Despite the Shock, Davis Kept the Lights On

Re “Let Consumers Shop for Cheaper Energy,” Commentary, Dec. 20: Fixated as he is on nit-picking Gov. Gray Davis’ solutions to the energy crisis, Tom McClintock misses the most vital fact: The governor’s quick and aggressive actions kept the lights on. He protected ratepayers from the brunt of the outrageous price manipulations of the out-of-state generators. He secured a reliable energy supply for the state’s long-term future and goaded the Federal Energy Regulatory Commission into waking to its legal role as a regulator.

McClintock says Davis didn’t lift a finger to deal with skyrocketing natural gas prices, forgetting, apparently, that gas prices dropped only after President Bush agreed to the governor’s call for an investigation last spring.

He forgets that it was not Davis who froze customer rates. That freeze was part of the original deregulation law. The utilities wholeheartedly supported the freeze because the rate allowed them to make substantial profits for several years. In opposing large retail rate increases, Davis stated firmly that residential customers hadn’t asked for deregulation, hadn’t wanted it and shouldn’t be victims of its failure.

McClintock claims that left alone, energy prices would have settled down. Yet he fails to note that energy prices shot up most dramatically in December 2000, when FERC freed them from price controls, and they did not settle down until the Davis administration had negotiated enough long-term contracts to end dependence on the spot market. Finally, McClintock cites NewPower Holdings as an exemplar of electricity market competition in Texas. However, Newsweek maintains that NPH, an Enron spinoff, was one of the “deals that sank Enron.” This underscores the precarious nature of the electricity market--which Enron customers in California know all too well.

David Freeman

Chairman, Consumer Power

and Conservation Financing

Authority, Sacramento