[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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