AP Online, May 30, 2001; Wednesday, 8:52 AM, Eastern Time, Financial pages,
????660 words, Power Company Stocks Fall, BRAD FOSS, NEW YORK

Contra Costa Times, May 30, 2001, Wednesday, DOMESTIC NEWS, K7997, 1073
????words, Davis vows to sue federal government to force caps on electricity
????prices, By Daniel Borenstein

Contra Costa Times, May 30, 2001, Wednesday, STATE AND REGIONAL NEWS, K0024,
706 words,
???Gephardt, California Democrats call for greater federal involvement in
power market, By Brian ??
???Anderson

Contra Costa Times, May 30, 2001, Wednesday, STATE AND REGIONAL NEWS, K7970,
434 words, Californians ???
???can monitor supply, demand levels on new Web site, by Tony Hicks

Los Angeles Times, May 30, 2001 Wednesday, Home Edition, Page 1, 1687 words
????, THE NATION; ; Bush, Davis Collide Over Energy Policy; Politics: At
summit
????with governor, president continues to oppose electricity price caps.,
JAMES
????GERSTENZANG, DAN MORAIN, TIMES STAFF WRITERS

Los Angeles Times, May 30, 2001 Wednesday, Home Edition, Page 13, 699 words
????, Commentary; ; Bush Isn't Budging, but He Needs to Turn FERC Around,
MEDEA
????BENJAMIN, Medea Benjamin is the founding director of Global Exchange, a,
????corporate accountability organization in San Francisco

The New York Times, May 30, 2001, Wednesday, Late Edition - Final, Section
????A; Page 22; Column 1; Editorial Desk, 401 words, Chilly Encounter in
????California

The New York Times, May 30, 2001, Wednesday, Late Edition - Final, Section
????A; Page 1; Column 3; National Desk, 1252 words, SHARP DIFFERENCES AS BUSH
????AND DAVIS DISCUSS BLACKOUTS, By TODD S. PURDUM and DAVID E. SANGER, LOS
????ANGELES, May 29

The New York Times, May 30, 2001, Wednesday, Late Edition - Final, Section
????A; Page 2; Column 3; Metropolitan Desk, 1217 words, NEWS SUMMARY

The Orange County Register, May 30, 2001, Wednesday, COMMENTARY, K7955, 584
????words, Sparks sizzle as Bush, Davis meet

San Jose Mercury News, May 30, 2001, Wednesday, SJ-GILLMOR-COL, 756 words,
????San Jose Mercury News, Calif., Dan Gillmor Column, By Dan Gillmor

San Jose Mercury News, May 30, 2001, Wednesday, SJ-GOV-BUSH, 1127 words,
????Bush Scheduled to Make Crucial Trip to California, By Jim Puzzanghera

The San Francisco Chronicle, MAY 30, 2001, WEDNESDAY,, FINAL EDITION, NEWS;
????, Pg. A1, 1220 words, Bush, Davis fail to settle dispute; ???President
????travels to state but won't budge on rate caps, Carla Marinucci, Los
Angeles

The San Francisco Chronicle, MAY 30, 2001, WEDNESDAY,, FINAL EDITION, NEWS;
????, Pg. A8, 626 words, Democrats sponsor energy talks; ???Bush still at odds
????with call for federal support of conservation, Rick DelVecchio, Oakland

USA TODAY, May 30, 2001, Wednesday,, FIRST EDITION, NEWS;, Pg. 3A, 439
????words, Bush rejects cap on electricity prices Davis pledges to go to
court,
????Laurence McQuillan and Martin Kasindorf, LOS ANGELES

The Washington Post, May 30, 2001, Wednesday, Final Edition, EDITORIAL; Pg.
????A18, 572 words, California's Power Clash

The Washington Post, May 30, 2001, Wednesday, Final Edition, A SECTION; Pg.
????A02, 802 words, Bush Says No to Davis Bid For Energy Price Controls;
????California Governor Vows to Sue U.S. for Relief, Mike Allen, Washington
Post
????Staff Writer, LOS ANGELES, May 29

The Washington Times, May 30, 2001, Wednesday, Final Edition, PART A;
????COMMENTARY; EDITORIALS; Pg. A14, 430 words, Gov. ?Gray's dim fairy tale

The Washington Times, May 30, 2001, Wednesday, Final Edition, PART A; Pg.
????A8, 584 words, GOP: Davis' woes to help revive party, Ralph Z. ?Hallow;
THE
????WASHINGTON TIMES

Chicago Tribune, May 30, 2001 Wednesday, NORTH SPORTS FINAL EDITION, News;
????Pg. 1; ZONE: N, 1008 words, Bush, Gov. Davis sound like Texas, California
on
????energy, By Vincent J. Schodolski and Karen Brandon, Tribune staff
reporters.
????Tribune staff reporter V. Dion Haynes contributed to this report., LOS
????ANGELES

U.S. Newswire, May 29, 2001, Tuesday, STATE DESK, 1008 words, Libertarians:
????While Bush and Davis Chat, California Burns -- Through $180,000, LOS
????ANGELES, May 29 Copyright 2001 Associated Press

AP Online
May 30, 2001; Wednesday 8:52 AM, Eastern Time
SECTION: Financial pages
LENGTH: 660 words
HEADLINE: ?Power Company Stocks Fall
BYLINE: BRAD FOSS

DATELINE: NEW YORK

BODY:

???Investors in power companies who were sipping champagne after President
Bush
unveiled his national energy strategy got a bad case of the hiccups when
Democrats regained control of the Senate.

??Shares of companies that trade power climbed higher in the days following
the
release of the Bush plan. They've been sliding since Sen. James Jeffords of
Vermont defected from the Republican Party, and Wall Street analysts say
perceptions about the fate of the Bush plan are definitely a factor.

??''The energy bill was so favorable it almost seemed like (power companies)
got everything they would have asked for,'' said Barry Abramson, utility
analyst
at UBS Warburg. ''Now it looks like everything is going to be more difficult
to
achieve, but not impossible.''

??The Bush plan seeks to give oil and gas drillers easier access to public
lands, to speed up the review process for refinery and power plant expansions
and spur renewed interest in nuclear power.

??Shares of Calpine Corp., Dynegy Inc. and Mirant Corp., climbed steadily from
May 16 to May 22 the time between the release of the Bush plan and reports of
a
Senate shake-up.

??These stocks began to descend on May 23, when Sen. Jeffords' plans were
first
reported, and have continued downward, with Calpine losing 10 percent, Dynegy
slipping 12 percent and Mirant off nearly 13 percent by the end of the day
Tuesday.

??Still, analysts say investors may be overreacting.

??''Despite the fanfare following the unveiling of President Bush's energy
plan, we believed its chances of passage even with a Republican majority was
slim at best,'' said Daniel Ford, head of Lehman Brothers' team of energy
analysts. ''With Jeffords move, the effort may be even more remote, but the
most
likely outcome, inaction, has not changed.''

??Ford acknowledged that talk of capping wholesale electricity prices for
California has resurfaced in the Senate, though he dismissed the likelihood of
this happening even with a Democratic majority because ''Bush still has veto
power and, to date, has been steadfastly against caps.''

??Democrats no doubt will emphasize conservation more than Republicans would
have, but the momentum shift in the Senate will not be overly dramatic,
according to Bill Breier, vice president of the Edison Electric Institute, a
Washington-based group that represents utilities.

??There will still be fierce battles over efforts to relax power plant
emissions a Bush proposal that would benefit coal burners _ and proposals to
expand the nation's electricity and natural gas infrastructure.

??''There's going to have to be consensus and we've known that from the
get-go,'' Breier said.

??Analysts emphasized that it would be wrong to assume that much of the Bush
energy plan is now dead-on-arrival with Democrats in control of the Senate.

??For instance, attention has been given to the fact that Sen. Jeff Bingaman,
a
Democrat from New Mexico, will take over as chairman of the Senate Energy and
Natural Resources Committee, replacing Sen. Frank Murkowski of Alaska.

??But Bingaman supports legislation critical to the nuclear power industry,
including the Price Anderson Act, a 1957 law set to expire in 2002 that limits
corporate liability from a nuclear accident.

??Other energy strategies favored by Bush, such as the deregulation of
electricity markets and the construction of some 1,300 new power plants over
the
next 20 years, will not be affected by the Senate overhaul simply because
their
implementation is heavily dependent on state government, not federal, said Ray
Niles, who analyzes the power and natural gas industries for Salomon Smith
Barney.

??''I don't think it makes a huge amount of difference,'' Niles said. ''Things
like increasing drilling were going to be a hard

??aul for the country anyway.''

?????(PROFILE

?????(CO:Calpine Corp; TS:CPN; IG:ELC;)

?????(CO:Dynegy Inc; TS:DYN; IG:ELC;)

?????(CO:Mirant Corp; TS:MIR; IG:ELC;)

?????)

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???????????????????????Knight Ridder/Tribune News Service

??????????????????????????????Contra Costa Times

???????????????????????????May 30, 2001, Wednesday

SECTION: DOMESTIC NEWS

KR-ACC-NO: ?K7997

LENGTH: 1073 words

HEADLINE: Davis vows to sue federal government to force caps on electricity
prices

BYLINE: By Daniel Borenstein

BODY:

??LOS ANGELES _ After a 35-minute meeting Tuesday with President George Bush
that produced little movement, Gov. Gray Davis said he would sue the federal
government to force caps on wholesale electricity prices.

??Both sides described the meeting as cordial. But when it was over, there was
no change in Bush's position that price caps would make the state's crisis
worse
and Davis' insistence that they are key to staving of skyrocketing prices this
summer.

??Davis praised the president for supporting quick federal help on permits for
new power plants and for a federal investigation of why Texas natural gas
costs
three times as much in New York as in California.

??"On the big enchilada, the thing that really matters above all else,
temporary price relief, I am disappointed that we do have a fundamental
disagreement," Davis said. "We have an agreement to disagree, but it's a big
disagreement."

??After the meeting, Karl Rove, the president's political strategist, said
Bush
continues to believe that "the better way to assure a strong California
economy
and to keep people working" is by emphasizing conservation, technology,
alternative sources, new supplies and to fix the problems with transmission.

??The meeting between the two leaders followed a lunchtime speech in which
Bush
promised to support continuation of a ban on offshore oil drilling on the
California coast and a crackdown on illegal price gouging by electricity
suppliers.

??But the speech and the meeting left clear that California would be on its
own
this summer when it comes to controlling expected price spikes. Since the
president won't help, Davis said, he has no choice but to sue.

??He said the law is clear: The Federal Energy Regulatory Commission must take
action after its finding in the fall that prices are not just and reasonable.
"
This is not a question of whether you like price caps or you don't like price
caps," Davis said. "We all have to enforce laws whether we like them or not."

??Coincidentally on Tuesday, the 9th U.S. Circuit Court of Appeals tossed out
a
lawsuit brought by California lawmakers seeking a federal judicial order to
lower prices.

??The three-judge panel, in a brief statement, said last week's appeal by
state
Senate President John Burton and state Assembly Speaker Robert Hertzberg does
not warrant "intervention of this court."

??One legal expert said the significance of the decision is unclear. In the
lawsuit, the Legislature sought an emergency ruling, but such decisions are
tough to win, said Sean Gallagher, staff counsel for the Public Utilities
Commission.

??The Federal Power Act establishes a process for legal challenges that
directs
petitioners to first ask the FERC to reconsider a decision before going to
federal court. That is something the Legislature did not do until Tuesday.

??"The fact the 9th Circuit has turned them down is by no means the end of the
ballgame," Gallagher said.

??Davis said he would not make the same mistake. He said he has already filed
a
complaint with the FERC and expects to give them about 30 days to act before
he
files his lawsuit.

??In the meantime, the Davis administration is considering cutting off state
electricity purchases if the price goes too high this summer. Joseph Fichera,
a
gubernatorial adviser, said Monday that the idea is seriously under
consideration.

??But Gerald Parsky, the president's California campaign chairman, seemed to
warn against such a plan when he said Tuesday that businesses are more
concerned
about blackouts than about prices. When asked, he refused to say whether there
should be a limit on the amount the state should pay for electricity.

??The president's day began at Camp Pendleton, where he offered small measures
of federal help to California.

