Bush plan ignores 'price-gouging,' Davis says

Gray Davis

SACRAMENTO, California (CNN) -- President Bush's energy policy blueprint drew a swift thumbs-down from California's governor, who said Bush is ignoring "price-gouging" by power suppliers.

Gov. Gray Davis said Bush has "turned a blind eye" to California, which has battled periodic rolling blackouts all year.

"Mr. President, you didn't create this problem, but you are the only one who can solve it," he said. "With all due respect, Mr. President, Californians want to know whether you are going to be on their side."

Davis repeated his call for temporary price controls Thursday to stabilize the soaring cost of electricity in California, much of which comes from energy producers based in President Bush's home state, Texas. The White House has rebuffed earlier calls for price controls.

Davis said generators are manipulating California's deregulated power market to gouge state consumers.

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"The energy companies have an incentive to withhold power, wait 'til the last minute and drive up their prices," Davis said. "The price is going up, the product isn't getting any better and the service isn't getting any better."

Davis said Californians paid $7 billion to out-of-state generators in 1999 and $27 billion last year. That cost is expected to hit $60 billion this year.

The White House has said it has done everything California has asked for except impose price controls, which the administration said would make matters worse.

California has itself to blame, vice president says

Earlier this week, Vice President Dick Cheney said California has only itself to blame for ignoring its growing need for generating capacity.

"I think the governor should really focus on California's problems and not try to throw the blame elsewhere," Cheney said.

Davis said California has 10 power plants under construction and another five have been approved since he became governor. Four are expected to be on line by summer.

"We will be out of this problem by the end of 2003. I'm doing my part in building new plants -- no state in America is doing more," Davis said. "Plus, we are already the most energy-efficient state in America.

"What I need from the president is some relief from the astronomical prices that Californians are paying for electricity," Davis added.

"It's not right to bleed this state dry, which has contributed disproportionately to the American economy over the past couple of years," he added. "It's not making America richer, it's just making Houston richer."

The state's deregulated utilities have lost billions of dollars as wholesale energy prices have gone up -- while California's deregulation law limits their ability to raise rates. The state's largest utility, Pacific Gas and Electric, filed for bankruptcy in April.