[Congressional Record Volume 147, Number 82 (Wednesday, June 13, 2001)]
[House]
[Pages H3121-H3122]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CALIFORNIA'S ENERGY CRISIS
(Ms. ESHOO asked and was given permission to address the House for 1
minute and to revise and extend her remarks and include therein
extraneous material.)
Ms. ESHOO. Mr. Speaker, yesterday afternoon, the California
delegation, 52 strong, including our two United States Senators,
Republicans and Democrats, met with the Vice President. The subject of
the meeting was energy.
Californians are reeling from the sticker shock in the bills that
they are receiving. We know that the Federal Energy Commission has said
that there is gouging. We know that there is gaming. Californians are
hurt and hurting badly by this.
I will place into the Record as part of what I am saying this morning
a report that has come out from CNN. It is entitled ``Power of
advertising fights electricity rate caps''.
Well, together with the White House and the GOP majority in the
House, those gouged prices from Californians are now going to be put
into an advertising campaign. The dollars that we are paying are going
to be placed into an advertising campaign to try to defeat price relief
in California.
This is an outrage, and it is an equivalent to what the tobacco
companies did as they tried to wage their war on America and say that
tobacco was good. This is an outrage, and we are going to fight this.
Mr. Speaker, I include the article that I referred to earlier as
follows:
Power of Advertising Fights Electricity Rate Caps
Worried GOP, White House give blessing to utilities' California
campaign
(By Major Garrett)
Washington (CNN).--Major U.S. utility companies--at the
behest of senior congressional Republicans and with White
House approval--will launch a multimillion-dollar advertising
campaign this week to fight federal caps on electricity
prices in California, several sources tell CNN.
No exact dollar figure has been set for the television
campaign, but congressional and administration sources said
the first phase will cost less than $5 million and run only
in California. Media buyers for the utilities will also
purchase airtime on Spanish-language television.
``Every penny right now will be spent in the Golden
State,'' said a source intimately involved in the ad
campaign.
Over time, the utilities' ad campaign could easily cost
more than $10 million. Leading congressional Republicans have
urged the entire energy industry to spend upwards of $50
million on the ads--or about as much as the tobacco industry
spent to defeat comprehensive tobacco legislation in 1998.
Congressional GOP leaders have issued dire, albeit private,
warnings to the energy industry that they may not be able to
block legislation imposing caps on prices or other measures
designed to give the federal government a greater role in
setting rates for wholesale electricity, oil or natural gas.
The ad campaign reflects a deepening sense of dread among
congressional Republicans that the Bush energy policy, while
long on specifics, has failed to address short-term political
pressure on Republicans.
Republicans inside and outside of Congress tell CNN they
are terrified about confronting a summer of Democratic
attacks on energy prices as they gear up for re-election
campaigns. The concerns are all the more acute because of the
GOP's narrow, five-seat House majority and fear among Senate
Republicans that they could lose more ground to the Democrats
in next year's elections.
The final straw for many House and Senate Republicans was
Mr. Bush's trip to California, which, in effect, put the
issue of price caps in the spotlight.
``It was a total disaster,'' said an adviser to the House
Republican leadership. ``He came out there to let every
Californian, including Republicans, know he was against price
caps. Now everyone in California knows (Democratic Gov.) Gray
Davis is for them and the president is not.''
What's worse, several senior Congressional Republican
sources told CNN, the White House returned from the trip
thinking the president had the upper hand.
``It's ludicrous,'' said another House Republican.
``Members have lost confidence in their ability to understand
how this issue is affecting us.''
Congressional Republicans will not play any role in the
content or overall strategy of the campaign. Neither is the
White House involved. But House and Senate GOP leaders have
shared their concerns with top White House officials, among
them Mr. Bush's senior political adviser, Karl Rove.
``The White House is aware and approving of the effort,''
said a senior Senate Republican aide.
House Republican leaders, beset by complaints from rank-
and-file Republicans about the beating they're taking on the
energy price issue, have been demanding action from energy
companies to make the public case against price caps or other
controls on energy markets. Chief among the advocates has
been House Majority Leader Tom DeLay of Texas.
DeLay and his wife, Christine, dined with President bush
and the first lady on Wednesday. Sources close to the
situation said the evening was mostly social, but they added
that DeLay expressed concerns about the withering attacks the
House GOP has been absorbing from Democrats on the energy
issue.
[[Page H3122]]
From news conferences to special orders on the House floor,
Democrats have blasted Republicans as allies of big energy
conglomerates and as unwilling to question high energy
prices.
The White House, sources inside and outside the
administration tell CNN, has gotten the message. Senior
advisers convened an emergency ``California energy message''
meeting Thursday to discuss future strategy. The meeting
involved Rove, White House counselor Karen Hughes and senior
advisers from the president's economic team and the Energy
Department.
The political danger for Republicans has become so
pronounced that House GOP leaders pulled an energy bill
sponsored by Republicans Rep. Joe Barton, R-Texas, because
they could not be sure they could kill a Democratic attempt
to add energy price caps in California to the legislation.
Similarly, senior Senate Republicans aides said a push for
electricity price caps in California could prove unstoppable
if the issue comes to the floor. With Senate Democrats eager
to push other matters first--such as HMO reform--the price
cap issue will probably not make it to the Senate floor until
congress returns from its Fourth of July recess.
At a recent gathering of Senate Republicans, one top
senator said there ``wasn't five votes'' among Republicans to
block price caps on electricity in California.
Last week, House Majority Leader Dick Armey, R-Texas, and
Conference Chairman J.C. Watts, R-Oklahoma, sparred publicly
over whether to hold hearings into energy prices. Armey said
the exercise was ``nonsense.'' Watts said he wanted energy
companies to at least explain price fluctuations so the
public would see that Republicans were at least willing to
hold them accountable to consumers.
``We're not fighting fire with fire,'' said one exasperated
senior House Republican aide. ``This is a war and if the
energy companies don't step up to the plate, we can't stop
bad things from happening anymore. They have to be willing to
fight and fight on the air.''
Before the emergency White House meeting California, top
White House communications aides sent a memo to all
congressional Republicans last week advising that they should
no longer use the phrase ``price caps'' but ``price
controls.''
The theory behind the semantics, Republicans say, is that
price caps sound consumer-friendly and nonthreatening, while
price controls sound bureaucratic and meddlesome. The White
House has long argued that price caps in California--or
anywhere else--would distort markets.
This distortion, the White House has argued, would
artificially lower prices, encourage consumption and diminish
the supply of energy that can be profitably brought to
market.
Republican sources said several utilities will participate
in the advertising and that the thrust of the pitch would be
that government interference in energy markets would, in the
case of California, bring more blackouts.
The campaign may, in later stages, remind viewers of the
gas lines in the 1970s, which many energy economists say were
brought on by price controls that drastically reduced the
supply of gasoline and by consumers hoarding gasoline,
frightened of never having enough.
``We've been carrying their water for a long time,'' one
Republican said of the energy industry. ``And now they're
going to have to provide some air cover.''
The one irony is that energy economists have of late
forecast that gasoline prices--which were feared to be headed
well above $2 per gallon--will likely drop later this summer
and that the energy crisis in California may not be as acute
as anticipated.
The main reason, these economists say, is that high prices
for gasoline and electricity sparked widespread conservation
that has boosted supplies of gasoline and taken pressure off
California's electricity needs.
But that doesn't mean the political equation has changed.
``Members are scared to death,'' said another senior House
Republican aide. ``They are going to be redistricted this
year and they will have to sell themselves to some new voters
next year. They need to be able to tell them what they did
about energy.''
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