??The initiatives include:

??_$150 million to help low-income Americans pay energy bills this summer. He
will ask Congress to approve the additional spending for this fiscal year,
which
ends in October.

??_His announcement that military facilities in California have exceeded their
goal of trimming usage by 10 percent during peak hours.

??_A Department of Energy project to stimulate the building of more electrical
lines running north and south through the state.

??About 100 protesters waved signs and shouted in support of rate caps at the
gate of the Marine base.

??Protesters from the state Democratic Party, the Green Party and
environmental, consumer and socialist organizations, called on Bush to support
capping energy prices.

??"We've got to stop the gouging and work towards a cleaner, more sane energy
policy," said June Brashares of Global Exchange, an environmental and labor
organization.

??While Bush was calling for political calm at Camp Pendleton, Davis was in
Los
Angeles trying to publicly build his case for caps.

??Before Bush and Davis met, the stage had been set for the failure of their
talk. In his lunchtime speech to the Los Angeles World Affairs Council, Bush
insisted he would not back down on his opposition to price caps.

??"We will not take any action that makes California's problems worse," he
said. "And that is why I oppose price caps. Price caps do nothing to reduce
demand and they do nothing to increase supply."

??The president promised to help by reducing electricity use at federal
facilities enough to save 76 megawatts of demand at peak hours. That's roughly
1.5 percent of peak summer demand.

??And he promised to pursue complaints of illegal price gouging by electricity
wholesalers. "I want to assure Californians that the federal government takes
very seriously our responsibility to make sure that companies are not
illegally
gouging consumers," he said.

??"I publicly call on federal agencies to investigate all complaints of
illegal
gouging and if those complaints are justified to take strong and appropriate
action."

??While Davis appreciated the crackdown on illegal price gouging, he said that
alone would not fix the "dysfunctional market" _ that it would not stop the
exercise of market power that generators have used to drive up prices.

??(staff writer Andrew LaMar contributed to this article.)

??PHOTOS.

??GRAPHIC:

??20010529 BUSH ENERGY, a poll on Bush's handling of energy issue, what
percent
polled think there is an energy crisis and what is the most effective thing to
do about it (47 percent say conservation).

??(c) 2001, Contra Costa Times (Walnut Creek, Calif.).

??Visit the Contra Costa Times on the Web at http://www.cctimes.com/

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???????????????????????Knight Ridder/Tribune News Service

??????????????????????????????Contra Costa Times

???????????????????????????May 30, 2001, Wednesday

SECTION: STATE AND REGIONAL NEWS

KR-ACC-NO: ?K0024

LENGTH: 706 words

HEADLINE: Gephardt, California Democrats call for greater federal involvement
in
power market

BYLINE: By Brian Anderson

BODY:

??OAKLAND, Calif. _ As President Bush unplugged Gov. Gray Davis' plea for caps
on erupting energy prices, House Minority Leader Richard A. Gephardt and a
handful of local Democrats called Tuesday for greater federal involvement in
reining in an uncontrolled power market.

??At a Tuesday hearing in Oakland, Gephardt, D-Mo., charged the Bush
administration with taking a "do-nothing approach" toward solving the state's
energy crisis and said ordering price caps on mountainous power costs was "the
right thing to do."

??"We would hope the President would move away from the single-minded devotion
to drilling and take sensible, short-term action that may be different from
what
the power suppliers and energy producers want," Gephardt said. "This is a
do-nothing approach from the Administration and it's an unacceptable response
from our highest elected officials."

??His comments came during a meeting of business and school leaders from
Pleasanton, Danville and other Bay Area cities who told the region's House
delegation that escalating energy costs threaten to plunge the state's economy
and education system into a black hole.

??Money that could have been used to buy new books for school libraries or
upgrade equipment and improve training at area businesses is now earmarked for
sky-high fuel bills, invited speakers told Gephardt and Reps. Ellen Tauscher,
D-Alamo; Barbara Lee, D-Oakland; Nancy Pelosi, D-San Francisco; and Lynn
Woolsey, D-Petaluma, among others.

??"Over the last three years, we have been forced to double our energy
budget,"
said Pleasanton schools Superintendent Mary Frances Callan. "So, indeed, if we
are not going to leave children behind, we do need to be aware that this
energy
crisis is eating at the very resources we need to educate our youngsters."

??Callan said her district budgeted $155 per student solely to cover energy
bills next year. That translates to a new part-time librarian for each school,
part-time counselors for all secondary schools, 9,000 textbooks or 23,000
library books for the 13,283-student district, she said.

??Gary DeAtley, president of California Sun Dry Foods in Danville, said the
energy crunch could force businesses to look outside the state for new homes
where power is not a problem. While he acknowledged that moving was not the
ideal solution, he said it was an option if a fix is not quickly implemented.

??"I think we've all heard today that no matter what our situation, we all
have
a need in California, the Bay Area and nationwide for constant electricity,
reliable electricity and for electricity we all can afford," DeAtley said.

??Others told the House Democrats that the poor, old and disabled should not
be
forgotten. Often on fixed incomes, they are more quickly affected when the
power
goes out and energy bills rise, speakers said.

??"Higher electricity and gas bills for senior citizens on meager incomes
cause
them to cut back on food, medications ...," said Harold Taylor, an East Bay
representative from American Association of Retired Persons. "They, the power
companies, are ripping us off."

??Hearing organizers said the gathering allowed elected officials to listen to
the people themselves about energy problems that have plagued California. But
it
also allowed a smattering of local politicians to don white hats with
consumers
in a good vs. evil battle that on Tuesday seemingly exploded in all
directions.

??In addition to the President's denial of price caps, a three-judge panel of
the 9th U.S. Circuit Court of Appeals in San Francisco refused to issue an
order
requiring federal regulators to restrict wholesale energy costs. State
Assembly
leaders along with the city of Oakland had asked in a lawsuit filed last week
that power prices be capped.

??Hoping to force Bush to change his mind, or at least face the ire of
consumers, Gephardt pledged Tuesday to pull the Electricity Emergency Relief
Act
onto the floor of the House from the Energy and Commerce Committee. The
legislation calls for managing demands on power sources, among other
provisions.

??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune

??(c) 2001, Contra Costa Times (Walnut Creek, Calif.).

??Visit the Contra Costa Times on the Web at http://www.cctimes.com/

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???????????????????????Knight Ridder/Tribune News Service

??????????????????????????????Contra Costa Times

???????????????????????????May 30, 2001, Wednesday

SECTION: STATE AND REGIONAL NEWS

KR-ACC-NO: ?K7970

LENGTH: 434 words

HEADLINE: Californians can monitor supply, demand levels on new Web site

BYLINE: By Tony Hicks

BODY:

??BERKELEY, Calif. _ Californians can now get their own information about
whether the lights will stay on without waiting for the Independent System
Operator to issue blackout warnings.

??Residents can see supply and demand levels rise and fall before their eyes
on
a new Web site put together by Lawrence Berkeley Laboratory scientists.

??Data from the California Independent System Operator runs through a graph
showing lines representing current supply and demand. The closer the lines
get,
the closer the state gets to blackouts. Data will be available almost quickly
as
it comes to the ISO.

??"It's the first site _ at least that we know of _ that shows in real time
the
electricity supply and demand in California," said lab spokesman Allan Chen.
"The ISO Web site only shows demand. We thought it would be useful to let
people
see the supply as well. It's a tool to let people see how close we're getting
to
rolling blackouts."

??The site, found at http://energycrisis.lbl.gov also shows statewide power
imports and exports and the capacity that's out of service on any given day.

??"It's an estimate," said Katie Coughlin, one of three scientists who worked
on the project the past couple months. "It's difficult to decide exactly how
much electricity is available."

??Users can use the site as a daily management tool, by ramping up
conservation
efforts when demand is threatening to overwhelm the supply, Coughlin said. But
don't expect it to prevent blackouts.

??"If millions of people decide they're going to switch off their lights and
air-conditioning, then it could make a significant difference," Coughlin said.
"But of course it's unlikely that millions of people will look at the site all
at once. But it does give people an idea of where we're at."

??The California Energy Commission also provides information on the site. In
coming weeks, researchers will add archives with past days consumption and
supply levels and links to other sites. Chen said the lab will also "pretty it
up some."

??"The motive for us was to figure out some way to be of assistance to the
residents of California," he said.

??Unveiled publicly Monday, the site is the second energy-related site the lab
recently made available. Last week, the lab debuted the site
http://savepower.lbl.gov. That site aims to help state residents reduce energy
use by 20 percent to qualify for a rebate under Gov. Gray Davis' 20/20 rebate
program.

??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune

??(c) 2001, Contra Costa Times (Walnut Creek, Calif.).

??Visit the Contra Costa Times on the Web at http://www.cctimes.com/

JOURNAL-CODE: CC

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??????????????????????????????Los Angeles Times

?????????????????????May 30, 2001 Wednesday ?Home Edition

SECTION: Part A; Part 1; Page 1; National Desk

LENGTH: 1687 words

HEADLINE: THE NATION;
;
Bush, Davis Collide Over Energy Policy;
Politics: At summit with governor, president continues to oppose electricity
price caps.

BYLINE: JAMES GERSTENZANG, DAN MORAIN, TIMES STAFF WRITERS

BODY:

??President Bush, venturing into California for the first time as president,
stood firm Tuesday in his opposition to reining in wholesale electricity
prices,
prompting Gov. Gray Davis to announce that he likely will sue federal energy
regulators within a month.

??In their much-anticipated private summit, Bush met with Davis for nearly 40
minutes in what was characterized afterward as a cordial, businesslike
session.
Davis said Bush offered little to help with California's energy crisis, while
Bush's aides said Davis' prescription would worsen the state's woes.

??"He just listened and said he is against price caps," Davis said.

??For his part, the president said in a midday speech to the World Affairs
Council in Century City: "My administration will continue to work to help
California through the difficult months ahead."

??The president's first full day in California consisted largely of
appearances
before friendly audiences. The only discord came at the World Affairs Council
luncheon, where three hecklers disrupted his otherwise well-received speech on
energy and the economy, and a few dozen protesters gathered outside the
Century
City hotel.

??Davis toned down his harsh rhetoric of recent days, praising Bush for
speeding up the process by which the federal government grants permits to new
power plants.

??The governor said Bush agreed to begin looking into natural gas prices--a
step that Davis praised. Natural gas, which fuels virtually all new power
plants
being built in California and many of the old ones, costs roughly three times
more in California than in New York.

??The big disagreement remains over the wholesale cost of electricity. The
state spent $7 billion on electricity in 1999. The cost could skyrocket to $50
billion this year.

??"We have an agreement to disagree, but it is a big disagreement," Davis
said.

??The Davis administration has appealed to the Federal Energy Regulatory
Commission to impose some type of price controls on electricity. Davis said he
expects to sue within a month, if the federal commission turns down the
state's
latest petition, which was filed Friday. Also Tuesday, a federal appeals court
rejected a lawsuit by state legislative leaders to force Washington energy
regulators to cap electricity prices in California.

??"I'm going to pursue every recourse possible to me," Davis said, adding that
he also will press his case on behalf of California and other Western states
with the newly Democrat-controlled U.S. Senate.

??The Bush-Davis meeting was almost twice as long as the 20 minutes allotted
on
the president's public schedule. On his first visit to the nation's most
populous state since taking office four months ago, Bush came face to face
throughout the day with the reality of the energy crisis and its potential for
dragging down the economy of California and the nation.

??'Price Caps Now,' Heckler Tells Bush

??Bush was thrust into the controversy that the crisis has engendered: At the
luncheon speech, one woman stood up and shouted, "Price caps now!" and "Stop
the
greedy generators!" As she was slowly led out, two other women echoed her
cries,
including one who stated primly, "Excuse me, Mr. Bush, we need price caps."

??Medea Benjamin, a California Green Party candidate for the U.S. Senate last
year, was one of the three women ushered out.

??Benjamin and 79-year-old Ceil Sorensen were unfurling a banner inside the
hotel when they were ushered out, said Donna J. Warren, a Green Party
candidate
for the 32nd Congressional District seat. The women were released within 30
minutes, Warren said. The president continued his speech, making no reference
to
the interruptions.

??Meanwhile, a group of economists--among them aides to former President
Reagan
and to Bush's father--sent Bush a letter opposing price caps, countering
another
letter from economists delivered by Davis supporting temporary steps to
stabilize California's electricity market.

