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American Morning

California Energy Crunch: Governor Gray Davis to Testify Before Congress

Aired June 20, 2001 - 09:00   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.
DARYN KAGAN, CNN ANCHOR: A lot going on this morning. We're going to start talking about energy prices and politics. About 30 minutes from now, a high-profile hearing gets under way on Capitol Hill on runaway power prices in the West. California Governor Gray Davis and federal regulators will come face-to-face at this hearing and get ready for the sparks to fly.

CNN congressional correspondent Kate Snow joining us, live now, from Capitol Hill.

Kate, good morning.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Daryn.

I sat down with Governor Davis last night. He tells me he's ready for some tough questions this morning and there certainly will be those. You mentioned about a half-hour from now, the Governmental Affairs Committee of the Senate starts a hearing that's led by Senator Joseph Lieberman, a Democrat, of course. That committee examining the role of the Federal Energy Regulatory Commission, also known as FERC, in this power crunch and trying to figure out what they can do. Those federal regulators on Monday extended an order allowing for price control measures to be extended in California and in other western states.

Governor Davis tells me that he'll tell the committee that it's a good first step, but it's not enough.

(BEGIN VIDEO CLIP)

GOV. GRAY DAVIS (D), CALIFORNIA: They took over a year to do what by law they should have done last November and now they need to do step two. They took step one, wasn't quite what we wanted, but it did provide us relief going forward. Now step two is to reimburse us for all the overcharges we were forced to make the last year while they were sleeping while we were complaining.

(END VIDEO CLIP)

(AUDIO GAP)

SNOW: ... has been under increasing political pressure. New ads on television, running in California right now, target him specifically.

(BEGIN VIDEO CLIP, AMERICAN TAXPAYERS ALLIANCE AD)

ANNOUNCER: He's pointing fingers and blaming others. Gray Davis says he's not responsible for California's energy problems. After all, the Public Utilities Commission blocked long-term cost-saving contracts for electricity. But who runs the PUC, the people Gray Davis appointed -- Loretta Lynch and other Davis appointees who left us powerless. That's why newspapers say Davis ignored all the warning signals.

(END VIDEO CLIP)

SNOW: Now, the ads go on to blame Governor Gray Davis. They are sponsored by the American Taxpayers Alliance, a grassroots group with over 10,000 donors, including, by the way, Public Utilities.

I asked Governor Davis what he thought of those ads.

(BEGIN VIDEO CLIP)

DAVIS: I think Californians are galled by this because the very energy companies that bilked us out of $55 billion are not satisfied that the Federal Energy Commission has told them they have to make less money and they're retaliating by attacking me. My job is to stand up and fight for 35 million people. And if they think they're going to shut me up, they've got another thing coming.

(END VIDEO CLIP)

SNOW: Governor Davis says he'll tell Congress that he's part of the solution, that he's getting more electric generating power plants on-line in California. He says they'll have enough energy to suit their needs by the fall of 2003. Don't expect that, though, to appease his biggest critics -- back to you, Daryn.

KAGAN: Kate Snow on Capitol Hill -- Kate, thank you.

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