Emissions

Bush undeterred by Davis appeal on price caps


By the OGJ Online Staff

HOUSTON, May 29, 2001 — Speaking in Los Angeles, President George W. Bush rejected federal price caps as a solution to California’s power crisis Tuesday and called for an end to finger pointing and “blame shifting” prior to a meeting with Gov. Gray Davis.

He also assured Davis that he will honor a commitment to uphold the moratorium on new drilling leases off the coast of California.

Davis has unsuccessfully appealed to the federal government to impose price caps on electricity prices this summer. Democrat Davis has been mentioned as a possible challenger to Bush in the 2004 election, but the state’s electricity problems have cost him support with voters. Bush traveled to California to shore up support for his energy policy and give California Republicans a boost.

“We will not take any action that makes California’s pricing problems worse,” Bush said. “And that’s why I oppose price caps. Price caps do nothing to reduce demand, and they do nothing to increase supply.” While price caps may be appealing at first blush, Bush said the result will be more serious shortages accompanied by even higher prices.

Speaking to the Los Angeles World Affairs Council with Davis among the guests, Bush said the administration will help California through the difficult months ahead guided by a “simple” test.

“Will any action increase supply at fair and reasonable prices? Will it decrease demand in equitable ways? Anything that meets that test will alleviate the shortage, and we will move swiftly to adopt it. Anything that fails that test will make the shortage worse,” he said.

Bush touts policy
Bush said if the nation’s energy supply is unreliable or affordable, the economy cannot thrive. “For too long, America has neglected energy,” he said. “The neglect ends now.” He said the administration has made more than 100 recommendations to promote conservation, expand energy production, improve energy transmission, and protect the environment.

“We put conservation first because we have seen the important difference conservation can make,” he said. While the US economy has grown 126% since 1973, adjusted for inflation, energy use has grown by just 30%. To add $1 to the gross domestic product takes only about a half as much energy as it did 30 years ago, he said.

However, Bush noted conservation slowed in the 1990s. Even California’s record as a conservation leader, one of the most energy-efficient states in the union “was not by itself enough to keep pace with your growing demand,” Bush said. The president touted new technologies to ensure new supply is produced cleanly and with respect for our environment.

Bush emphasized the need for new supplies and said the administration has worked with Davis and California authorities to speed the approval of new power plants, expand electricity production, and increase the flow of natural gas into the state.

He also said the administration “takes very seriously our responsibility to make sure that companies are not illegally gouging consumers.”

Earlier, Bush delivered a speech and recounted administration initiatives to help the state, including:

• Reported a $150 million initiative to help low income consumers pay energy bills this summer. He will ask congress to approve extra spending for this fiscal year, ending in October.

• Estimated federal conservation efforts will save the state at least 76 MW/hour during peak periods.

• Noted the Department of Energy will encourage construction of new power lines running from south to north in the state to relieve transmission constraints.