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Having it both ways requires some semantic gymnastics. FERC draws a distinction between "price caps," which impose a maximum allowable price, and the more flexible "price mitigation," which sets prices based on a formula that factors in producers' costs.
Fair enough. But the White House is taking pains to get its story straight. At a meeting in economic adviser Larry Lindsey's office, aides were told to use the poll-approved "price caps" in place of the harsher "price controls." Republicans on Capitol Hill are thumbing through their thesauruses for other ways to describe the abrupt change of course. To some, the idea of telling their allies in the energy industry to give back their "unearned enrichment" seems more palatable than slapping them for "price gouging." And for those who find "caps" too strong to take, there's always "market mitigation."
But how they spell relief won't matter if FERC's action doesn't work. "It's better than nothing but not nearly as attractive as it sounds," says Davis, who will tell Lieberman's committee the same thing this week. "The way around it is quite obvious. Generators simply sell the product to a middle person--which they do anyway--and that marketer has no obligations under the order." Also, the order will not get back the $7 billion California estimates it has been overcharged by electricity suppliers since last May.
Even if FERC's order proves effective, Republicans will have salvage work to do. Polls show Californians disapprove of how Bush has handled their biggest problem; some even think he's out to get them. Bush and Davis talked past each other during a meeting in Los Angeles last month, when Bush was on his first presidential trip to the state. But real negotiations were under way elsewhere. Sources tell TIME that political adviser Karl Rove met privately with outgoing Republican mayor Richard Riordan to press him to enter next year's race for Governor against Davis. Rove and top Republicans have kept the pressure on, letting Riordan know that Bush moneymen are waiting with checks if he gets in, and sharing G.O.P. polls with him that show Davis may have been fatally wounded by his handling of the crisis. While the Governor claims he inherited the state's deregulation mess, even Democrats accuse him of ignoring it until it was too late. A strong challenge by Riordan could not only unseat the Democratic Governor but also create coattails big enough to keep Republican House members in office.
Californians will be getting a preview of that war this week as a group called the American Taxpayers Alliance begins airing TV ads featuring fuzzy closeups of a robotic-looking Davis, claiming he is to blame for the state's energy problems. Although the A.T.A. styles itself an "issue advocacy group," funding for the ads comes from, among hundreds of other corporations, a major power generator called Reliant Energy, one of the companies California officials accuse of price gouging. (James Baker, who headed the Bush recount effort in Florida, is a director, and chairman Steve Letbetter was a top Bush fund raiser.) Republican sources tell TIME that Scott Reed, the longtime G.O.P. activist who heads A.T.A., hopes to raise $25 million to keep the ads running. Bush outside adviser Ed Gillespie, an Enron lobbyist, is raising a separate $500,000 war chest for ads attacking price caps.