Editorial: Temporary price cap on electricity needed

Thursday, May 31, 2001 | 8:41 a.m.

There was much political buzz regarding Tuesday's meeting in California between President Bush and Gov. Gray Davis, who has been mentioned as a possible Democratic opponent of the Republican president in 2004. What stoked even more anticipation for the gathering was the current energy crisis in California, which has created back-and-forth bickering as to what should be done in response. What sometimes gets lost in the political coverage of such stories, however, is the underlying issue that caused the tussle in the first place. In this case, what shouldn't be ignored is that out-of-control prices for electricity and natural gas have pummeled consumers and businesses in California, which has the world's sixth-largest economy.

Davis has pleaded with the Federal Energy Regulatory Commission and the Bush White House to impose temporary price caps on the wholesale costs of electricity. This would stop Californians from being gouged until more power plants are built to meet the increasing demand. Unfortunately, Bush reiterated Tuesday that he doesn't believe the government should intervene, arguing that lower prices might actually spark more demand, which in turn could create more blackouts. But this is nonsense. Electricity rates already are so high that demand won't be altered appreciably by a temporary cap. It's not just California that's hurting, either. The West, including Nevada, has been hammered by higher energy prices and would benefit from a limited cap. It's a shame that Bush won't reconsider his opposition to such a reasonable measure.