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CNN Live Sunday

Bush Focuses on Long-term Solution

Aired May 13, 2001 - 18:01   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.
STEPHEN FRAZIER, CNN ANCHOR: We're going to begin with a look at California and its energy troubles. Today Governor Gray Davis called on the Bush administration for help after a week plagued with days of rolling blackouts. But the White House says California must fend for itself. CNN White House correspondent Kelly Wallace has that story.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN CORRESPONDENT (voice-over): There are no short-term fixes, President Bush says, to deal with rising prices at the pump and rolling blackouts in California. But California's Democratic Governor Gray Davis wants the Bush administration to do more and order a temporary cap on energy prices in his state.

GOV. GRAY DAVIS (D), CALIFORNIA: We're being obscenely gouged by price gougers out of Texas and the southwest.

WALLACE: Davis cited Reliant Energy, based in Houston, Texas, which he says charged $1,900 a megawatt-hour last week, compared to $30 for the same amount of energy last year.

DAVIS: It's a big, big buddy of President Bush and Vice President Cheney, and they can't just sit back there and say: Hey, it ain't our problem.

WALLACE: The reason for the higher price, the company says, is because it is using more expensive plants and because it is concerned that California's utilities won't be able to pay their bills. As for Mr. Bush, he and most of his fellow Republicans believe that price caps would make the situation in California far worse, by discouraging increases in supply at a time of escalating demand.

REP. DENNIS HASTERT (R-IL), HOUSE SPEAKER: Even a freshman in college who is studying economics knows that if you cap the cost of being able to recoup your investment, that people who want to invest aren't going to do it.

WALLACE: Some Democrats say the president, a former oilman, should ask the Federal Trade Commission to investigate rising prices and record profits for the oil industry.

SEN. JOE LIEBERMAN (D), CONNECTICUT: The top three oil companies in America made more than $10 billion in profits in the first three months of this year. WALLACE: Aides say Mr. Bush has asked federal agencies to be vigilant, to make sure there is no price gouging going on.

(on camera): If prices keep rising though, there may be more political pressure on the administration to do something, because it's long-term plan of conservation and production may not satisfy consumers, especially in the nation's largest state, California.

Kelly Wallace, CNN, the White House.

(END VIDEOTAPE)

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