Bush suggests low-income energy help before meeting with Davis

President Bush tells a Camp Pendleton, California, audience that soldiers and their families deserve "special credit" for their energy conservation efforts.

WASHINGTON (CNN) -- President Bush announced Tuesday that the federal government will ask Congress for $150 million to help low-income earners pay for higher energy bills this summer.

"For some Americans and some Californians, high energy costs are more than a challenge, they are an emergency," Bush said. "Our government must respond."

Bush made the announcement in a speech at the Marine Corps' Camp Pendleton in California. The new money would be allocated in addition to $300 million already budgeted for part of the Low Income Home Energy Assistance Program.

The president spoke at the Marine base to stress his recent order that the military and other federal agencies in California reduce peak-hour power usage by 10 percent.

VIDEO CNN's Rusty Dornin examines all the finger-pointing in the California power struggle (May 29) Play video (QuickTime, Real or Windows Media)    IN-DEPTH SPECIAL U.S. energy crunch    RESOURCES • Read the Bush energy plan • Details of the plan • Transcript: Bush's energy speech • Major Garrett: Bush's plan    MESSAGE BOARD Discuss the energy crunch    ALSO California pawn business booms as energy bills rise

Camp Pendleton, he said, deserves "special credit."

"I congratulate you for seeking extra conservation savings over the 10 percent. And that's going above and beyond the call of duty," Bush said. "And I salute you."

Bush said the federal conservation efforts will save the state 76 megawatts per hour during peak-use periods. That's enough electricity, he said, for 140,000 people during peak-demand periods.

In California for a three-day trip, the president is scheduled to meet later Tuesday with Gov. Gray Davis, a Democrat, to discuss the state's energy problems.

Los Angeles will be the setting for that highly charged meeting.

Davis is expected to warn Bush that rising electricity costs and the state's continued power shortage will threaten the U.S. economy.

Davis likely will repeat his request that the White House impose short-term price controls on wholesale electricity rates, something Bush has refused to do in the past.

"California drove the economic boom of the last eight years, and it could drive it down just as easily," a Davis aide said. California's governor hopes to impress on Bush that as president, "he is the only person with the power to help the people of the state of California," the aide said.

Davis has called for six to seven months of price controls on electricity; enough to get through the summer heat and give operators time to get four power plants, now under construction, online.

Bush and Vice President Dick Cheney, both former oil executives, have argued that the free market, not price controls, should be trusted to lower energy prices. Both men have cited California's troubles to support their plans to boost long-term energy supplies, but critics -- including Davis -- say the administration blueprint ignores immediate problems.

Davis has railed against "price-gouging" by out-of-state electricity producers, particularly those based in Bush's home state of Texas. Californians paid $7 billion to out-of-state generators in 1999 and $27 billion last year. That cost is expected to hit $60 billion this year, Davis said earlier this month.

The troubles have hurt Davis' own political standing: A recent Public Policy Institute poll gives Davis a job approval rating of 46 percent in California, vs. a 57 percent approval rating nationwide for Bush.

The state's largest privately owned utilities have been hammered by skyrocketing wholesale electricity prices and the state's 1996 electric deregulation law. Wholesale electric prices are roughly 10 times higher than last year, but deregulation limited rate increases to consumers.

The result has cost California's largest utilities billions of dollars and resulted in periodic rolling blackouts since January. The largest utility, Pacific Gas and Electric, filed for bankruptcy protection in April.