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California and the West | CAPITOL JOURNAL

Davis Finally Ready for His Close-Up on the Energy Mess

April 05, 2001|GEORGE SKELTON

SACRAMENTO — Tonight, Gov. Gray Davis finally will do what advisors have been urging since January: go on TV and talk directly to Californians about the energy fiasco.

Based on what he told a state Democratic convention Saturday, Davis' five-minute spiel will sound something like this:

Here's what happened: I inherited the mess. For 12 years, not one major power plant was built. And there was a massively flawed deregulation scheme.

Here's what we're doing: We've kick-started the plant approval process. Six are under construction. We've moved heaven and earth to generate more power, increase conservation and save the utilities. We've signed lower-priced, long-term energy contracts to stabilize supply. We're creating a public power authority to produce our own electricity--to ensure that we are never again held hostage by these out-of-state generators.

Here's what you can do: conserve. We need every Californian to cut back at least 10%. That's not hard. My wife last month cut 38%.

The idea tonight is to slice through the confusing clutter of information and succinctly summarize for people what's going on. Reassure them Sacramento is trying to fix it, but emphasize they also need to pitch in. Instill confidence. Like an FDR fireside chat. Problem is, Davis isn't known for being much of a chatterer.

Advisors have been pressing him for weeks to go on TV--live from the governor's office, flags in the background. Look like a leader.

The governor has been waiting for good news to report. Hoping to announce the successful completion of negotiations to buy the utilities' transmission lines. That won't happen tonight.

Davis could announce some gloomy numbers he disclosed Tuesday to Senate Democrats: The state has doled out $3.8 billion since January to buy electricity for the strapped utilities. It's spending up to an incredible $60 million per day.

Less gloomy news: The state has signed contracts to buy $42-billion worth of electricity years into the future, at an average cost of less than 7 cents per kilowatt. That's roughly one-quarter the spot market price Wednesday.

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The bad news for consumers: Davis will admit tonight that something like the big rate hike adopted last week by the Public Utilities Commission is necessary.

I'll fight to protect those least able to pay. Reward those who conserve the most. 'Motivate' the biggest guzzlers to cut back.

One of the last holdouts against a rate increase, Davis still hasn't taken a public position on the roughly 40% hike pushed last week by his handpicked PUC president, Loretta Lynch. The governor and top aides insist he didn't even know about Lynch's plan until reading about it in The Times.

Lynch agrees: "I did not talk to him specifically about my proposal."

She acted, the PUC leader says, because higher rates are needed to ensure that state bonds will be repaid. These are bonds needed to reimburse the state for the electricity it is buying. "I thought we should act--the sooner the better--to safeguard the [state] general fund."

Democratic consultant Darry Sragow, who now is advising power companies, says Lynch's action was essential to cure a sick energy system. "The intestinal blockage has been removed."

Lynch has become a Republican punching bag, an inviting target because she's a former Democratic campaign strategist and Bill Clinton aide.

"I didn't have an energy background when I took this job a year ago," the lawyer notes, "but I sure do now. It doesn't take an economic degree to understand what's wrong with this market: Lax rules, not enough regulation and people gouging us. . . .

"Even a blind pig can see that these [generator] folks are making too much profit."

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Davis was urged at a Senate Democratic caucus Tuesday to get tough with the power profiteers. Seize a plant or two. At least seize their power. "This is no different than dealing with the schoolyard bully," said Sen. Don Perata (D-Alameda).

The governor replied that he needed evidence of "egregious" behavior. Also, the generators might retaliate by pulling out of California.

"It's a gigantic game of chicken," says Sen. Debra Bowen (D-Marina del Rey), who heads the Senate Energy Committee. "We look weak."

Davis also was prodded to barnstorm the state selling his energy plan, as he did education reforms. But as Senate leader John Burton (D-San Francisco) notes: "Selling education is like selling ice cream. Selling people on this is like selling castor oil."

The castor oil salesman will be on most TV stations at 6:05--several weeks late. Assuming there's not a blackout.

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