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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Libbyt who wrote (2923)	4/5/2001 9:50:40 PM
From: gamesmistress	Read Replies (1) \| Respond to of 23153

2 out of 3 ain't bad...:-) Davis Endorses Rate Hikes, Defends Handling of Energy Crisis From Associated Press SACRAMENTO -- Gov. Gray Davis, addressing Californians in a televised speech Thursday night, for the first time endorsed rate increases for customers of two strapped utilities, urged conservation to fend off blackouts this summer and defended his handling of the energy crisis. Speaking from his Capitol office, Davis also lashed out at federal regulators for refusing to cap soaring wholesale electricity prices that have driven the state's two largest utilities close to bankruptcy. "In January, with the feds still refusing to do their job, California stepped in to purchase the power the utilities could no longer afford to buy," Davis said. "We didn't take over to save the utilities. We took over to keep the power on and the economy strong." Davis, who repeatedly has said the state can resolve the power problems without rate hikes, told viewers he now thinks rate increases are necessary. His new stance comes after the state Public Utilities Commission last week approved rate increases of up to 46 percent for customers of Southern California Edison and Pacific Gas and Electric Co. Davis said the state's short power supply and high wholesale costs are the result of a "flawed deregulation scheme" signed into law in 1996 by then-Republican Gov. Pete Wilson. "But no matter how we got into this mess, you hired me to solve problems and that's what I'm doing," he said. Davis said he will propose a tiered rate plan that will mean a 26.5 percent rate increase for the average Edison or PG&E customer. Under the governor's plan, the heaviest power users would see an average 34.5 percent rate increase. "The more you use, the more you pay," he said. "Conservation is our best short-term weapon against blackouts and price gouging." Davis-- facing mounting pressure from Republicans and fellow Democrats to resolve California's energy crisis-- delivered the live, five-minute speech from behind a desk, with his hands clasped in front of him. He assured residents that the state would survive the crisis. "We are Californians. We've withstood earthquakes, floods, fires and droughts," Davis said. "Yes, this is man-made, but with your help and God's blessing, we'll get through this as well." He said he would stand by his plan to help restore the utilities to financial health by negotiating state acquisition of their transmission lines and requiring them to sell low-cost power to the state for a decade and drop their lawsuits seeking to double their electric rates. Davis urged Californians to help cut power use 10 percent to fend off rolling blackouts this summer, when residents will crank their air conditioners and demand will rise sharply. The Legislature on Thursday afternoon sent Davis proposals that would spend $1.1 billion on conservation programs for consumers and businesses. Davis plans to sign the measures. He listed actions he has taken to try to solve the power crisis, including negotiating long-term contracts to purchase power and buy the utilities' transmission lines. Davis also said he has cut red tape and provided incentives to speed construction of power plants. "We can't fix 12 years of inaction overnight. But we're making real progress," he said. The speech, the first such message Davis has delivered besides his annual State of the State address, came at a time when Republicans and members of his own party are criticizing the governor's handling of the crisis and consumers have threatened a revolt at the ballot box in 2002, when Davis is up for re-election. According to the Davis administration, the governor's plan would let Edison, PG&E and the state's third investor-owned utility, San Diego Gas & Electric, to make a total of $8 billion in debt payments over a decade. Davis' plan would shift the burden of the PUC rate increase to heavier residential, commercial and industrial power users while largely sparing agricultural users, who would only see increases of 5 to 15 percent. The three utilities say they have lost more than $14 billion since June due to soaring wholesale power costs. More than $13 billion of that comes from Edison and PG&E, who have been barred under the state's deregulation law from recovering the rising costs from their customers.