*  from Govt Affairs


> Governor Gray Davis held a well-attended press conference at the Capitol
> today to discuss his reaction to President Bush's energy plan.  In reading
> his prepared statements, Davis spoke as if directly to President Bush and
> FERC.  Davis later answered questions from reporters.
> 
> The Governor began the press conference by saying he commended the
> President for "facing up to America's energy crisis."  However, he added,
> "I fault the President for not providing immediate relief for
> California...[which is] in a war with price-gouging energy companies--many
> of them are in Texas."  Davis said that the President needs to be "more
> creative" in his solutions to the energy crisis.
> 
> Davis also applauded the President's focus on conservation in his energy
> plan.  Davis said, "[California has] $850 million worth of incentives for
> individuals and businesses...to adopt energy-saving measures in their
> homes and businesses."  He added that California is the number one state
> in per capita energy conservation.
> 
> Davis said he had joined with the governors of Oregon and Washington on
> calling for temporary price caps for the Western states.  He explained
> that "Texas earlier this year adopted a temporary form of price relief,"
> and asked why California couldn't do the same.  Davis also said one of the
> incoming FERC commissioners is the former head of the Texas PUC, "so there
> has to be a way that California can get temporary price relief."
> 
> Davis said of President Bush, "by not doing anything, you are allowing the
> price-gouging energy suppliers to get away with murder."
> 
> On the subject of FERC's recent ruling on QFs, Davis said, "it appears to
> give California relief...but is another Trojan horse." He explained, "FERC
> refused to order the contracts be broken...but the effect that will be
> caused allowing them to re-sell the power if they're relieved of the
> obligation to provide it to utilities is that Californians will have to
> pay [for QF power] on the spot market."  Davis said that FERC was "giving
> with one hand and taking away with the other."  He added, "If [FERC]
> can't give us price relief, just go home."
> 
> One suggestion Davis gave for FERC being more creative was to "take a much
> more aggressive approach in ordering..massive, 50% refunds to taxpayers."
> Davis added that "this is an idea I've discussed with [Bush FERC nominee]
> Pat Wood of the Energy Commission."
> 
> Davis urged the President to work with FERC to help California saying,
> "The President didn't create this problem, but is the only one who can
> instruct his appointees"
> 
> He added, "I told the generators face-to-face, your fate is in your
> hands."  He added, "I said to them: If you don't work with me this summer,
> I will sign a windfall profits tax!"
> 
> In response to a question on the merits of federal preemption vs. States'
> rights and eminent domain for power plants and power lines, Davis
> reponded, "I'm going to duck that question."  He added, "here's why: the
> federal government...on the big issues, has been distinctly unhelpful."
> Davis said he was "inclined to say that more federal power" in this matter
> would not help the situation.
> 
> In response to a question on the viability of deregulation, Davis said,
> "In fairness, we don't have true deregulation in this state--I am trying
> to make something work that is unworkable."  He added, "deregulation is
> not a religion, it's a theory."  Davis said, "according to Allen
> Greenspan, deregulation only works if there is 15% supply above demand"
> and this is not the case in California.
> 
> Davis criticized the Federal Energy Regulatory Commission and said,
> "Everyone on that commission has forgotten that third word
> "Regulatory"--they found out the prices are unjust and unreasonable and
> did nothing."
> 
> In response to a reporter's question on whether Davis believes President
> Bush will come through for California, Davis responded, "I believe the
> President may well in the end do the right thing for Californians...I
> believe he will be creative in his solutions."
>