??The president, sounding defensive after coming under attack in a state in
which he faces wide skepticism about his policies and his poll numbers are
drooping, said in an apparent slap at Davis:

??"For too long, too often, too many have wasted energy, pointing fingers and
laying blame. Energy is a problem that requires action, not politics, not
excuses but action. Blame shifting is not action, it's a distraction."

??Bush's day began at dawn in Los Angeles. He flew to Camp Pendleton, where
Marines demonstrated their energy conservation efforts. Speaking to an
assembly
of Marines in front of the 1st Marine Division headquarters, Bush was cheered
and greeted with several throaty chants of "hoo-aah" from the approving
leathernecks.

??After the speech in Los Angeles, he took part in a meeting on energy
efficiency and then met with the governor. At the end of the day, he flew to
Fresno, for a visit today to Sequoia National Park.

??Andrew H. Card Jr., Bush's chief of staff, said after the meeting with
Davis:
"It was a very, very friendly and constructive conversation." Davis described
the session as cordial and businesslike.

??Card said that the two found areas in which they agreed to disagree, but
that
there were more areas of agreement.

??Card also said Bush told Davis that he had asked Pat Wood, a power utility
official in Texas whom he has named to the Federal Energy Regulatory
Commission,
to visit with the governor to explore the state's energy problems.

??The day had the feel of two intersecting political campaigns.

??Bush tried to show that he cared about California's woes; Davis surrounded
himself with "real Californians," including three young children. The group
was
handpicked by the governor's aides to illustrate the effect of rising
electricity bills.

??"I had hoped [Bush] might have been able to hear the stories directly,"
Davis
said before his private meeting with the president. He sat on a couch on the
19th floor of the Century Plaza, with three young children, and listened to
their parents and others discuss their worries about rising bills and fears
about blackouts.

??Linking a thriving economy to a reliable, affordable energy supply, Bush
said
all his work on energy would be guided by this test: "Will any action increase
supply at fair and reasonable prices? Will it decrease demand in equitable
ways?
Anything that meets that test will alleviate the shortage, and we will move
swiftly to adopt it.

??"Price caps do nothing to reduce demand, and they do nothing to increase
supply," he said, adding that the Clinton administration also opposed such
restrictions.

??He said they may sound appealing "at first blush for those struggling to pay
high energy" bills, but they would bring "more serious shortages." Critics of
price caps argue that they would make production of energy uneconomical and
thus
discourage exploration for new sources of oil and gas.

??In a nod to concerns that energy companies are taking advantage of the
shortages, Bush said the federal government "takes very seriously our
responsibility to make sure that companies are not illegally gouging
consumers."

??Energy Problems Detailed to Media

??To the surprise of no one in the Davis administration, Bush did not adjust
his schedule to listen to Davis' Californians with energy problems.

??So Davis held a news conference where they could tell their stories, then
appeared with them in interviews with reporters from national television
networks.

??"I'm surprised [Bush] wouldn't meet with this group, and I'm surprised he's
only giving the governor 20 minutes," said Gladys Cannon, 75, who has
emphysema.
"What can you do in 20 minutes, other than say, 'No.' "

??Cannon and her husband, Frank, told the governor that they are "on the
edge,"
living on fixed incomes, and said they fear the effects of blackouts on her
respirator. The West Covina woman said she has long been a Davis campaign
volunteer.

??Gabriel and Christine Rodriguez, owners of Chiquita's Mexican Restaurant in
San Diego, came with their three children, ages 4, 6 and 9, and said they
can't
make charitable donations or fill job openings because they are struggling to
pay utility bills that have nearly tripled. Christine Rodriguez works for San
Diego City Councilman Scott Peters.

??Meanwhile, in San Francisco, a three-judge panel of the U.S. 9th Court of
Appeals dismissed an urgent suit by Senate leader John Burton and Assembly
Speaker Bob Hertzberg, declining to intervene in the growing Washington-
California tussle over the energy crisis.

??The suit alleged that Californians were suffering "irreparable harm" due to
the failure of the Federal Energy Regulatory Commission to fulfill its duty
and
establish "just and reasonable" wholesale electricity rates. As a result, the
suit alleged, the health and safety of Californians were being threatened by
frequent power outages.

??In rejecting the suit, the judges said the petitioners--Burton (D-San
Francisco), Hertzberg (D-Sherman Oaks) and the city of Oakland--"have not
demonstrated that this case warrants the intervention of this court."

??Burton and Hertzberg are conferring with their attorneys and have not
decided
whether to appeal the ruling to the U.S. Supreme Court.

??Although the Democratic officeholders failed to persuade the court to force
the hand of the federal regulators, a parallel effort to accomplish the same
goal is still moving forward.

??The California Assembly has directly petitioned the regulatory commission to
reconsider an April 26 order that called for limited price controls in the
West
during power emergencies this summer.

??Davis and other state leaders have blasted the order, saying it is full of
loopholes and will do little to stop what they consider blatant price gouging
by
electricity traders.

??"California still needs real relief, not the smoke screen federal regulators
have offered so far," Hertzberg said. "The bottom line is that the commission
has failed to do its job, which is to protect Californians from runaway
wholesale electricity prices."

??*

??Times political writer Mark Z. Barabak and staff writer Miguel Bustillo
contributed to this story.

GRAPHIC: PHOTO: President Bush greets Gov. Gray Davis. "We have an agreement
to
disagree, but it is a big disagreement," Davis said of Bush. PHOTOGRAPHER:
CAROLYN COLE / Los Angeles Times PHOTO: Displaying their energy gripes at
hotel
where President Bush spoke are, from left, Brian Bope, Christine Yi and
Kristin
Armstrong. PHOTOGRAPHER: AL SEIB / Los Angeles Times PHOTO: (Orange County
Edition, A1) President Bush addresses California's energy crunch in a Tuesday
speech in Century City while Gov. Gray Davis listens. The visit is Bush's
first
to the Golden State as president. PHOTOGRAPHER: BRIAN WALSKI / Los Angeles
Times

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??????????????????????????????Los Angeles Times

?????????????????????May 30, 2001 Wednesday ?Home Edition

SECTION: California; Part 2; Page 13; Opinion Desk

LENGTH: 699 words

HEADLINE: Commentary;
;
Bush Isn't Budging, but He Needs to Turn FERC Around

BYLINE: MEDEA BENJAMIN, Medea Benjamin is the founding director of Global
Exchange, a, corporate accountability organization in San Francisco

BODY:

??George W. Bush has been greeted at every stop on his California trip by
angry
protesters who believe he has refused to take any meaningful steps to stop the
energy crisis engulfing our state. He has come at a time when consumers have
been socked with the heftiest electricity rate increases in state history,
rolling blackouts have become routine, our largest utility is bankrupt, and
the
state's budget is being drained by $70 million a day as California buys
wholesale energy at outrageous prices.

??There is a very simple measure Bush could take that would alleviate the
crisis overnight. He could tell the Federal Energy Regulatory Commission, or
FERC, to do its job. FERC's legal mandate is to ensure that wholesale
electricity prices are "just and reasonable." But wholesale prices are not
just
and reasonable, and they are completely divorced from costs.

??FERC has been ideologically fixated on the free market while ignoring the
reality that a handful of energy suppliers--most of them from Texas--are
manipulating the market to make obscene profits at our expense. During the
last
several months, a flood of media exposes has revealed how the generators are
turning power plants on and off as much as several times an hour to take
advantage of price fluctuation, taking plants offline for "unscheduled
maintenance" and simply refusing to sell power to California. State and
federal
investigators say these companies have deliberately price-gouged consumers by
billions of dollars.

??The result is a massive transfer of wealth from California households to a
handful of energy companies. In the first three months of 2001, Houston-based
Dynegy Inc. posted revenues of $14.2 billion, nearly triple the $5.3 billion
reported in the same period a year ago. Revenues at Enron Corp. nearly
quadrupled from January through March to $50.1 billion, compared to $13
billion
in the first three months of 2000.

??The profits of such energy companies went up more than 500% between 1999 and
2000, according to state Senate figures. Compare this to the California Public
Utilities Commission's definition of fair rates when it was
regulatingutilities: cost plus 10%-12% profit.
??Does Bush have the power to influence FERC? Of course. Curtis L. Hebert Jr.,
who heads the commission, was appointed by Bill Clinton but was elevated to
chairman by Bush. FERC is also under the Department of Energy, headed by
Spencer
Abraham, a Bush appointee. If Bush wanted FERC to place controls on wholesale
prices through a system of cost-plus pricing, it would happen overnight.

??Bush's long-term energy policy promotes a continued reliance on polluting
fossil fuels and a resurgence of unsafe nuclear energy, while paying only lip
service to smart, sustainable solutions like renewable energy and efficiency.
Under the president's plan, technologies proven to be dirty, dangerous and
expensive will get the lion's share of taxpayer subsidies, while the 2002
budget
slashes funding for solar research by more than 50%, with major cuts for
biomass, geothermal, hydrogen technology and fuel-cell research. If the Bush
administration were to make sustainable energy sources a priority, existing
technologies--wind, solar and some types of biomass--could solve our long-term
energy needs. While such a policy is anathema to oil, coal and utility
industry
leaders who supported Bush's presidential campaign, it is central to any
forward-looking energy strategy.

??The sensible responses to the energy crises are clear--price controls in the
immediate future and reliance on renewables in the years to come. If Bush
continues his current course of action, we can only conclude that he is more
sympathetic to a handful of electricity and gas suppliers than to millions of
Californians.

??Unless residents of the country's largest state take the effort to make
their
voices heard, it's likely that Bush will continue to follow the hands that
feed
him, and that doesn't make for a healthy diet. It is up to us Californians to
let the president know he can't afford to kowtow to special interests.
Hopefully, he'll respond to the demands of the angry Californians he is
hearing
this week.

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??????????????????????????????The New York Times

????????????????May 30, 2001, Wednesday, Late Edition - Final

SECTION: Section A; Page 22; Column 1; Editorial Desk

LENGTH: 401 words

HEADLINE: Chilly Encounter in California

BODY:

??President Bush and Gov. Gray Davis, who are deeply at odds on California's
energy problems, have one thing in common -- plunging approval ratings among
California's aggrieved voters. Yesterday's meeting between the two did little
to
bridge the gap on energy and may have done even less to improve their
political
fortunes.

??As expected, Mr. Davis asked Mr. Bush for federal price caps on the soaring
cost of wholesale electricity, and threatened to sue the federal government if
the caps were not forthcoming. According to state estimates, California paid
$7
billion for electricity in 1999, and may pay 10 times that amount this year.
But
Mr. Bush refused, repeating his view that caps will make California's problems
worse in the long run by discouraging new investments in power plants.

???For Mr. Davis, the issue is partly political. He is up for re-election next
year and still has designs on the Democratic presidential nomination. But he
hurt himself by moving too slowly to raise rates on consumers and businesses,
a
move rightly urged by the administration to encourage conservation, and he was
unlucky enough to be governor at a time when the state began suffering the
effects of a grievously flawed deregulation plan. Mr. Bush, for his part, may
be
able to get along without California, but it is not clear that his party can.
Only one statewide elected official is a Republican, and California Democrats
have targeted several Republican members of Congress whose defeat in 2002
could
weaken if not end Republican control over the House of Representatives.

??The Bush forces say they have done plenty for California, including
expediting federal permits for new plants and ordering conservation measures
at
federal facilities. But nothing would help more than a temporary cap on
wholesale electricity prices like the one envisaged in a bill sponsored by
Senators Dianne Feinstein of California and Gordon Smith of Oregon. It would
ease the drain on California's treasury, release electricity that is currently
being withheld in expectation of higher prices and address the
administration's fears about investment by guaranteeing producers a reasonable
profit.

??Mr. Bush stubbornly clings to his position that this is essentially
California's problem, not Washington's. But if the problem ripples beyond
California's borders, that stubbornness could cost him support in the nation
at
large.

