Tuesday, September 27, 2005
Gov. Determined To Stop Price Gouging
By Trip Jennings
Journal Capitol Bureau
SANTA FE Gov. Bill Richardson is determined to push ahead with emergency legislation to outlaw price gouging at the gasoline pump, even if he's hard pressed to define it.
A little over a week before the start of a special legislative session, the governor and other state officials couldn't say how New Mexico regulators would distinguish between price gouging and businesses simply reacting to market forces.
But Richardson, a former U.S. energy secretary, said on CNN's "Late Edition with Wolf Blitzer" on Sunday that he sees no connection between the price of oil and the high prices consumers are paying at the pump.
"I don't believe that these profits that are being generated are being done without some kind of manipulation," he said.
While he couldn't articulate during a news conference on Monday how New Mexico might quantify exploitation, the governor reiterated that most residents are feeling the pain of high gasoline prices.
"It's hurting consumers, it's hurting kids, schools, agriculture," Richardson said. "In essence, the first step has to be, let's have a law that protects our consumers, and the state does not have a law."
Twenty-seven states have some form of anti-price gouging control, according to the New Mexico Attorney General's Office.
In most of those states, a disaster or emergency must be proclaimed before the hunt for price gougers can begin. Enforcement resides with the attorney general in 25 of those states.
Richardson has said he wants New Mexico's law to empower the governor to declare an emergency and invest the attorney general with authority to enforce the law.
The president of the New Mexico Oil and Gas Association, Bob Gallagher, forwarded some of the existing price-gouging laws to state officials. He said his organization supports putting consumer protection laws on the books.
But ultimately the industry's support will hinge on how state lawmakers define what constitutes price gouging.
Illustrating what he said is the difficulty, Gallagher used an example of two businesses that sell gasoline at the same corner.
One station sells it for $2.85 a gallon, attracting a long line of customers. The other, noting the competitor's line of customers, charges more than $4 per gallon to lure away people who are unwilling to wait.
"Is that gouging or a bad business decision?" Gallagher asked.
The average price of gasoline in New Mexico on Monday was $2.84, 4 cents above what it was Sunday and nearly $1 over the price one year ago.
Nationally, some analysts say prices will rise again in the near future in the aftermath of Hurricane Rita, which struck the Gulf Coast this weekend less than a month after Hurricane Katrina devastated Louisiana.
Price gouging has become a Richardson catchphrase in recent days.
During his CNN appearance, he called for a federal probe into potential price gouging.
He also said the oil and gas industries are not investing enough profits into refineries.
Gallagher said the reason the industry hasn't built a refinery in recent years "has more to do with the regulatory arena" than a deliberate decision.
States don't want to permit a refinery and experience the backlash from angry residents, he said.
"It's the typical not-in-my-backyard philosophy," Gallagher said. "If you were to look at a refinery, it takes 10 years to design, permit and build and in excess of $2 billion."
Richardson said he is likely to give up on an idea he advocated earlier this month to sign an executive order appointing a nine-member task force to determine whether price gouging is occurring in New Mexico.
"The only way you determine that is with a law," Richardson said Monday. "You can't do it with just fact finding."
Special session Oct. 6
SANTA FE Gov. Bill Richardson has pushed back the start date of a special legislative session to Oct. 6.
He is calling the session to consider giving New Mexicans $100 million worth of relief from high gasoline and home heating costs.
The special session initially had been set to begin Oct. 5. But Richardson on Monday said the session now will begin at noon Oct. 6 out of deference to New Mexico's Jewish and Muslim communities.
The Jewish holiday of Rosh Hashana begins at sunset Oct. 3 and ends at sunset Oct. 5, while the Muslim holiday of Ramadan begins Oct. 5.
-- Journal Capitol Bureau