SACRAMENTO, Calif., May 17, 2001—Governor Gray Davis today made the following comments in response to President George W. Bush’s release of his national energy plan, which was prepared by Vice President Dick Cheney:

“First of all I want to commend President Bush for facing up to America’s energy crisis. I agree with him that we need more supply. That is why during my two and half years in office we have licensed 15 new plants; 10 are now under construction and 4 will be on-line this summer. That is in sharp contrast to the 12 years that proceeded me, where not a single major power plant was built in this state. But I fault the President for not providing California with any immediate relief. California is the only state in America that has faced blackouts and astronomical electricity prices.

“We are literally in a war with energy companies who are price gouging us. Many of those companies are in Texas. Mr. President, you didn’t create this problem, but you are the only one who can solve it. With all due respect Mr. President, Californians want to know whether you’re going to be on their side.

“I do believe conservation is an important part of the message as well. We in this state are now the number one most electricity efficient state. The President this morning said we were number two, but we’ve now become number one. Having said that, we’re not resting on our laurels because we can’t afford to rest on our laurels. We have $850 million worth of incentives for savings this summer by individuals and businesses. It’s cheaper for us to pay companies and individuals to adopt energy-saving devices in their homes or businesses then to buy the power we otherwise would have to on the exorbitantly expensive spot market.

“So I believe the appropriate response by the President ought to be that we’re going to find a way to give California some relief over the next two years. We know California is building and conserving its way out of this problem. But the prices being charged for energy are literally dragging down our economy and will adversely affect America’s economy without some relief soon.

“I have joined the governors of Oregon and Washington in calling upon the Federal Energy Regulatory Commission for some form of temporary price relief while we get our plants on-line. I would like to note that Texas earlier this year adopted a form of price relief where they limited the amount energy producers could bid for energy on their ancillary and reserved power. That relief runs for two years. So if Texas can have some kind of price relief, I think California is entitled to price relief.

“Again, Mr. President, I know you have a lot on your plate, but this issue started well before I became Governor. It started well before you became President. By not doing anything, you’re allowing the price-gouging energy companies, many of whom reside in Texas, to get away with murder. Californians shipped $27 billion out of this state last year for electricity. That’s after paying $7 billion the year before. This year the costs are estimated to range between $50 and $60 billion. By doing nothing, that’s what’s going to happen to Californians. I know you don’t want to see that happen. Believe me, I don’t want to see that happen. So I am once again calling on you to find some creative way to give us temporary price relief while our new plants come on-line – at which time we’ll be happy to let the market function.

“With that I want to make just one or two other remarks about QFs. The FERC, Federal Energy Regulatory Commission ruled yesterday in a way that “appeared” to give California relief, but again it was another Trojan horse. I had written the Federal Energy Regulatory Commission saying, ‘Listen, we are negotiating with these Qualifying Facilities and 90% of them are back on-line providing power to us within the constraints of their contractual obligations. Do not give them the opportunity to break those contracts so that we have to pay much more on the spot market for that very same power.’

“The Federal Energy Regulatory Commission refused to order that the contracts be broken. It’s questionable whether they had the power to do it in the first place. But then they said, ‘All government agencies, however, must expedite the sale of power through the spot market if the Qualifying Facilities can get a court to invalidate their contract.’ So again, they give with one hand and take with the another, and are not being helpful.

I said to them, ‘Please read the Hippocratic Oath’ – First do no harm. If you can’t give us price relief, just go home.'”

Further information is available from the Governor’s web site at https://governor.ca.gov/.