??http://www.nytimes.com

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??????????????????????????????The New York Times

????????????????May 30, 2001, Wednesday, Late Edition - Final

SECTION: Section A; Page 1; Column 3; National Desk

LENGTH: 1252 words

HEADLINE: SHARP DIFFERENCES AS BUSH AND DAVIS DISCUSS BLACKOUTS

BYLINE: ?By TODD S. PURDUM and DAVID E. SANGER

DATELINE: LOS ANGELES, May 29

BODY:

??On his first visit to California since his election and the state's rolling
blackouts, President Bush clashed sharply today with Gov. Gray Davis over the
wisdom of capping the price of electricity.

??After a 35-minute meeting with Mr. Bush, Mr. Davis said he intended to file
a
federal lawsuit and pursue other efforts to compel regulators to limit prices
charged by energy suppliers.

???It was a day of sharp policy differences and high political theater
involving the Republican president and the Democratic governor. Mr. Bush
campaigned often here last year yet lost the state by 12 percentage points, or
roughly 1 million votes, to Al Gore. Mr. Davis's own presumed presidential
ambitions for 2004 have steadily decreased as his handling of the power crisis
has lowered his approval ratings.

??Mr. Davis emerged from the meeting to declare, "I'm going to pursue every
recourse available to me" to force the Federal Energy Regulatory Commission to
order rebates to consumers or a lowering of prices.

??But he expressed gratitude that Mr. Bush had agreed to look into the
question
of why Texas natural gas suppliers were charging for gas transported to
California about three times what they were charging for gas transported to
New
York, and to review whether to re-impose tariffs, suspended two years ago, on
such transmissions.

??In comments that seemed to avoid brushing off California's problems, Mr.
Bush
promised slightly more federal money to help poor families pay their energy
bills, and he again pledged to speed federal reviews of plans to build
generating plants.

??At the Camp Pendleton Marine base and then at a luncheon of the World
Affairs
Council here, he said that this was a moment for solutions, not
"blame-shifting"
or politics.

??"We will not take any action that makes California's problems worse, and
that's why I oppose price caps," Mr. Bush told a largely sympathetic audience
at
the luncheon at the Century Plaza Hotel, delivering his most emphatic version
of
his longstanding position.

??As the audience applauded, Mr. Davis sat impassively on the dais.

??"Price caps do nothing to reduce demand and they do nothing to increase
supply," Mr. Bush said. "This is not only my administration's position, this
was
the position of the prior administration."

??Partly because Mr. Bush had waited so long to visit the most populous state
in the face of its severe energy problems, his talk with Mr. Davis took on the
ballyhooed air of a superpower summit meeting, with seconds for each man
hovering in hotel ballrooms and hallways like rival campaign troops, each side
spinning for its man. Mr. Davis's aides did not expect to win much short-term
help but hoped at least to make the case that the governor was pursuing every
avenue.

??Mr. Bush instead emphasized longer-term solutions, including conservation,
new energy technologies and speeded efforts to approve and build power plants.

??During his speech, three women, including Medea Benjamin, the California
Green Party's candidate for United States Senate last year, were led away by
police officers and the Secret Service after chanting slogans like "Price caps
now" and "Stop the greedy generators."

??At issue between Mr. Davis and Mr. Bush was the question of who should pay
for the soaring energy prices here and the botched deregulation of the
electricity market. ?Should it fall to the state's consumers, the generators
or
the utilities?

??To bolster his case and answer Mr. Bush's economic critique, Mr. Davis
released a letter today in which 10 leading economists urge Mr. Bush to find a
middle ground between fixed price caps and a truly free electricity market.

??"We are mindful of the potential dangers of applying a simple price cap,"
wrote the economists, led by Alfred Kahn, the architect of the deregulation of
the country's airlines during the Carter administration.

??"But California's electricity markets are not characterized by effective
competition," they continued, urging that the regulatory commission establish
"cost of service prices" that would create a "just and reasonable rate
standard."

??Assuming that a reasonable profit margin was established, this form of
flexible price controls would, they contended, assure that companies still had
an incentive to sell power into the California market.

??"FERC's failure to act now will have dire consequences for the state of
California and will set back, potentially fatally, the diffusion of
competitive
electricity markets across the country," the letter said.

??Some of the high-technology executives who met privately with Mr. ?Bush and
Mr. Davis today also said they were interested in long-term solutions and did
not rank price caps among them. Craig Barrett, chief executive of Intel
Corporation, one of the state's largest employers and the maker of the chip
that
drives tens of millions of computers, said that in the meeting with the
president, "I didn't hear the word price caps mentioned." He said they were
"kind of an artificial cap that is not going to solve the problem."

??But Mr. Barrett underscored the problem facing the state if it did not
convince investors, both foreign and domestic, that enough power would soon
flow. Intel has already suspended further expansion of its chip-fabrication
plants in California. Today Mr. Barrett said that "if California doesn't have
reliable power in five years, it would not be on any possible expansion list"
for new plants.

??Even some California Republicans have begun to fret quietly in recent weeks
that Mr. Bush was being perceived as inattentive to the needs of such a big
state, one whose Republican Party is desperately trying to rebuild from a
series
of electoral disasters that have left it with just a single statewide
officeholder, Secretary of State Bill Jones.

??Mr. Jones has said he will challenge Mr. Davis next year, but Mr. Bush has
implored the Republican mayor of Los Angeles, Richard J. Riordan, who is
retiring next month and introduced Mr. Bush at the lunch, to seek the
governorship.

??Mr. Davis and senior Bush aides characterized the meeting, which was
requested by Mr. Davis and went 15 minutes longer than scheduled, as cordial
and
businesslike.

??Karl Rove, the president's chief political adviser, told reporters afterward
that Mr. Bush was committed to stopping any illegal price-gouging by energy
suppliers and bringing "price relief" by means other than price caps.

??But Mr. Davis, in remarks to reporters, called some form of price controls
"the thing that really matters above all else," and said he and Mr. Bush
remained far apart. He said the regulatory commission had already established
that California's wholesale electricity market was dysfunctional.

??Mr. Davis also said he would file a lawsuit in federal court if the
commission did not soon grant his request for a review of its earlier order to
limit prices only during power emergencies, and to revoke the authority of
some
generators to charge market-based rates.

??Mr. Davis said he told the president, "You understand I have to do
everything
in my power," and that Mr. Bush had agreed he would have a similar duty if he
were governor.

??The United States Court of Appeals for the Ninth Circuit, in San Francisco,
declined today to order the regulatory commission to limit wholesale prices,
as
California's Democratic legislative leaders asked in a lawsuit last week,
saying
in a brief statement that the case did not warrant "intervention of this
court."
Mr. Davis had declined to join that lawsuit.

??http://www.nytimes.com

GRAPHIC: Photo: President Bush with Gov. Gray Davis of California yesterday
after a Los Angeles World Affairs Council meeting. They met privately later. (
Associated Press)(pg. A18)

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??????????????????????????????The New York Times

????????????????May 30, 2001, Wednesday, Late Edition - Final

SECTION: Section A; Page 2; Column 3; Metropolitan Desk

LENGTH: 1217 words

HEADLINE: NEWS SUMMARY

BODY:

??INTERNATIONAL ??A3-14

Powell Fails to Persuade NATO on Antimissile Plan
Secretary of State Colin L. Powell encountered a hard wall of opposition to
President Bush's plan for a missile defense plan when he appeared at a meeting
of NATO foreign ministers. He could not even convince them that their
countries
faced the threat of missile attack. ??A14

Senator Joseph R. Biden, Democrat of Delaware, said he would broaden debate
over
the Bush plan after he becomes Senate Foreign Relations Committee chairman
next
week. ??A10

??China Trade Extension
President Bush said he would ask Congress to extend China's normal trade
status
with the United States for a year, a stopgap measure made necessary because
Beijing, having won approval from Congress last year to enter the World Trade
Organization, is delaying its application. ??A4

Ukraine Confirms Premier
Anatoly Kinakh, a National Democratic Party member, lobbyist and ally of
President Leonid Kuchma, was confirmed as prime minister by Parliament,
quieting
for now a political crisis that has sapped Mr. Kuchma's popularity and
power. ??A7

Some Progress in Macedonia
Feuding political leaders promised to resume talks, averting a collapse of the
unity government, but fighting between the national forces and ethnic Albanian
rebels continued. ??A14

No Headway in Israel Talks
Three Israeli settlers and three Palestinians were killed in the West Bank and
Gaza Strip, and an American-brokered security meeting between Israeli and
Palestinian officers ended with no sign of agreement on steps to stem the
bloodshed. ??A6

Pakistan-India Summit Is On
Pakistan's military ruler, Gen. Pervez Musharraf, formally accepted the
invitation of India's prime minister, Atal Behari Vajpayee, to hold summit
talks. Genera Musharraf said he expected the main topic to be the disputed
territory of Kashmir. ??A5

New Fighting in Indonesia
Violence erupted in President Abdurrahman Wahid's home province and elsewhere
on
the eve of a legislative session that could result in his removal from
office. ??A4

World Briefing ??A

NATIONAL ??A16-21

Bush-Davis Meeting Yields No Deal on Energy Prices
President Bush, in California, clashed with Gov. Gray Davis over the capping
of
electricity prices, a move favored by Mr. Davis, who is struggling to manage
an
energy crisis. Mr. Davis, a Democrat, said he would file a lawsuit and pursue
other efforts to try to force regulators to limit prices charged by energy
suppliers. Mr. Bush promised more federal money to help poor families pay
energy
bills, and again pledged to speed federal reviews of plans to build more
generating plants. ??A1

Senate Power Shift Begins
Senator Carl Levin of Michigan, who will become chairman of a Senate panel on
investigations when the Democrats take over the Senate next week, said he
would
begin an inquiry into the recent rise in gasoline prices. ??A17

Ruling on Legal Fees
The Supreme Court dealt a setback to civil rights and environmental
plaintiffs,
ruling, 5 to 4, that litigation that only serves as a "catalyst" for a change
in
policy without producing a legal ruling does not qualify for reimbursement of
legal fees. ??A20

Trial for Holocaust Suspect
John Demjanjuk, an 81-year-old retired autoworker born in Ukraine, went on
trial
in Cleveland with his American citizenship once again at stake over federal
accusations that he was a Nazi death camp guard. ??A16

McVeigh Edges Toward Appeal
Timothy J. McVeigh told his lawyers to draft papers seeking a stay of his
execution on June 11 but was waiting until later this week to decide whether
to
file them, his lawyer said. ??A17

Survivor Arrested as Smuggler
The Border Patrol arrested one of the survivors of a botched smuggling effort
that left 14 migrants dead in the Arizona desert last week, accusing him of
being an organizer. ??A18

Suit Weighed in Dancer's Death
A Pennsylvania pathologist said the death of the flamenco dancer Jose Greco,
82,
last December resulted from an infection he developed after breaking his toe
in
a scuffle with Amtrak police officers, and Mr. Greco's family is considering a
lawsuit. ??A17

NEW YORK/REGION ??B1-9

4 Found Guilty in Bombing Of U.S. Embassies in Africa
A federal jury convicted four men of conspiring with Osama bin Laden in a
terror
plot that resulted in the embassy bombings in Kenya and Tanzania in 1998,
claiming 224 lives. Two defendants found guilty of murder, Mohamed Rashed
Daoud
al-'Owhali, 24, and Khalfan Khamis Mohamed, 27, could receive the death
penalty.
Mr. bin Laden is a fugitive. ??A1

Deal on Aid to Uninsured
The Bush and Pataki administrations reached an agreement allowing New York to
begin providing medical coverage to about 600,000 uninsured New Yorkers using
a
combination of federal Medicaid money and state and local money. ??A1

A Night in Jail for Protesters
The Police Department has quietly changed its policy on arrests at street
protests, ordering officers to jail people, instead of issuing them summonses,
for minor offenses at demonstrations of more than 20 people. ??B1

Nurse Arrested in 2 Slayings
A registered nurse from Staten Island, Richard W. Rogers Jr., 50, was charged
with killing and dismembering two men in the early 1990's, and officials said
he
might be a suspect in other killings in the New York region that ignited fear
among gay men and in the bars they frequent. ??B1

New York Digest ??C17

EDUCATION ??B9

Limiting Teenage Pregnancy
The National Campaign to Prevent Teen Pregnancy said a program created at the
Children's Aid Society that features traditional sex education along with
tutoring, SAT preparation, job skills and other services had been shown to be
effective. ??A16

SPORTS ??D1-8

Court Lets Golfer Ride
The Supreme Court ruled, 7 to 2, that the disabled golfer Casey Martin can
use a
golf cart on the PGA Tour. ??A1

Devils Pull Even
The Devils beat the Colorado Avalanche, 2-1, on the Denver ice to even the
Stanley Cup finals at 1-1. ??D1

BUSINESS DAY ??C1-16

Phone Merger Talks Collapse
Alcatel and Lucent, which had been close to a $22.8 billion deal to merge,
terminated negotiations in disagreement over who would actually control the
combined companies. ??C1

Profit Warning From Sun
Sun Microsystems, citing slower than expected European sales, lowered earnings
forecasts for the current quarter and gave updated projections as low as
one-third of what industry analysts had expected. ??C1

Deal for Music Start-Up
The Germany-based media giant Bertelsmann was said to have agreed to acquire
the
two-year-old Internet music service Myplay, based in California, for about $30
million. ??C1

Business Digest ??C1

World Business ??W1

OBITUARIES ??C17-18

ARTS ??E1-8

DINING ??F1-12

EDITORIAL ??A22-23

Editorials: The embassy bombings verdict; chilly encounter in California; a
gain, and a loss, on civil rights; opening a crack in Albany's door.

