In his annual address to the California legislature, Mr. Davis, a Democrat, also promised that he would not allow California's two largest private utilities to continue their recent slide toward bankruptcy, saying that he would use all the state's powers, including taking control of power plants and transmission grids if necessary, to keep the system working. Mr. Davis's proposals will now be debated by a state legislature that has already been considering even stronger measures to tame soaring wholesale electricity prices and power shortages in many parts of the state. The governor's plans represent a startling turnaround from the mood that existed four years ago when the deregulation plan passed the legislature unanimously on promises that market forces would bring power costs down a drastic miscalculation, as it turned out. Mr. Davis's proposals are bolder than many political experts had anticipated from a centrist governor who has made his mark as a cautious pragmatist more likely to believe in market forces than state control. But some members of the state's heavily Democratic legislature said they were inclined to move even further than the creation of a state power authority that could become a major electricity generator.
Drastic times call for bold measures.
Governor Davis suggested that, if necessary, he would consider far stronger measures. In his speech, the governor left unstated precisely what he would do in the short term to prop up the state's two largest utilities, Pacific Gas and Electric and Southern California Edison. Our fate is tied to their fate. The power utilities have been caught in a dangerous vise as they pay soaring prices for power on the wholesale market but can charge consumers far less than their costs because of state price caps. Governor Davis and other state officials are scheduled to meet at the White House Tuesday afternoon with top federal energy and economic officials in an effort to win federal help in creating a new cap on wholesale power prices.