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American Morning

Senate Set to Begin Debate Over Bush Tax Cut Package

Aired May 16, 2001 - 10:07   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN CORRESPONDENT: Well, turning from the uncertainty of death to the volatility of taxes: The Senate is expected to begin debate tomorrow on President Bush's tax cut package. The Senate Finance Committee has given its approval to the 11-year reform which would trim more than $1.33 trillion from the tax rolls. A final Senate vote is expected to come on Monday.

Power customers in California are recoiling from another electrical shock today, power costs that will soon skyrocket as much as 80 percent. State regulators approved a plan yesterday that will help the state recover some $6 billion spent to keep the lights on and more rate increases could loom as close as the summer haze and as ominously as the threat of more blackouts.

CNN's Kathleen Koch explains.

(BEGIN VIDEOTAPE)

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): More hot and dark days than even California officials had predicted, that's what the industry group the North American Electric Reliability Council says is in store this summer for the Golden State.

TOM GALLAGHER, NORTH AMERICAN ELECTRIC RELIABILITY COUNCIL: NERC expects to see rotating blackouts throughout California for about 260 hours across the summer. That's about 10 percent of the summer hours. That's about 15 hours per week.

UNIDENTIFIED CALIFORNIAN: I think it's crazy. We pay our bills. We should always have lights on no matter what.

KOCH: Other potential trouble spots, the Pacific Northwest, New York City, New England and Texas. A severe drought in the Pacific Northwest is reducing hydroelectric capacity there. New York City may see summer power outages because new combustion generators may not be ready in time. New England has little backup capacity if demand soars. And potential disruptions could come in Texas when it centralizes control of its electricity grid this summer.

Still, the Council says the rest of the country should have enough energy to meet the expected 3.6 percent increase in demand. But experts caution it's the unexpected that could cloud that bright forecast -- severe drought, heat waves or mechanical breakdowns. LLEWELLYN KING, PUBLISHER, "ENERGY DAILY": We'll lose a big generating plant from the result of heat or stress and that could change the spectra.

KOCH: The Council does forecast demand in California will start to drop in response to higher power rates and conservation. Environmentalists hope it won't take blackouts for the rest of the country to change its habits.

DEBBIE BOGER, SIERRA CLUB: We need to solve our energy problems with energy efficiency, renewable energy and responsible additions to our energy supply.

KOCH (on camera): The addition energy producers would like to see is a body to make regions work together to cover each other's electricity shortfalls. The Energy Council says with competition for electricity, cooperation is sometimes in short supply.

Kathleen Koch for CNN, Washington.

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