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A rising star dims amid blackouts

Unresolved energy crunch may strangle the political future of California's governor.

By Paul Van Slambrouck Staff writer of The Christian Science Monitor / April 9, 2001



SAN FRANCISCO

Another day, another $50 million.

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That's the daily taxpayer tab to keep the lights on in California, and just as that sum erodes the state treasury, it is also inflicting a slow-drip water torture on the political fortunes of Gov. Gray Davis.

The filing for bankruptcy protection late last week by Pacific Gas & Electric Co., the state's largest utility, is the newest evidence of sinking confidence in a governor who won office by 20 percentage points and just months ago was seen as a future Democratic presidential contender.

In addition, there is carping from within Governor Davis's own party, sagging popular support, and worst of all, a crisis whose near-term solution now looks more uncertain than ever.

If anything, the situation looks as if it will get worse before it gets better.

PG&E chairman Gordon Smith told the investment community in the wake of last Friday's bankruptcy filing that further electricity outages in California are now "virtually inevitable."

The bankruptcy filing, though dramatic and one of the nation's largest, caught no one completely by surprise. Yet its timing seemed to inflict maximum political damage on Davis, who termed it a "slap in the face to California."

The governor had taken the rare step of going on statewide television to boost public support for his energy plan only to be upstaged by the bankruptcy filing.

"He looks like the proverbial deer caught in the headlights," says University of Southern California political scientist Sherry Bebitch Jeffe, referring to the governor. "There is an undercurrent of worry in the state Democratic Party, and this is clearly taking a toll on Davis."

More blackouts likely

That worry is underscored by broader signs that the nation's largest state could suffer regular electricity outages this summer, damaging an already-slowing economy, tarnishing the state's reputation as a place to do business, and hurting the Golden State's overall quality of life.

One recent transplant to California from New York says this past winter was the coldest she has ever experienced. "In New York it's colder outside, but at least it's warm inside," she notes, having lowered the thermostat in her Berkeley, Calif., home to save electricity.

In an effort to right the ship and his own political fortunes, Davis took his case directly to the people Thursday evening via a rare television address, something no governor had done since the depths of the state's recession in 1992. It was fundamentally an energy pep talk, but the governor acknowledged his troubles by capitulating on a key point.

Davis reversed gear and embraced the need for higher electricity rates, a politically risky move that analysts say was apparently taken only because it paled compared with the even riskier political prospect of prolonged blackouts.

The state Public Utilities Commission approved a 27 percent hike in rates last month, a figure Davis essentially endorsed in his address to the state. But because that price hike was not authorized for payment of the utilities' mounting debts, it did not end their financial bind.

Ironically, Davis's embrace of higher rates may have been too little too late, damaging him politically, yet not in time to ward off blackouts or prevent the bankruptcy move by PG&E. Some consumer groups are promising a ballot initiative to thwart what they see as a massive bailout of the state's utilities, an eventuality that Davis has resisted for fear it would end up in court and freeze any new energy investment in the state for years.