Davis warns of economic crisis

verfasst von Sascha, 29.05.2001, 13:42

Davis to warn Bush of economic crisis on California visit
May 28, 2001 Posted: 8:15 p.m. EDT (0015 GMT)

SACRAMENTO, California (CNN) -- California Gov. Gray Davis will tell President Bush <font color="#FF0000">the nation's economic health could be threatened if Washington doesn't move to restrain electricity costs</font>, Davis aides said.

Davis is urging the White House to impose short-term price controls on wholesale electricity rates, a move Bush has long opposed.

<font color="#FF0000">"California drove the economic boom of the last eight years, and it could drive it down just as easily," </font>a Davis aide said. California's Democratic governor hopes to impress on Bush that as president,"he is the only person with the power to help the people of the state of California," the aide said.

Bush and Davis are scheduled to discuss the California energy crisis at a 20-minute meeting Tuesday afternoon in Los Angeles.

Davis has called for six to seven months of price controls on electricity; enough to get through the summer heat and give operators enough time to get four power plants, now under construction, on line.

Bush and Vice President Dick Cheney, both former oil executives, have argued that the free market, not price controls, should be trusted to lower energy prices. Both men have cited California's troubles to support their plans to boost long-term energy supplies, but critics -- including Davis -- say the administration blueprint ignores immediate problems.

Davis has railed against"price-gouging" by out-of-state electricity producers, particularly those based in Bush's home state of Texas. 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, Davis said earlier this month.

The troubles have hurt Davis' own political standing: A recent Public Policy Institute poll gives Davis a job approval rating of 46 percent in California, versus a 57 percent approval rating nationwide for Bush.

The state's largest privately owned utilities have been hammered by skyrocketing wholesale electricity prices and the <font color="#FF0000">state's 1996 electric deregulation law. Wholesale electric prices are roughly 10 times higher than last year, but deregulation limited rate increases to consumers. </font>

<font color="#FF0000">The result has cost California's largest utilities billions of dollars and resulted in periodic rolling blackouts since January. The largest utility, Pacific Gas and Electric, filed for bankruptcy protection in April. </font>

Quelle: http://www.cnnfn.com

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• Davis warns of economic crisis - Sascha, 29.05.2001, 13:42