page_title: Gray Davis
section_title: California electricity crisis
hierarchical_section_title: Gray Davis / First term / California electricity crisis
caption_attribution_description: Governor Gray Davis giving a speech on energy.
context_page_description: Joseph Graham "Gray" Davis Jr. is a retired American attorney and Democratic Party politician who served as the 37th Governor of California from 1999 to 2003. In 2003, only a few months into his second term, Davis was recalled and removed from office, the second state governor successfully recalled in U.S. history. Prior to serving as governor, Davis was chief of staff to Governor Jerry Brown, a California State Assemblyman, California State Controller and the 44th Lieutenant Governor of California. Davis holds a B.A. in history from Stanford University and a J.D. from Columbia Law School. He was awarded a Bronze Star for his service as a Captain in the Vietnam War.
  During his time as governor, Davis made education his top priority and California spent eight billion dollars more than was required under Proposition 98 during his first term. Under Davis, California standardized test scores increased for five straight years. Davis signed the nation's first state law requiring automakers to limit auto emissions. Davis supported laws to ban assault weapons and is also credited with improving relations between California and Mexico.
context_section_description: Soon after taking office, Davis was able to fast-track the first power plant construction in twelve years in April 1999, although the plant did not come on line before the electricity crisis.
  According to the subsequent Federal Energy Regulatory Commission's investigation and report, numerous energy trading companies, many based in Texas, such as Enron Corporation, illegally restricted their supply to the point where the spikes in power usage would cause blackouts. Rolling blackouts affecting 97,000 customers hit the San Francisco Bay area on June 14, 2000 and San Diego Gas & Electric Company filed a complaint alleging market manipulation by some energy producers in August 2000. On December 7, 2000, suffering from low supply and idled power plants, the California Independent System Operator (CAISO), which manages the California power grid, declared the first statewide Stage 3 power alert, meaning power reserves were below 3 percent. Rolling blackouts were avoided when the state halted two large state and federal water pumps to conserve electricity.
  On January 17, 2001, Davis declared a state of emergency in response to the electricity crisis. Speculators, led by Enron Corporation, were collectively making large profits while the state teetered on the edge for weeks and finally suffered rolling blackouts on January 17 and 18. Davis stepped in to buy power at highly unfavorable terms on the open market, since the California power companies were technically bankrupt and had no buying power. California agreed to pay $43 billion for power over the next 20 years. Newspaper publishers sued Davis to force him to make public the details of the energy deal.
  During the electricity crisis, the Davis administration implemented a power conservation program that included television ads and financial incentives to reduce energy consumption. These efforts, the fear of rolling blackouts and the increased cost of electricity resulted in a 14.1% reduction in electricity usage from June 2000 to June 2001.
  Gray Davis critics often charge that he did not respond properly to the crisis, while his defenders attribute the crisis solely to the corporate accounting scandals and say that Davis did all he could. Some critics on the left, such as Arianna Huffington, alleged that Davis was lulled to inaction by campaign contributions from energy producers. Some of Davis' energy advisers were formerly employed by the same energy speculators who made millions from the crisis. In addition, the Democratic-controlled legislature would sometimes push Davis to act decisively by taking over power plants which were known to have been gamed and place them back under control of the utilities. Some conservatives argued that Davis signed overpriced energy contracts, employed incompetent negotiators and refused to allow electricity prices to rise for residences statewide much as they had in San Diego, which they argue could have given Davis more leverage against the energy traders and encouraged more conservation. The electricity crisis is considered one of the major factors that led to Davis' recall.
  In a speech at UCLA on August 19, 2003, Davis apologized for being slow to act during the energy crisis, but then forcefully attacked the Houston-based energy suppliers: "I inherited the energy deregulation scheme which put us all at the mercy of the big energy producers. We got no help from the Federal government. In fact, when I was fighting Enron and the other energy companies, these same companies were sitting down with Vice President Cheney to draft a national energy strategy."
  When the Enron verdicts were rendered years later, convicting Enron and other companies of market manipulation, Davis responded with the following quote:
  Ken Lay and Jeffrey Skilling, more than anyone, are the reason I'm talking to you now from this law firm.
   (Skilling's conviction was later overturned by the United States Supreme Court in its narrowing of the "honest services" statute.)
  On November 13, 2003, shortly before leaving office, Davis officially brought the energy crisis to an e
caption: Davis giving a speech on energy
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