Columns: Paul Krugman, Maureen Dowd.

Crossword ??E6
TV Listings ??E7
Public Lives ??B2
Weather ??C18

??http://www.nytimes.com

GRAPHIC: Photo

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???????????????????????Knight Ridder/Tribune News Service

??????????????????????????The Orange County Register

???????????????????????????May 30, 2001, Wednesday

SECTION: COMMENTARY

KR-ACC-NO: ?K7955

LENGTH: 584 words

HEADLINE: Sparks sizzle as Bush, Davis meet

BODY:

??The following editorial appeared in The Orange County Register Wednesday,
May
30, 2001.

??Give President Bush credit for the strength of his constitution. How many
presidents would not only read the incessant and overheated criticisms from a
state governor, but fly all the way from Washington to Los Angeles to endure
them face to face?

??Not many, we suspect. Yet President Bush met with California Gov. Gray Davis
Tuesday, where he heard the predictable complaints about his energy policy.
The
governor wants federal price caps on wholesale energy costs beyond the limited
caps now in place, and the president understands, and numerous historical
examples show, that caps lead to further shortages.

??That's an honest difference of opinion, but Davis is trying to portray the
Bush administration's position in the worst possible light. The governor keeps
talking about Evil Texas Power Generators, which have become the locus of
blame
for a governor who has remained frozen in the face of his first gubernatorial
crisis.

??The ambush nature of the visit _ anti-Bush protesters, Democratic press
conferences highlighting the "victims" of price gouging _ is the handiwork of
the two taxpayer-funded Gore campaign operatives hired by Davis, according to
a
Washington Times account.

??Like we said, Bush must have a strong constitution to walk into this sort of
hostile situation.

??Still, Bush has the facts on his side when he argues against the "quick-fix"
of price caps. Caps reduce the incentive for producing electricity, which
depresses, rather than increases, supply.

??A key reason for the current electricity imbalance is because of
government-imposed caps on the retail price utilities can charge users.
Further
distorting the market will only exacerbate the problem.

??Vice President Dick Cheney, speaking on a national TV news show on Tuesday,
called the Davis rhetoric "goofy." The genesis of the electricity problem in
California is too little supply, caused largely by California's resistance to
build new power plants, and a flawed restructuring plan that distorted the
market. Cheney noted _ correctly _ that at key points during the crisis the
governor refused to act.

??Even some Democrats concede that the governor could have kept the energy
problem from becoming a crisis had he allowed slight rate increases and
long-term contracts back when utility executives began warning him of the
looming power troubles.

??There was even a time not so long ago that Davis could have slowed his angry
blame-game rhetoric and gotten to work on the problem. He could have engaged
the
new administration rather than heating up the rhetoric. He could have looked
for
ways to increase power generation, rather than threaten power generators.

??On Tuesday a Davis spokesman deflected attention from the governor's falling
poll numbers by pointing to Bush's flagging numbers in the state. Both men
aren't doing well in California, but the issue should be a bigger concern to
the
governor of the state, rather than to a president who won office without
California support.

??Polls aren't what matter now. In Los Angeles, Bush said: "Energy debates
sometimes throw off some sparks, but this is not time for harsh rhetoric. It's
certainly no time for name-calling. It's time for leadership."

??Was Davis listening?

??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune

??(c) 2001, The Orange County Register (Santa Ana, Calif.).

??Visit the Register on the World Wide Web at http://www.ocregister.com/

JOURNAL-CODE: OC

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??????????????????????Copyright 2001 San Jose Mercury News

????????????????????????????San Jose Mercury News

???????????????????????????May 30, 2001, Wednesday

KR-ACC-NO: SJ-GILLMOR-COL

LENGTH: 756 words

HEADLINE: San Jose Mercury News, Calif., Dan Gillmor Column

BYLINE: By Dan Gillmor

BODY:

??California Gov. Gray Davis got another stiff-arm from President Bush on
Tuesday, this time in person. Once again, the president refused to intervene
in
any near-term plan to deal with the soaring price and decreasing reliability
of
energy here, a double whammy that will help tilt the state into a recession
later this year.

??Davis is undoubtedly right when he charges energy producers with an
old-fashioned practice called price-gouging. Another way to say this is
"charging what the market will bear" -- but that's not the way to stir up a
public that seems to consider cheap, plentiful power a fundamental human
right.

??Bush is right that this problem needs a long-term solution, on the principle
that the wrong kind of short-term fix would only make things worse later on.
But
that's just cover for his administration's misguided, drill-and-burn energy
policy.

??Neither of these political pros is telling the whole truth, needless to say.
And, barring intervention from a power higher than political expediency, don't
hold your breath waiting for that kind of honesty.

??If Bush wanted to tell the truth, he might admit that his policy is tilted
toward his political and financial supporters, many of whom come from his home
state of Texas. He'd acknowledge that California's propensity for voting for
Democrats in statewide elections doesn't make him all that excited about
bailing
us out at the expense of the people who backed him.

??Bush may be correct to say that we can produce our way out of the current
mess. But a man who talks about the long term can't hide the fact that you
can't
produce affordable non-renewable resources forever.

??So an honest federal plan would emphasize conservation, not brush it aside
as
the vice president and other administration officials have cavalierly done. An
honest plan would not pay mere lip service to renewable energy sources.

??But Davis is no slouch when it comes to denying reality, either. Oh, he
admits that California's government -- albeit with the help and support of the
energy companies -- enacted the bogus electricity deregulation plan. But he
would win more points if he also noted that the current system all but invites
the producers to use what economists quaintly call "market power" to jack up
prices so high.

??He forgets that California and the nation lived in a fantasyland of
unsustainably low energy prices during much of the 1990s. We persistently fail
to learn anything from history, namely that commodity prices, even ones that
are
subject to rigging, tend to fluctuate in extreme ways. And when you're
depending
on non-renewable energy sources, the trend line will be up.

??Davis turns his administration's power purchases, on behalf of the
utilities,
into state secrets and insists that we trust him. Well, we don't. He hasn't
earned it.

??One of the most depressing moments in the recent battle over federal income
tax rates came when Bush told Congress that the best way to help California's
hard-hit energy users was to cut taxes. Maybe we should just send those refund
checks to Texas, where they apparently belong.

??If Davis had even an ounce of risk-taking in his soul, he'd find a better
way
to deal with this situation than launching lawsuits, making threats and
stirring
up resentment. He's not much of an economist or forward-thinker, but he's a
truly low-class demagogue.

??Davis should thank Bush and Congress for the tax cut -- and then urge
California to put it to the best possible use. He should suggest we pool
California taxpayers' share of that money, and embark on a crash program to
curb
energy consumption and develop renewable sources.

??Get the brightest minds in the technology and venture-capital communities to
join this crusade. And put it on the ballot for voters to decide. I'm betting
they'd approve, overwhelmingly.

??Let's face reality here. The energy producers are going to take as much of
our money as they can. This president isn't about to stop it.

??A governor with vision would be looking for a way to stick it to the
producers, not just in court, but in the way they understand best. Let's stop
complaining about this market. Let's change the balance, in our favor.

??--Dan Gillmor's column appears each Sunday, Wednesday and Friday. Visit
Dan's
online column, eJournal (www.siliconvalley.com/dangillmor). E-mail
dgillmor@sjmercury.com; phone (408) 920-5016; fax (408) 920-5917.

??-----

??To see more of the San Jose Mercury News, or to subscribe to the newspaper,
go to http://www.sjmercury.com

JOURNAL-CODE: SJ

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??????????????Copyright 2001 Knight Ridder/Tribune Business News
??????????????????????Copyright 2001 San Jose Mercury News

????????????????????????????San Jose Mercury News

???????????????????????????May 30, 2001, Wednesday

KR-ACC-NO: SJ-GOV-BUSH

LENGTH: 1127 words

HEADLINE: Bush Scheduled to Make Crucial Trip to California

BYLINE: By Jim Puzzanghera

BODY:

??WASHINGTON--When President Bush steps off Air Force One on Monday night in
Los Angeles, it will be exactly 209 days since he last set foot in the
nation's
most populous state -- a politically damaging self-imposed exile that he will
try to start repairing during a two-day visit.

??Much has happened since then-candidate Bush boarded a plane at San Jose
International Airport on Halloween after a final campaign appearance in the
state at a Christian drug-rehabilitation center in the city.

??Bush won the presidency, but got walloped in California by former Vice
President Al Gore. And an electricity crisis has engulfed the state, helping
make energy a national issue for the first time in decades and threatening the
political future of Gov. Gray Davis. ?

??Those factors help explain why Bush has gone four months into his presidency
and will have visited 29 other states before trekking to California. In
contrast, Bill Clinton visited California his fifth week in office in 1993, as
did Gore, the first of more than 100 combined visits by the two during their
eight years in the White House.

??California is not nearly as important to Bush politically as it was to
Clinton, who needed the state for his re-election. But California has become
the
battleground for energy policy, which is why he is finally coming this week
after being urged to do so by many state Republicans.

??Bush unveiled his national energy plan earlier this month, citing
California's electricity crisis as evidence the nation needs to embark on a
massive increase in oil, gas, coal and even nuclear energy production. Davis
has
emerged as the Democratic Party's leading spokesman against the president's
plan, charging that the president is more interested in helping his friends in
the energy industry than the people of California.

??Democrats have started running TV ads in the state criticizing Bush's
handling of the crisis. And while Bush appears in Los Angeles and Fresno on
Tuesday, House Minority Leader Richard Gephardt, D-Mo., and five Bay Area
House
Democrats will hold a hearing on California's energy problems in Oakland.

??Leon Panetta, the former Monterey Congress member who also served as
Clinton's chief of staff, said Bush had made a serious error in not paying
closer attention to California's problems.

??"If I were chief of staff to the president, I would strongly recommend they
fire whoever is advising them on California, because I think they've made
every
mistake in the book," Panetta said. "He can try to do some repair work, which
I'm sure this trip is all about, but he's incurred some heavy damage."

??The Bush administration should have realized that even though he lost the
state to Gore by 1.3 million votes, California voters are independent-minded
and
capable of shifting their allegiances, Panetta said.

??"In politics, things can change, and they do -- particularly in this state,"
he said. "There's no question Republicans have taken a big hit in the past few
years, but here you have a perfect opportunity: You have a Democratic governor
probably in deep trouble because of this crisis, and at the very moment when
Republicans could make some very important inroads into what they're doing to
help this state they're walking away from it."

??Indeed, a Field Poll released last week showed Davis' approval rating had
plummeted to 42 percent, and that voters, by a 10-point margin, were not
inclined to support his re-election.

??Bush has personally urged outgoing Los Angeles Mayor Richard Riordan to
challenge Davis, and the Field Poll showed him neck-and-neck with Davis should
he decide to run. Republicans would dearly love to retake control of the
California governor's office, but to do so Bush must make the case that he is
trying to help the state with its energy problems.

??One of Bush's top political advisers, Karen Hughes, dismissed the suggestion
that the president had not been attentive to California, saying he had been
focused on the state's problems, and touting his trip this week as taking
place
"very early in his administration."

