Davis seeks federal power assistance

February 27, 2001|By ERIKA BUCK, Special to this newspaper

WASHINGTON (MNS) — Gov. Gray Davis sought federal support Monday for plans to lift California out of its energy crisis and build new transmission lines.

In Washington for the National Governors' Association meeting, Davis met with several governors and Bush administration officials in an effort to address the shortage of power lines, a problem that has exacerbated California's crisis and that many say will soon cause shortages in other parts of the country.

Several governors, including Davis, stressed the importance of new transmission capacity at a meeting to discuss national energy policy with Energy Secretary Spencer Abraham, Environmental Protection Agency Administrator Christine Todd Whitman and Interior Secretary Gale Norton.

Arizona would like to sell its excess electricity into the California market, but the transmission lines between the two states are ‘‘already full of electrons,'' Davis said. A shortage of north-south-running power lines prevented California from transporting badly needed energy to the northern part of the state during the recent crisis, Davis said Friday.


Davis said he would seek federal funding for new lines.

‘‘If we're going to have a strong economy in this country, we have to have the electricity to power it,'' he said. ‘‘We have to not only build new plants but expand transmission lines so that you can move the electrons where they're needed.''

Though the federal government recognizes there is a shortage of transmission capacity, federal funding for transmission lines is uncharted territory, according to Pietro Nivola, an energy expert with the Brookings Institution.

‘‘The federal government isn't in the business of building power lines,'' he said.

The government's role in rural electrification in the 1930s, Nivola said, could have some use as a precedent for what is being proposed today.

Strict budget constraints, a result of Bush's $1.6 trillion tax proposal, mean Davis may have a hard time winning federal funding, Nivola said.

Abraham has expressed opposition to Davis' plan to purchase transmission lines run by the state's utilities as a way of helping the utilities avoid bankruptcy.

Davis last week announced a deal with Southern California Edison to purchase the utility's portion of the transmission grid for $2.76 billion. For the deal to move forward, the state must strike a similar deal with Pacific Gas & Electric, but the utility thus far has resisted any purchase.

Davis defended his plan, which he will discuss in a meeting with Abraham scheduled for today.

‘‘It is our best practical thinking as to how we can re-infuse the utilities with cash and still obtain an important asset,'' he said. ‘‘It is my hope and belief … that he will understand and be supportive of our efforts to revitalize the utilities.''

Davis also is seeking the support of the president's new task force on national energy policy, headed by Vice President Richard Cheney.

‘‘I think that team's assessment of the progress we're making will have a lot to do with how Washington responds, including the (Federal Energy Regulatory Commission),'' Davis said. ‘‘The Bush administration clearly understands the need for a national energy policy. And they understand that transmission lines, as well as new generation are key components.''

Davis was scheduled to meet with financial analysts in New York on Wednesday, ‘‘to let them know we're making progress.'' Many analysts have downgraded the California utilities' bonds to junk status, making it difficult for the utilities to raise capital and, in effect, pushing the utilities closer to bankruptcy.

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