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American Morning

California Energy Crunch: Governor Gray Davis Goes Head-to-Head With FERC

Aired June 20, 2001 - 10:01   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 ANCHOR: We're going to begin this hour on Capitol Hill, where that hearing is under way to assign blame and seek out possible answers to California's ongoing power crisis.

Sparks are expected to fly, in part because the state's top Democrat, Governor Gray Davis, is going to face off for the first time with all five members of the GOP-led Federal Energy Regulatory Commission. That agency has denied Davis' proposals to ease his state's plight.

Our Jeanne Meserve is in Washington. She's got more on this for us right now -- good morning, Jeanne.

JEANNE MESERVE, CNN CORRESPONDENT: Good morning, Leon.

And some of the sparks already flying. This hearing may be as much about political power as it is about the nation's power supply.

As you mentioned, California Governor Gray Davis, a Democrat, is the star witness today before the Senate Governmental Affairs Committee chaired by Senator Joseph Lieberman. Gray is expected to lay most of the blame -- excuse me, Gray Davis is expected to lay most of the blame at the federal government's feet for the skyrocketing fuel prices in California. But Republican lawmakers are determined to make sure Davis bears his share of the responsibility.

(BEGIN VIDEO CLIP)

SEN. FRED THOMPSON (R), TENNESSEE: For Governor Davis, the answer is simple. A bunch of Texas cowboys got down at the coral and decided they were going to take advantage of helpless California. And we're seeing the results of it.

In fact, we've seen no shortage of villains. The governor, at one time or another, has blamed federal regulators, state regulators, the president, suppliers, the former governor and a bankrupt public utility. However, I think we need to cast our net a little wider. Clearly, there are other factors at play.

(END VIDEO CLIP)

MESERVE: Governor Davis will get a chance to respond later this morning, as will members of the Federal Energy Regulatory Commission. The FERC on Monday announced plans to place limited controls on the price of electricity in California. That action prompted those calling for strict price caps to back off. The new demand by Democrats is to push for refunds to compensate rate-payers -- Leon, back to you.

HARRIS: All right, thank you, Jeanne. We'll check back with you in just a few minutes.

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