Gray Unplugged

Although federal regulators and the Bush-Cheney administration have made their opposition to price caps plain — leading state Treasurer Phil Angelides, many Democrats and even the preternaturally cautious Los Angeles Timesto support either an outright takeover of a power plant or imposed state operation of one as a shot across the bow of the Southern cartel — Davis continues to look to Washington for the solution.

Indeed, though Davis says he’s not ruling it out, top advisers oppose state action. They claim that action by the governor could lead not only to a shutdown of existing plants, but somehow halt construction of 14 new ones. One energy expert, however, points out that the generators who are gouging the state are not the same companies who are building those 14 new plants.

Given the year-long failure of Davis’ recourse to Washington, what plan do the governor’s advisers have to stop the Big Gouge? None. They seem paralyzed by what might happen rather than motivated by what is happening.

Angelides says his financial advisers tell him that plants can be operated by the state at less than half the price generators have been charging and still provide a healthy return to the companies. But Davis advisers may be more focused on the symbolism of such a move in the midst of a re-election campaign in which they hope to raise $50 million from the business community. In addition, they complain that they would be left holding the bag if, after the governor finally exercised the emergency powers he brandished in his January State of the State address, the move backfired.

In fact, they complain that Davis has been left holding the bag on Burton’s proposed state takeover of utility transmission lines, which Davis resisted but finally acceded to when his idea of bailing out the utilities (by buying utility stock options) turned out to be unconstitutional.

In this, they ignore two points. One, of course, is that PG&E declared bankruptcy, taking a big chunk of the grid off the table, at least for now. (According to an investment-banking source, they did not believe that Davis could sell the deal and protect their interests.) Two, and perhaps more important, is that the grid buyout has become entangled with the extremely favorable deal his team negotiated with Edison.

With such a tangled web on what has become the most important issue in the state, Davis should probably be content that he’s still 7 points ahead. But who outside Sacramento knows who Bill Jones is? Come election time, maybe it will be good enough not to have been the incumbent who got us into this mess.