Dan Walters: Politicians seek shelter as energy Armageddon looms

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Dan Walters: Politicians seek shelter as energy Armageddon looms

(Published April 4, 2001) There's been a subtle but unmistakable shift in the political atmosphere that envelops California's energy crisis.

Politicians have concluded that the crisis is largely beyond their control and the die is more or less cast. Whatever fate decrees - massive summer blackouts, soaring utility bills or even the bankruptcy of the state's utilities - will happen, and politicians from Gov. Gray Davis downward are scrambling to insulate themselves from voters' anger and single out rivals for blame.

No one is saying that publicly, of course, but the fatalistic mood is very apparent in the Capitol, whose denizens have dropped their preoccupation with energy and moved to other matters. Legislative committees are working on the hundreds of bills that had been stalled for three months while the special committees that had been holding almost daily sessions on the energy crisis have gone into semihibernation.

Last weekend's Democratic state convention in Anaheim was dominated by fears that when the crisis hits home, the party's dominance of the Capitol will backfire. "Just remember Jimmy Carter," state Controller Kathleen Connell warned fellow Democrats, adding that they will have "no excuses" for perceived failure to deal with the crisis forthrightly. "We will be accountable on Election Day 2002," she said.

Next year's elections are very much on Davis' mind, since he'll be seeking a second term and polls indicate that his approval ratings have declined sharply in recent weeks. He devoted much of the weekend to defending his actions, saying, "I believe we've moved at warp speed to address this problem," and trying to pin blame on Republicans.

Republicans, meanwhile, sense that the crisis gives them an avenue of escape from the dungeon of irrelevancy to which they had been exiled by heavy losses in the last three elections. The only remaining statewide GOP officeholder, Secretary of State Bill Jones, is running for governor by accusing Davis of mismanagement, and Republican Assembly members dumped their leader, Bill Campbell, on grounds that he had been insufficiently aggressive vis-a-vis Davis.

The political positioning reflects the reality that the crisis shows every sign of worsening. Although Davis' office is distributing a brochure entitled "Meeting the Energy Challenge" to defend the governor's actions, it's apparent that none of the steps the governor has taken is bearing much fruit.

The state is spending at least $50 million a day on emergency power purchases, but what was supposed to be a short-term program has evolved into a monthslong drain on the state's rapidly shrinking budget reserves. The long-term supply contracts that were supposed to replace daily spot purchases have bogged down, and without firm contracts and a revenue stream to pay for them, Wall Street is reluctant to market the bonds the state wants to float. Many authorities now believe Davis' decision to step into the power purchase market in January was a strategic error because it gave power suppliers a deep new pocket to tap just as the utilities themselves ran out of credit.

Davis, meanwhile, is refusing to embrace a rate increase approved by the state Public Utilities Commission, which sends a mixed message to Wall Street, and efforts to resolve problems with unpaid bills from power generators and have the state acquire the utilities' intercity transmission grid have stalled, perhaps permanently.

The crisis may careen totally out of control as summer arrives, raising the specter of elderly and/or ill Californians dying from having their air conditioners or medical equipment shut down. And the utilities are closer to bankruptcy now than at any other point in the nearly yearlong crisis.

Plan A isn't working, and there is no Plan B - except for bankruptcy. With Armageddon looming, politicians have retreated into the bunker, hoping to protect themselves from what could be a firestorm of anger.

The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.com.


-- Martin Thompson (mthom1927@aol.com), April 04, 2001

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