On Blackouts, Gavin Newsom Should Beware the Legacy of Gray Davis – Pacific Research Institute

On Blackouts, Gavin Newsom Should Beware the Legacy of Gray Davis


Californians are rightfully outraged over what my colleague Kerry Jackson has termed, “The Great Blackouts of 2019.”

Naturally, whenever there is a crisis or a scandal in state government like the blackouts and the PG&E bailout and bankruptcy, voters look to blame someone for the problem, typically the Governor.

Indeed, a recent Public Policy Institute of California poll shows gives Newsom a mixed grade for his handling of the ongoing PG&E bankruptcy.  Just 28 percent approved of his handling of the PG&E bankruptcy while 35 percent disapproved.  This is hardly a ringing endorsement.

On Friday, an impatient Newsom took further steps to “own” the power crisis.  He announced the appointment of a state “Energy Czar” to lead his administration’s efforts on power.  And in a Medium post, he wrote that he was, “convening current executives and shareholders of PG&E, wildfire victims, and PG&E’s other creditors in Sacramento (this) week in an effort to accelerate a consensual resolution to the bankruptcy cases . . .”

Newsom also threatened that, “if the parties fail to reach an agreement quickly to begin this process of transformation, the state will not hesitate to step in and restructure the utility.”

Many have observed that he could be going down the path of another governor who faced big electricity problems of his own – Gray Davis.

Like Newsom, Gray Davis was perhaps ideal for times of prosperity.  Each staked out politically-popular positions on a host of bread-and-butter issues.  And each also had the luxury of multi-billion dollar budget surpluses at the start of their administrations to pass out taxpayer-funded goodies and collect political chits.

But when California first saw signs of the energy crisis in the summer of 2000, Davis showed how ill equipped he was to handle a crisis.  When he could have acted when it was a more manageable problem, Davis focused instead on campaign fundraising and the November 2000 election.

By January 2001, the lights were going out statewide and voters were outraged with Davis’ inaction.  He finally declared a state of emergency.  Publicly, he played hot potato and tried to pass the blame to George W. Bush or really anyone else to escape the political heat.

Making matters worse, Davis pushed for a multi-billion state bond to finance the long-term state purchase of power.  Behind closed doors, Davis was entering into expensive, multi-billion long-term contracts with power companies, locking the state into buying power at peak demand prices.

I played a minor role in this saga during the spring of 2001 when I was a young staffer working in the State Assembly.  One of the projects that I worked on was trying to get the details of these secret power contracts released.  I had to quickly learn how to file Public Records Act requests, and which state agencies were the appropriate ones to file the requests with.

The Davis Administration fought tooth and nail to prevent the release of the power contracts.  Ultimately, media organizations and lawmakers took Davis to court to force him to release the contracts.  At one point, Davis even asked the judge to keep the contracts secret until after his re-election campaign in 2003!

Fortunately, government transparency carried the day and the power contracts were released.  Only then did we learn that the Davis Administration had committed to state to spend over $43 billion over 10 years in the inflated power contracts.

In 2003, California voters judged that Gray Davis’s leadership wasn’t what they wanted in a time of crisis, voting to recall him and elect Arnold Schwarzenegger instead.

It remains to be seen whether Newsom is up to the task of meeting the expectations of voters during this current crisis, but his Friday actions clearly are an attempt to show that he is leading and responding to the public outrage.  He is already channeling his inner Davis playing political hot potato, seeking to blame the Trump Administration, PG&E, and climate change (of course!) for the problem.

Whether Newsom succeeds in keeping the lights on and not ripping off ratepayers will ultimately determine whether his Friday announcement amounts to his trying on a power albatross or charting a smart course to avoid meeting the same fate as Davis.

Tim Anaya is the Pacific Research Institute’s communications director.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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