??"He made aggressive efforts to visit California throughout his campaign, and
he came up short in the vote on Election Day in California," she said. "But he
will not let that deter him from doing what is right for California."

??Dan Schnur, a Republican consultant who was an aide to former Gov. Pete
Wilson, said Bush's trip "comes at a smart time strategically," as Davis has
gone on the offensive to deflect blame for his own handling of the electricity
crisis.

??Davis, joined by other top Democrats in the state and even some Republican
officials, argues that the imposition of temporary caps on the price of
wholesale electricity would contain soaring electricity prices until several
new
power plants under construction are online. Davis has started strongly
criticizing Bush for not pushing federal regulators to institute the price
caps
in the West.

??Bush believes that price caps will only make the situation worse, by
discouraging investment in new power plants, White House aide Hughes said.

??Bush plans to highlight one of his actions to help California. Tuesday,
he'll
visit the Camp Pendleton Marine Corps base in Southern California to tout the
directive he gave to federal facilities to conserve energy during electricity
emergencies in the state this summer. Bush also plans to meet with Davis to
discuss the electricity crisis.

??"The trip gives the president his first opportunity to make his case
directly
to the people of California," Schnur said. "You can have the best argument in
the world, but if you're making it from 3,000 miles away, it's awfully hard to
close the sale."

??The difficulty Bush has had in getting out the message that he his trying to
help California was evident in other Field Poll results last week, which
showed
that 54 percent of Californians think Bush is doing a poor or very poor job in
trying to improve the state's energy situation. In contrast, Davis receives a
poor or very poor rating from 38 percent of the people.

??Rep. George Radanovich, R-Fresno, said Bush had taken a hit because he had
not made his case directly to the state, while Davis has been hammering the
White House for months. Radanovich was among the California Republicans who
personally urged Bush and Vice President Cheney to visit the state.

??"He needs to come out and physically say he does care for the state and he's
willing to tackle the problems for the state," Radanovich said of Bush. "To
some
extent I think Californians are being misled by the governor, so if he
addressed
that I think he could help the situation."

??-----

??To see more of the San Jose Mercury News, or to subscribe to the newspaper,
go to http://www.sjmercury.com

JOURNAL-CODE: SJ

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?????????????????Copyright 2001 The Chronicle Publishing Co.

?????????????????????????The San Francisco Chronicle

????????????????????MAY 30, 2001, WEDNESDAY, FINAL EDITION

SECTION: NEWS; Pg. A1

LENGTH: 1220 words

HEADLINE: Bush, Davis fail to settle dispute;

President travels to state but won't budge on rate caps

SOURCE: Chronicle Political Writer

BYLINE: Carla Marinucci

DATELINE: Los Angeles

BODY:
President Bush and Gov. Gray Davis, who have sparred long-distance for weeks
about California's power woes, clashed in person yesterday over their vastly
different views on the need for energy price controls.

???Bush, in a speech before the World Affairs Council in Los Angeles, argued
that California's energy crisis demands "action, not politics, not excuses,"
and
he ruled out federal price controls on the wholesale costs of energy, saying,
"We will not take any action that makes California's problems worse."

???Davis, however, argued that California's consumers are getting "a raw deal"
without price limits. He said he will sue the federal government to impose
controls, which he deems essential to fixing the state's energy problems.

???Emerging from a 35-minute meeting with Bush -- nearly twice as long as
scheduled -- Davis said the session was "informational, businesslike" but "we
still have a fundamental disagreement over whether or not California is
entitled
to price relief."

???"I don't think it's a matter of philosophy or ideology. It's a matter of
law," Davis said.

???Federal agencies "made a determination in November, and again Dec. 15, that
the California market was dysfunctional, prices were too high, . . . and we
are
entitled to some form of price relief," the governor said.

???Davis warned that without price controls the state would spend $50 billion
on power, which could send the economy spiraling down and affect the nation.

???The meeting, although described by both sides as cordial, highlighted deep
philosophical and political differences between Bush and Davis over the
state's
energy crunch. Those opposing views have been underscored by increasingly
harsh
rhetoric between top Bush administration officials, including Vice President
Dick Cheney, and the governor and his top aides.

???Energy has dominated the California political landscape in a way no one
could have predicted during last fall's campaign. Field Polls released last
week
show Californians are disappointed in the performance of both men on the
energy
front. Rolling blackouts and rising utility bills account in large part for an
18 percentage point drop in the once-popular Davis' job approval rating from
January to May, analysts say.

???Bush's first trip to California as president is intended to counter the
governor's repeated criticism that he has not helped the state solve the
energy
crisis. Both men tried to spin the trip -- and yesterday's personal meeting --
to gain a measure of public support.

???Political analyst Sherry Bebitch Jeffe said Bush's visit could help him
repair his image in California, where Davis has tied the president to big oil
interests.

???BULLY PULPIT

???"For too long, (Bush) has ceded the bully pulpit to the governor," allowing
him to be tied to "oil buddies" in Texas, Jeffe said after the president's
speech in Los Angeles. "Did he sound like an oil guy today? I was looking
around
for the tree he was gonna hug."

???In a 22-minute speech to an audience of several hundred, Davis among them,
Bush said, "for too long -- and too often -- too many have wasted energy
pointing fingers and laying blame. . . . Energy is a problem that requires not
excuses, but action. And blame shifting is not action -- it is a distraction."

???Bush repeated his opposition to price limits, which, he said, "do nothing
to
reduce demand, and they do nothing to increase supply."

???Davis and other Democrats, including California Sen. Dianne Feinstein, have
for months urged Bush to order price controls. Garry South, Davis' senior
political adviser, charged yesterday that Bush, not the governor, was playing
politics with California's future.

???The president must come to grips with "the notion that adhering to rigid
ideology in the face of an existing law, which requires him to act, is not
just
some kind of a face off with the governor of California," South said. "It
actually endangers the national economy."

???'GREEDY ENERGY COMPANIES'

???Bush's speech, which addressed trade, the economy and tax issues as well as
energy, was interrupted by lengthy heckling from three protesters, including
former Green Party U.S. Senate candidate Medea Benjamin. The protesters,
yelling
"stop the greedy energy companies," and "price caps now," were hustled out,
and
one was arrested.

???But the president, to warm applause, pressed on with his talk, saying that
the administration has taken specific steps to assist California, including
working with Davis "to speed the approval of new power plants, expand
electricity production, and increase the flow of natural gas into the state."

???Bush also stressed conservation as "an important part of the energy
equation." He said his proposed energy plan "encourages renewable sources of
energy, including "safe and clean nuclear power, wind, solar, biomass."

???And the president repeated his commitment to uphold the moratorium on
offshore oil drilling in California.

???Bush also said he will take aggressive action to ensure that consumers are
protected against price gougers.

???"The federal government takes very seriously our responsibility to make
sure
that companies are not illegally gouging consumers," he said. "We will protect
consumers against abuses."

???In Los Angeles, and earlier in the day at Camp Pendleton near San Diego,
Bush attempted to dismiss the debate over energy as political posturing.

???'TIME TO PUT ASIDE POLITICS'

???"It's time to put aside politics and focus on the best interests of the
people," he told several hundred Marines at Camp Pendleton. "This is no time
for
harsh rhetoric. This is no time for name calling. It is time for leadership.
It
is time for results."

???Bush said he will ask Congress to appropriate $150 million for "low-income
energy assistance" in addition to the $300 million for such aid already in his
budget.

???The president also said he will direct Energy Secretary Spencer Abraham to
smooth the way for permits and easements needed to "unplug the Path 15
bottleneck" -- a problem with the transmission grid that restricts the flow of
energy from Southern to Northern California.

???Before their private meeting, Bush and Davis met in a closed-to-the-press
session with a dozen business leaders, including the heads of Santa Clara's
Intel Corp. and National Semiconductor Corp., to discuss the energy crisis.

???"Both the governor and the president seemed fairly inquisitive," said one
participant, John Woolard, chief executive of Alameda software-maker Silicon
Energy Corp. "They wanted to know what was actually realistic to solve the
problems."

???That 45-minute meeting, also attended by Los Angeles Mayor Richard Riordan,
apparently went more Bush's way than Davis. The business leaders supported the
president's calls for entrepreneurs to help solve California's troubles, and
no
one brought up the topic of price controls.

???Woolard said Bush and Davis "seemed surprisingly comfortable with one
another," although it was Bush who clearly was in charge of the talks.

???Overall, he said, Bush was "sympathetic to California's problem and wanted
to do whatever he could, within certain constraints."

???Price limits, Woolard concluded, obviously were one such
constraint.Chronicle staff writer David Lazarus contributed to this report. /
E-
mail Carla Marinucci at cmarinucci@sfchronicle.com.

GRAPHIC: PHOTO, Gov. Gray Davis greeted President Bush before a meeting of the
World Affairs Council in Los Angeles. / Associated Press

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?????????????????????????The San Francisco Chronicle

????????????????????MAY 30, 2001, WEDNESDAY, FINAL EDITION

SECTION: NEWS; Pg. A8

LENGTH: 626 words

HEADLINE: Democrats sponsor energy talks;

Bush still at odds with call for federal support of conservation

SOURCE: Chronicle Staff Writer

BYLINE: Rick DelVecchio

DATELINE: Oakland

BODY:
Francie Moeller owns a portable generator, but don't ask her to turn it on
when
she's home alone during a rolling blackout. She is disabled and can't pull the
starter cord.

???Generators with powered starters are available, but at $5,000 they are not
in Moeller's price range.

???"And please don't ask me to unplug my appliances," said Moeller, who uses a
wheelchair and serves as chairwoman of the California Democratic Party
Disability Caucus.

???On the same day that President Bush visited California to promote his
energy
plans, Moeller and a dozen other speakers testified yesterday in Oakland at a
congressional hearing designed to advance Democrats' ideas of what to do about
the power crisis.

???Most of the speakers during the two-hour hearing argued for the need for
price caps on wholesale power to take the strain off consumers like Moeller
and
to keep the state and national economy from sputtering. They also advocated
more
federal involvement in conservation, especially in demanding that
manufacturers
develop more efficient appliances, and in pushing solar and wind power as
long-term solutions.

???The hearing, organized by Rep. Barbara Lee of Oakland and joined by seven
other House Democrats, including the headliner, House Democratic Leader
Richard
Gephardt of Missouri, served to buttress Gov. Gray Davis in his efforts to
convince President Bush of the need for price caps.

???"Price constraints on wholesale prices -- that's the help he (Davis) needs
now," Gephardt said.

???Bush, at a short meeting in Los Angeles yesterday with Davis, repeated his
opposition to price levels. Gephardt said he hoped Bush returned to California
and stayed longer to hear what power users had to say, arguing that their
views
ultimately would steer government's response to the crisis.

???A Democratic bill to implement wholesale price caps failed to reach a
bipartisan compromise to move it out of a House committee last week. Gephardt
said that negotiations would continue but that he was prepared to seek the
support of a majority of House members to discharge the bill to the floor.

???Gephardt said the power supply crisis that affects California, Oregon and
Washington posed a threat to the national economy. "My worry is when you put
gasoline prices that are going up all over the country with electricity prices
that are up all over the West Coast, you really have a reduction in consumer
buying power," he said.

???Yesterday's hearing also took testimony from labor and seniors'
representatives, from small-business managers and from a school
superintendent.

???Thane Kreiner of the biotech firm Affymetrix said two rolling blackouts
earlier this month had shut down the firm's Emeryville plant at a cost of $
125,000 in lost production. In order to avoid a far more damaging outage at
the
firm's Sacramento plant, the company has invested in a $1.5 million backup
generator.

???"Clearly, we'd have liked to spend that money on other things," Kreiner
added, saying that many small businesses couldn't afford the luxury of backup
power.

???Gary DeAtley, president and CEO of California Sun Dried Foods, worries that
blackouts will hit during the months when his product is in electric-powered
cold storage.

???Mary Frances Callan, superintendent of the Pleasanton Unified School
District, said the district next year would pay the equivalent of $155 per
student for power, double what it paid three years ago. She totaled the cost
in
terms of lost opportunity for students.

???"We could buy a half-time, fully credentialed librarian for each school, or
an additional half-time counselor," she said. "I could have 9,000 additional
textbooks, or 23,000 additional library books."E-mail Rick DelVecchio at
rdelvecchio@sfchronicle.com.

