Bush to California: Forget About Energy Price Caps

LOS ANGELES-In his first visit to California since being elected President last fall, George W. Bush on Tuesday told an angry Governor Gray Davis that the US government will not institute price limits on the amount that energy providers can charge for their electricity. Separately, an appeals court in San Francisco rejected a Davis-backed effort to force federal regulators to intervene.

Davis has been clamoring for such price caps for more than a month, when his own plan to rescue the state’s big utilities began crumbling under pressure from energy producers and partisan political bickering. Electricity bills paid by millions of commercial and residential property owners across California have soared by more than 50% since the start of this year, but utilities say they’re still losing money because they’re paying energy providers several times more than the amount that the utilities themselves can charge consumers.

Bush has said that federally set price caps would make the energy crisis even worse by discouraging companies from investing the hundreds of millions of dollars it takes to build even the smallest of power plants. He reiterated that belief during several public appearances yesterday, as well as in his first face-to-face meeting with Davis–a Democrat who frequently bashed Bush over the course of last year’s presidential campaign and may even run against him in the 2004 elections.