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Davis touts energy news

The day he announced the launching of his re-election publicity campaign, California Gov. Gray Davis released a light over the horizon to combat his nemesis issue – the state’s power crisis.

The governor reported the state spent less in June than it has in the last six months. The $1 billion price tag amounts to $100,000 less than state officials had predicted. The wholesale rates break down to $167 per megawatt hour. In contrast, the state spent $332 in January.

“One reason the prices are coming down is we’ve contracted for power ahead,” Davis said in a conference call with reporters Friday.



Pitching a more manageable state energy system – once determined as dysfunctional by the Federal Energy Regulatory Commission – should translate into increased consumer confidence too, he added.

Although Lake Tahoe residents are linked to a Nevada utility company, many tourism-based businesses like the Nevada casinos rely on this optimistic economic view from California visitors to fill rooms on both sides of the border.



“In some small way, being able to trim down the cost of power has got to be good for Tahoe residents,” the governor said.

Increased power supplies have also added to the state’s improved energy system, Davis said. The Sunrise facility outside Bakersfield went on line 10 days ago. The Los Medanos in Pittsburg power plant switches on today.

Beyond the additional generation the state is tapping into, Davis also pinpointed conservation efforts, with energy consumption dropping by 11 to 14 percent in the last two months.

“The people have responded heroically to our call for conservation,” he said. He took credit for his administration’s business incentives like tax credits for the installation of energy-efficient devices as one of the reasons the efforts have worked.

Davis recognized the hardship on all the Golden State’s residents and told them to be reassured of a new day ahead for California’s power situation as “plans are on track to provide reliable and affordable power” to the state.

Sure, California residents have a long summer ahead with expected occasional blackouts, he said, but the pain should be minimized with the state’s new plan of attack and wholesale price caps imposed by FERC.

He scoffed at critics blaming the price caps on the Las Vegas blackout that occurred a week ago, accusing the claim as more propaganda from energy generating companies trying to “squeeze every dime out of California.”

The efforts to stem the tide in wholesale power prices didn’t materialize overnight, Davis recounted.

“Make no mistake. The reason for the price mitigation is from constant pressure from federal and state officials,” he said. “This didn’t happen from the goodness of their hearts.”

Davis’ hard-line stance against the generating companies like Houston-based Reliant Energy, a political salvo for the governor, beckons a call for FERC to decide whether the power sellers gouged the state by as much as $9 billion in overcharges.


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