GRAPHIC: PHOTO, House Democratic Leader Richard Gephardt (speaking to the
media)
and California Reps. (from left) Ellen Tauscher, Lynn Woolsey, Barbara Lee and
Nancy Pelosi advocated for conservation yesterday. / Craig Lee/The Chronicle

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?????????????????????Copyright 2001 Gannett Company, Inc.

??????????????????????????????????USA TODAY

????????????????????May 30, 2001, Wednesday, FIRST EDITION

SECTION: NEWS; Pg. 3A

LENGTH: 439 words

HEADLINE: Bush rejects cap on electricity prices Davis pledges to go to court

BYLINE: Laurence McQuillan

???and Martin Kasindorf

DATELINE: LOS ANGELES

BODY:
LOS ANGELES -- President Bush rejected California Gov. Gray Davis' plea for a
temporary cap on wholesale electricity prices Tuesday. Davis responded that
his
state was getting a "raw deal" and vowed to go to federal court to force
action.

??The men spent 40 minutes discussing the state's energy crisis. A power
shortage has brought "rolling blackouts" that are expected to worsen in the
summer heat. Electricity rates have skyrocketed.

??"Price caps do nothing to reduce demand, and they do nothing to increase
supply," Bush told the Los Angeles World Affairs Council before meeting with
Davis. Bush has opposed price caps since the national energy crisis of the
1970s. He said they might sound appealing, but "their result will ultimately
be
more serious shortages and, therefore, even higher prices."

??Davis wants the Federal Energy Regulatory Commission to limit wholesale
electricity prices, which have hit record highs. But on Tuesday, a federal
court
rejected a lawsuit filed by the city of Oakland and two politicians that would
have ordered the commission to limit prices. Last month, the commission
ordered
a one-year cap on electricity prices during power emergencies but did not set
a
price. Critics say that makes the order useless.

??Bush told Davis he would have federal officials look into allegations of
price gouging by energy suppliers. Davis has made that accusation against
suppliers from Bush's home state of Texas.

??"Energy debates sometimes throw off some sparks," Bush said earlier Tuesday.
"But this is no time for harsh rhetoric."

??"It's time to put politics aside and focus on the best interests of the
people," Bush said after touring base facilities designed to conserve energy.
The federal government is the biggest user of electricity in California.

??No one expected the Bush-Davis meeting to change any minds. Democrat Davis,
considered a contender for president in 2004, has laid blame for the power
woes
at the feet of his GOP predecessor, Pete Wilson, and Bush.

??California Republicans would like voters to punish Davis in the
gubernatorial
election next year. Polls show voters in the nation's most populous state
don't
think either politician is doing enough to ease energy problems.

??Davis said he told Bush that the electricity crisis could spark a recession
in California that could drag the U.S. economy into recession. "That is not
good
for any American," he said. "It's not good for President Bush. It's not good
for
me."

??Bush said he will ask Congress to approve $ 150 million to help poor
families
meet their energy needs, in addition to $ 300 million he has already
requested.

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??????????????????????Copyright 2001 The Washington Post

?????????????????????????????The Washington Post

????????????????????May 30, 2001, Wednesday, Final Edition

SECTION: EDITORIAL; Pg. A18

LENGTH: 572 words

HEADLINE: California's Power Clash

BODY:

??PRESIDENT BUSH met California Gov. Gray Davis yesterday, and the encounter
did not go well. Mr. Davis emerged and headed straight for the microphones,
where he repeated his denunciations of the Bush administration's attitude
toward
California's power crisis. The governor's rhetoric, which in the past has
demonized Texas energy companies, is unappealing. But the
administration's stance is worse.

???The Bush-Davis argument centers around price caps for wholesale
electricity.
Mr. Davis points out that generators have been charging astronomical prices
for
power recently: In the first three months of this year, they pocketed more
than
five times the amount they were paid in the first quarter of 1999. Moreover,
the
recent price spikes reflect manipulation by suppliers, who can drive the spot
market skyward by withholding electricity when buyers are desperate for it.
Mr.
Davis rightly argues that this state of affairs justifies temporary price
caps.
These might remain in effect for 18 months or so, by which time power plants
currently being built would have started supplying electricity to California,
reducing the ability of the generators to manipulate the market.

???The White House counters that it objects to price caps on principle, since
price suppression exacerbates shortages. In nearly all cases, this is true:
Lower prices boost consumption and reduce supply, leading to scarcity. But the
electricity market is different. For one thing, retail prices are set
separately
from wholesale ones, so high wholesale prices do not stimulate conservation
directly. For another, it takes around two years to build a power plant, so
high
wholesale prices cannot stimulate increased supply in the short term. If
prices
were capped at a level high enough to ensure a decent profit, but lower than
their recent level, California's shortages would not worsen and its economic
outlook would greatly improve. It's even possible that shortages would grow
milder, because price caps might remove the incentive for generators to drive
up
prices by withholding supply.

???The emptiness of the administration's rhetoric is demonstrated by the fact
that even the Federal Energy Regulatory Commission, which has shared the White
House's tough stance toward California, has proposed a complicated scheme to
control California's wholesale prices. The FERC's plan is weak: For example,
it
exempts energy marketing companies from its price controls, thus allowing
generators to get around the caps by selling power to the marketers, who would
then resell it at uncapped levels. But at least the FERC has accepted the
principle that some kind of federal market control is necessary.

???The Bush administration should resist the temptation to fall back on
standard anti-price- control rhetoric. Mr. Davis, for his part, should soften
his anti-industry talk and accept the fact that part of the problem is for
California to fix: For a long time the governor resisted raising retail prices
to stimulate conservation, and even now he refuses to allow electricity costs
to
vary by the hour, a measure that would save power at the times when it is most
necessary. Unless both president and governor change their tune, California's
economy may tank, possibly bringing the rest of the country down with it. And
the idea of power deregulation, beloved by the White House, will be rendered
politically unsalable for many years to come.

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?????????????????????????????The Washington Post

????????????????????May 30, 2001, Wednesday, Final Edition

SECTION: A SECTION; Pg. A02

LENGTH: 802 words

HEADLINE: Bush Says No to Davis Bid For Energy Price Controls; California
Governor Vows to Sue U.S. for Relief

BYLINE: Mike Allen, Washington Post Staff Writer

DATELINE: LOS ANGELES, May 29

BODY:

???President Bush today rejected Gov. Gray Davis's appeal for federal price
controls on California's soaring electricity prices, prompting Davis to
announce
the state plans to sue the federal government to force it to act.

???In a meeting with Davis, Bush offered to work with California to keep power
flowing in the nation's largest state, a departure from previous
administration
statements that California would largely be on its own to cope with price and
supply problems this summer.

???The president said, however, that while a federal cap on the wholesale
price
of electricity "may sound appealing" to those struggling to pay higher energy
bills, such controls would lead to more serious energy shortages and higher
prices.

???Davis, a Democrat, said afterward that he and the president had "a
fundamental difference" on the question of whether the Federal Energy
Regulatory
Commission should order "some form of price relief." Davis has said he wants
the
commission to place a cap on the wholesale price of electricity, which Bush
contends would make California's situation worse by increasing demand but not
supply.

???"We will file a lawsuit against the Federal Energy Regulatory Commission
for
failing to discharge its legal obligations," Davis said.

???The 35-minute meeting with the governor was the centerpiece of Bush's first
trip to California since he lost the state in November's election. The
president
had signaled earlier in the day that he hoped it would lead to a de-escalation
in the accusations that have been flying for months between Davis and the
White
House over the energy crisis.

???"My administration is committed to doing our part to help California as it
confronts its energy problems," Bush said in an address to the Los Angeles
World
Affairs Council. "All our efforts are guided by a simple test: Will any action
increase supply at fair and reasonable prices? Will it decrease demand in
equitable ways?"

???The viability of a suit by the state against the federal government over
the
price controls issue was cast somewhat in doubt today by a ruling by a federal
appeals court in San Francisco, which turned down a request by state
Democratic
lawmakers for a cap on the wholesale price of electricity.

???The problems in California's power market, which had its roots in a
troubled
effort by the legislature to deregulate electric utilities, has imperiled the
state's fiscal health, driven utilities to the brink of bankruptcy and given
rise to a widespread public pessimism here that pollsters have found to be the
worst in years.

???The governor brought charts and graphs to his meeting with Bush to try to
convince the president that the failure of the federal government to institute
price caps could have ripple effects, especially in the technology industry.
Davis said California is headed toward spending $ 50 billion more on power
this
year than it did two years ago. "It could well trigger a recession in
California, which could drag down the American economy into recession," he
said
he told Bush.

???Davis also released a letter from 10 prominent economists -- including
Alfred Kahn of Cornell University, the architect of airline deregulation --
arguing that its charter requires FERC to "act to ensure that wholesale
electricity prices are just and reasonable."

???Since the political future of Davis, who hopes to run for president in
2004,
and Bush could depend on how far California's power disruptions spread, and
where voters place the blame, today's meeting was designed as much for public
consumption as it was for reaching any particular deal.

???Since taking office, Bush has visited 29 other states before venturing into
California, which he lost to Vice President Al Gore by 12 percentage points.
The
president's advisers said they knew there was a risk in taking an unpopular
view
on a serious problem in a state where he does not have broad support, but
state
Republicans have been urging Bush to pay more attention to California as they
look ahead to the House elections of 2002.

???White House Chief of Staff Andrew H. Card Jr., who sat in on the meeting,
said Bush told Davis that the administration wants "the Federal Energy
Regulatory Commission and other federal agencies to be diligent in making sure
that there was no illegal price gouging impacting consumers -- not just in
California, but anywhere in America."

???Unlike former president Bill Clinton, who was highly popular in California
and seemed to revel in lingering to listen to Californians' tales, Bush had a
whirlwind schedule that kept him largely out of the sight of the general
public.

???At the start of the three-day trip, he retired to his hotel after arriving
in Los Angeles on Monday evening. Bush began this morning at the Camp
Pendleton
Marine Corps Base.

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?????????????????????????????The Washington Times

????????????????????May 30, 2001, Wednesday, Final Edition

SECTION: PART A; COMMENTARY; EDITORIALS; Pg. A14

LENGTH: 430 words

HEADLINE: Gov. ?Gray's dim fairy tale

BODY:

??California's power crisis has already reached fairy tale proportions, and a
new chapter was written yesterday when Gov. ?Gray Davis met briefly with
President George W. ?Bush to discuss the situation, which calls for the
construction of new power plants.

??With grim subtlety, Prince of Darkness Davis has accused out-of-state power
companies, many of them from Texas (hint, hint) of causing, or at least
abetting, California's rolling blackouts by gouging consumers with high
electricity prices. ?Mr. ?Davis maintains that price caps are the only
solution
and recently enlisted the Democratic Party's wicked stepsisters Mark Fabiani
and
Chris Lehane (who also happen to work for Southern California Edison, which
has
also lobbied for price caps) to further spread this Cinderella story, at a
gouging price of $30,000 per month.

??While some of California's electricity prices have been tall-tale sized, the
state's real problem is that many of its citizens and their representatives
have
spent a decade living in a wonderland in which power is as clean as Snow White
and abundant as the Seven Dwarfs, even though power plants have been banished
like an evil queen. ?Even Mr. ?Davis has recently acknowledged that
California's
goofy deregulation scheme and its dismal failure to build power plants in well
over a decade has contributed to the problem.

??He should have also acknowledged that he accepted, according to public
interest organization Common Cause, princely gifts of more than $600,000 in
campaign donations from power generators, utilities and marketers during the
1999-2000 campaign. ?Mr. ?Davis also might have mentioned that he had a chance
to solve the problem a year ago. ?That is when consumers in San Diego began
receiving higher-than-usual utility bills and energy experts recommended
suspending California's version of "deregulation" and locking in long-term
supply prices for what now seem like Lilliputian prices. Instead, Mr. ?Davis
stalled, then subsequently killed the proposal.

??When those prices disappeared down the rabbit hole, Mr. ?Davis held a
queen-of-hearts-style hearing before debasing all things Republican. ?Yet
Republicans are elected to office in California about as often as tourists
wear
three-piece suits to Disneyland.

