent increase in costs for his city ratepayers. Crowley projected that Tacoma's electric utility will deplete its "cash reserves of $130 million by April." He also explained that the recent drought in the Northwest will also further reduce hydroelectric output throughout the region, extending the shortfall of electricity well past this immediate crisis.

Following the presentations, the Committee members discussed strategies to respond to these conditions. The Committee directed that an emergency session of the Conference's Electric Utility Restructuring Task Force be held before the Winter Meeting was adjourned. The Committee directed that the task force's name be expanded to include gas as well as electric issues. There was a general discussion on action steps to consider, with a call for an investigation of the situation in California, as a precursor to the development of a specific recommendations by the mayors for a comprehensive energy policy.

Before the Committee adjourned, the mayors heard from senior officials of the U.S. Environmental Protection Agency, who provided a quick overview on recent agency actions pertaining to new standards for diesel engines and diesel fuels as well as new rules affecting sanitary sewer overflows (SSOs) and combined sewer overflows (CSOs).

Mayor McCrory noted his involvement with the new Administration's transition team on EPA, indicating that he would be following up with mayors on transition issues.

Special Emergency Energy Session Held

On the following day, North Little Rock Mayor Patrick Henry Hays and Mayor Patrick McCrory led a discussion among more than 30 mayors on what actions were needed to respond to the continuing electricity crisis on the West Coast and to respond to concerns about rising natural gas prices throughout the U.S.

In calling the meeting to order, Hays noted that the Conference's Gas and Electric Utility Restructuring Task Force, which he chairs, would be reconstituted to involve other mayors who wanted to support the organization's work on these issues. Mayors then reported on the local and regional impacts of higher gas and electricity prices and supply problems.

West Coast mayors talked about the many factors contributing to the electricity crises, explaining how California's electric utility restructuring law is just part of the story. Seattle Mayor Paul Schell emphasized how conservation is one of the immediate responses that would ease continuing shortfalls on the West Coast. Mayor Nadler explained that the most important thing to be done is to reassure the public, using mayors and the Conference, to communicate that steps are being taken to resolve the situation.

Mayors reiterated that the issues before many regions of the nation require a national response. Following some discussion, the group recommended a series of action steps. First, there was a call for an independent investigation of what went wrong with restructuring in California to make sure that the mayors are informed in making final recommendations for federal action. As an immediate step, the mayors agreed to call for a conservation goal of a 10 percent reduction in energy use to dampen pressure on supplies and prices. It was emphasized that cities could help lead this effort, setting an example by conserving energy. Finally, the mayors agreed to reconvene within 2-4 weeks to begin working on recommendations and other action items, including engaging federal officials in discussions on a broader national energy program. Mayors Hays and McCrory were also asked to brief Conference leaders on these issues at the February Leadership Meeting.