- The Washington Times - Sunday, June 16, 2002

LOS ANGELES A year ago, California was in the grip of an alarming crisis one that went to the very heart of modern civilization.
There wasn't enough electricity to go around, power companies were threatening to shut off the lights and experts were making apocalyptic predictions about a summer without electricity for the nation's most populous state.
Today, that seems like nothing more than a bad dream. There appears to be ample power to keep Californians cool, albeit at higher prices, and state power officials say it would take a devastatingly hot summer even to strain the once fragile power grid. State Republicans, however, are counting on Californians to have a long memory.
Going into the gubernatorial election campaign in the fall, Republican candidate William E. Simon Jr. is planning to remind voters about how Democratic Gov. Gray Davis became a widely criticized figure as electricity rates soared and temporary blackouts rolled across the state in early 2001 beginning a slide in Mr. Davis' public opinion numbers from which they have not recovered.
"The power crisis forever mutated Gray Davis' political DNA," Republican spokesman Rob Stutzman said. "Two years ago, Davis was sailing along to re-election and a White House bid, and Republicans in and out of California never thought they had a chance to defeat him. Now he is one of the most endangered Democrat incumbents."
Polls show that the lingering electrical crisis, although no longer a top priority for voters, remains very much on their minds. Despite his unpopularity, Mr. Davis still enjoys a comfortable lead over Mr. Simon in opinion polls, but Republicans say the state's power problems leave an opening for the Republican challenger to gain ground.
The nonpartisan Field Poll showed that 98 percent of California voters responding said the state's power problems would be at least "somewhat important" in selecting a governor, tied with the economy.
"It is the most defining issue of the governor, and it truly leaves a negative impression in the minds of voters," Mr. Stutzman said.
Specifically, Republicans plan to suggest that Mr. Davis waited too long to react until there were actual blackouts that infuriated consumers and shut down industry and then locked the state into unwise long-term contracts, estimated to be worth more than $40 billion over 10 years, that will now force California to pay rates far higher than market rates.
But Mr. Davis makes no apologies for the steps he took in the heat of the crisis. His staff points out that, thanks to Mr. Davis' intervention, the dire predictions of widespread blackouts never came true, and that there is no serious threat of blackouts this year.
"When all is said and done, the governor will be vindicated for the steps he took to keep the lights on in this state," Davis spokesman Roger Salazar said.
Mr. Salazar denies that the governor waited too long, saying Mr. Davis began early to push for new power plant construction and also pressed federal regulators to help the state.
The crisis reached its height only after the Federal Energy Regulatory Commission refused to step in, a decision that forced Mr. Davis to put up state funds to buy power and agree to the long-term contracts.
Indeed, power officials and experts say the long-term power deals, however expensive they might be, played a major role in saving the state from a blackout problem during the hot months of 2001. Consequently, there were only seven days of "rolling blackouts" last year, the last occurring on May 8 before Mr. Davis signed the long-term contracts.
The state's Independent System Operator, which runs most of California's power grid, said it has not come even close to issuing any power alerts this year, despite a few days of unseasonably hot weather.
"You can argue all you want about the price and whether the state should do it," said ISO spokesman Greg Fishman. "From an operational view, they have been a big help."
The contracts allow the ISO and the electrical utilities to know for certain where most of the power is coming from to meet routine demand.
They mean the ISO has to rely on backup power plants and expensive emergency contracts only to meet occasional spikes. Last spring, in the depth of the crisis, the ISO and the utilities were almost completely at the mercy of the volatile and fickle short-term power market.
The market left the state vulnerable to an unfortunate confluence of strains on the system, particularly an unusually dry year in the Pacific Northwest that left hydroelectric plants idle and the booming demand in the sprawling suburbs of Las Vegas and Phoenix, which drew off power that formerly went to California in emergencies.
Aside from that strained system, power companies appear to have engaged in a variety of tactics to raise prices, including creating artificial congestion on the electrical transmission lines, then charging the state a fee to help sort out the mess.
Mr. Davis long has complained that power companies were manipulating the market to increase profits, a charge that at least partially was proven in the investigations following the collapse of the energy giant Enron. Mr. Salazar said the revelations of energy company manipulations will help show voters that Mr. Davis did the best he could to keep the lights on.
"At the time the state entered into those contracts, the price of power was so high that the [electrical utilities] couldn't afford it," Mr. Salazar said.
"He did what he had to do to stabilize the market."


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