??Interestingly, 60 percent of Californians believe his job performance has
been "poor," according to the non-partisan Public Policy Institute of
California. ?And that means that, as far as his presidential prospects are
concerned, Mr. ?Davis is no longer the prince charming of the Democratic
Party.

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????????????????Copyright 2001 News World Communications, Inc.

?????????????????????????????The Washington Times

????????????????????May 30, 2001, Wednesday, Final Edition

SECTION: PART A; Pg. A8

LENGTH: 584 words

HEADLINE: GOP: Davis' woes to help revive party

BYLINE: Ralph Z. ?Hallow; THE WASHINGTON TIMES

BODY:

??Some California Republicans think their party, which lost heavily in the
1998
elections and again last year, may be on the way to political resurrection.

??They credit the state's energy crunch, the plunging popularity of Democratic
Gov. ?Gray Davis and the growing approval of President Bush with reviving
Republican hopes in California.

??As recently as six months ago, Mr. ?Davis was considered nearly invulnerable
for re-election in 2002. He had trounced his Republican opponent, Dan Lungren,
for the governorship in 1998, with the Democrats sweeping all but two
statewide
offices - the secretary of state and the insurance commissioner.

??But California's energy brownouts have given Mr. ?Davis a black eye.

??"Six months ago, people would have said this guy is Superman," Jim Camp, the
California Republican Party political director, told The Washington Times.
"Now, people aren't impressed that he is blaming everyone else for the energy
problem and has hired two former Clinton political hit men, at taxpayers'
expense, to try to fix his political problem."

??California Secretary of State Bill Jones, a Republican, agreed, noting that
Mr. ?Davis' "approval rating is dropping very dramatically in the California
Field poll. ?That and his lack of leadership and the images of the kind of
people supporting him and opposing President Bush are making it look good for
Republicans next year."

??Mr. ?Jones was referring to protesters from socialist organizations,
pro-choice women, the Green party and the statewide Democratic Party who tried
to storm the grounds of the Marine Corps base at Camp Pendleton where Mr.
?Bush
was speaking yesterday.

??The prospect of voters seeing TV news coverage of such a coalition
supporting
Mr. ?Davis delighted California Republicans.

??"Your average voters aren't going to be amused when they see these people
aligning themselves with Gray Davis against President Bush," Mr. Camp said.
"Basically, they're ecoterrorists on the extreme left and with strong
socialist
ties."

??The biggest mistake Mr. ?Davis made so far, some Republicans think, is in
calling for price caps on wholesale electricity costs in the state and
criticizing Mr. ?Bush for supporting a free-market solution to the state's
energy shortage instead.

??A legislated retail price ceiling on electricity was part of a 1996
deregulation bill that took the shackles off wholesale power prices, causing
the
state's current rolling blackouts.

??The 9th Federal Circuit Court of Appeals declined yesterday to order federal
energy regulators to cap wholesale electricity prices - a blow to Mr. ?Davis.

??Whether Republicans in California are up to explaining the basic economics
involved - and supporting Mr. ?Bush's supply-side solutions - is another
matter,
some party officials and consultants said privately. Meanwhile, Mr. ?Davis is
taking the hit in opinion polls.

??"It isn't that people blame Gray Davis for the energy problem," said Mr.
Jones, the only declared candidate for the Republican gubernatorial
nomination.
"They know the problem began before he was elected governor. But it's a
leadership question. ?We had a crisis in California around this time last
year,
and he wasn't decisive."

??Mr. ?Davis hired as communications consultants former Al Gore campaign
spokesman Chris Lehane and former Clinton-Gore scandal controller Mark
Fabiani,
at a combined monthly fee of $30,000 - which Mr. ?Jones claims is incensing
Republicans, independents and some Democrats in the state.

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????????????????????Copyright 2001 Chicago Tribune Company

???????????????????????????????Chicago Tribune

??????????????May 30, 2001 Wednesday, NORTH SPORTS FINAL EDITION

SECTION: News; Pg. 1; ZONE: N

LENGTH: 1008 words

HEADLINE: Bush, Gov. Davis sound like Texas, California on energy

BYLINE: By Vincent J. Schodolski and Karen Brandon, Tribune staff reporters.
Tribune staff reporter V. Dion Haynes contributed to this report.

DATELINE: LOS ANGELES

BODY:

??After a day of polite but unmistakable political posturing, President Bush
and California Gov. Gray Davis failed to reach agreement Tuesday on controls
for
energy prices in this state caught in a critical electricity shortage. Davis
said he would move quickly to seek relief in federal court.

??Bush, who lost California in the 2000 election, made his first trip to the
nation's most populous state since becoming president and left no doubt that
he
rejected Democrat Davis' demands for caps on the price of energy--mainly
natural
gas from the president's home state of Texas.

??"Price caps do nothing to reduce demand and they do nothing to increase
supply," Bush said during a midday address to the Los Angeles World Affairs
Council. The president's comment brought enthusiastic applause from the
audience
of more than 1,000, which included a large number of business people. Davis
sat
stone-faced a few feet from the rostrum where the president spoke.

??In an earlier appearance, Bush also denounced the posturing surrounding
energy politics.

??"Energy debates sometimes throw off some sparks," he said. "But this is no
time for harsh rhetoric. It's certainly no time for name calling. It's time
for
leadership and results. It's time to put politics aside."

??Bush and Davis had a 35-minute meeting following the president's lunchtime
address in Los Angeles. Afterward Davis made clear he plans to pursue other
approaches in his quest for price controls. While the governor said he and the
president had found areas of common ground, he said there is a major gulf
between the two on prices.

??"We still ... have a fundamental disagreement over whether or not California
is entitled to price relief," Davis said after his meeting with the president.
"I don't think it is matter of philosophy, or ideology. It is a matter of
law."

??State market 'dysfunctional'

??"The Federal Electric Regulatory Commission ... made a determination in
November and again Dec. 15 that the California market was dysfunctional,
prices
were too high and the terms they used unjust and unreasonable and we are
entitled as a matter of law to some form of price relief," Davis said.

??The governor, who has been mentioned as a potential Democratic presidential
contender in 2004, said he was ordering state officials to bring legal action
against the regulatory panel to secure some kind of price relief either in the
form of rebates or controls on the price California is charged for the natural
gas it buys from suppliers in other states.

??Davis said suppliers were selling natural gas to New York for $5.95 per
million Btu while charging California $15 for the same amount of gas. The
governor repeatedly has charged that big energy suppliers--many on them based
in
Houston and other parts of Texas--were involved in price manipulation and
gouging. Bush said Tuesday that he would order federal agencies to thoroughly
investigate any charges of gouging

??Bush's speech was briefly interrupted three times as protesters demanded a
reduction in energy prices. "Stop the gouging of our economy," one protester
shouted. Another stood on a chair shouting as she held up a banner reading,
"Rate Caps Now."

??Earlier, in a speech at Camp Pendleton U.S. Marine Base near San Diego, Bush
announced he would seek $150 million more in aid to help low-income people
struggling with rising energy bills. He already has asked Congress for $300
million for such assistance.

??Though Bush's speech was billed as an energy conservation address, he spent
much of his time praising the military for its service and emphasizing the
administration's support of the military, including plans to raise pay and to
improve health benefits and housing.

??Bush was more than halfway through his 10-minute speech when he brought up
the subject of energy conservation. He began by praising Camp Pendleton and
federal agencies for heeding his May 3 order to take extra steps to conserve
energy during peak hours. Bush said the Department of Defense committed itself
to reducing its energy consumption by 10 percent during peak hours.

??"I'm pleased to report that the military and federal agencies are exceeding
expectations," he said.

??Bush said the conservation efforts have saved 76 megawatts per hour during
peak periods, enough for the needs of 140,000 people during peak demand
periods.
"That's as many people as live in Pasadena, Calif.," Bush said.

??Bush noted that a new car uses half as much gasoline as a 1972 car and a new
refrigerator uses 30 percent of the electricity needed for a 1972 model. "Yet
this conservation progress stalled in the 1990s," Bush said.

??Vague on energy tactics

??The president also said his administration's energy plan includes 100
recommendations, 40 of them aimed at revitalizing conservation efforts. He did
not specify any of his administration's conservation recommendations.

??The president said Energy Secretary Spencer Abraham is working to secure the
permits and easements necessary to clear a clogged section of the transmission
grid between Southern and Northern California.

??California's energy crisis has been caused by several factors, most related
to the flawed way in which the state deregulated the electricity industry in
the
mid-1990s. An element of that deregulation plan prohibited the state's major
power corporations from passing on increases in their costs to consumers. When
the price of natural gas skyrocketed earlier this year, companies were force
to
borrow huge sums to buy the power they needed to supply customers.

??Pacific Gas and Electric, the state's largest utility, was forced to seek
federal bankruptcy protection. The state's second-largest supplier, Southern
California Edison, teeters on the verge of insolvency.

??California has spent billions of dollars from the state's budget surplus to
buy needed energy. Davis said Tuesday that the state spent about $7 billion on
energy supplies in 1999, then $27 billion in 2000 and now expects to spend
more
than $50 billion in 2001 despite a drop in consumption of around 10 percent.

GRAPHIC: PHOTOS 2PHOTO (color): President Bush and Gov. Gray Davis discuss the
energy crisis. Reuters photo by Larry Downing.; PHOTO: President Bush is
surrounded by Marines at California's Camp Pendleton on Tuesday. His talk was
billed as an energy conservation speech, but he spent much of his time
praising
the military. Reuters photo by Larry Downing.

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????????????????????????????????U.S. Newswire

????????????????????????????May 29, 2001, Tuesday

SECTION: STATE DESK

LENGTH: 1008 words

HEADLINE: Libertarians: While Bush and Davis Chat, California Burns -- Through
$180,000

DATELINE: LOS ANGELES, May 29

BODY:
?While Gov. Gray Davis and President George W. Bush chatted for 40 minutes
?today over how to solve the energy crisis, the state spent another $180,000
?on electricity -- with no end in sight to the mad spending, the Libertarian
?Party of California announced today.
????"While Davis and Bush go through the motions of an orchestrated
?meeting, state taxpayers are being drained of billions of dollars with no
?end in sight," charged Libertarian state chairman Aaron Starr. "Neither one
?seems willing to make the tough, painful, but necessary decisions that need
?to be made to end this crisis."
????California has been spending an average of $45 million per week since
?early February to buy power on behalf of the state's cash-strapped
?utilities. ?That is equal to roughly $6.4 million per day, $268,000 per
?hour -- or $180,000 for the 40-minute meeting between the two leaders. ?To
?date the state has spent $7.8 billion in electricity.
????"After nearly $8 billion, California is nowhere closer to avoiding
?electricity shortages and blackouts this summer, despite Davis's rhetoric,"
?Starr noted.
????Libertarians have been highly critical of Davis's actions since
?January, including:
????-- Making California a purchaser of power
????-- Demanding price controls on wholesale electricity
????-- Attempting a bailout of Southern California Edison by purchasing
?it's transmission lines
????-- Threatening to seize power plants
????-- Putting Democratic consultants on the state payroll to the tune of
?$30,000 per month
????-- Blaming "price gouging" and "market manipulation" for California's
?problems
????"The only gouging going on is of the taxpayer, and the only
?manipulation is on Davis's part in trying to shift the blame for this
?crisis," said Starr.
????Not that Bush is entirely blameless. ?"Libertarians are pleased that
?he has resisted price controls so far, but there was no need for him to put
?forward an ineffective 'national energy plan.' We would rather see him
?propose repealing the Federal Power Act of 1935 and abolishing the Federal
?Energy Regulatory Commission for starters," Starr suggested.
????"Like modern-day Nero's, Davis and Bush fiddled today while more
?taxpayer dollars burned. ?Sadly, neither has demonstrated true leadership
?by explaining the crisis to the public honestly and lifting the existing
?electricity price controls, which are the root cause of the problem." Starr
?concluded.
????"Californians should expect more fiddling, more burning -- and more
?blackouts."
????KEYWORDS:
????CALIFORNIA, ENERGY POLICY, POLITICAL

CONTACT:Juan Ros of the Libertarian Party of California, ????818-782-8400;
e-mail: director(At)ca.lp.org ????Web site: http://www.ca.lp.org

LOAD-DATE: May 29, 2001