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SFC: Energy chief moves to avert California blackouts

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  • Jonathan Clemens
    HREG, I know you have heard it, that California is currently facing rolling blackout possibilities. The article below articulates the west coast situation
    Message 1 of 1 , Dec 15, 2000

      I know you have heard it, that California is currently facing rolling
      blackout possibilities. The article below articulates the west coast
      situation quite well. It is interesting to note that the northwest is
      facing reduced hydropower, due to low water levels, which impacts
      California. DOE chief Bill Richardson is fixing to get involved.
      California imports electrical power big time and some of its utilities are
      facing bankruptcy. Remember that Texas differs from California, as Texas
      produces most if not all of its electricity.


      ----- Original Message -----
      From: "Carolyn Chase" <cdchase@...>
      Sent: Wednesday, December 13, 2000 4:45 PM
      Subject: SFC: Energy chief moves to avert California blackouts

      www.sfgate.com Return to regular view

      Energy chief moves to avert California blackouts
      STEVE LAWRENCE, Associated Press Writer
      Wednesday, December 13, 2000
      ©2000 Associated Press


      (12-13) 13:46 PST SACRAMENTO (AP) -- U.S. Energy Secretary Bill
      Richardson said Wednesday he
      would force power generators to sell electricity to California
      to prevent rolling blackouts.

      The announcement came as California power regulators warned of
      the likelihood of a Stage Three power
      alert with rotating blackouts Wednesday afternoon due to trouble
      buying electricity from the Northwest.

      About a dozen suppliers were demanding cash before selling power
      to California due to concerns about
      the utilities' solvency, said Kellan Fluckiger, chief operating
      officer of the Independent System Operator,
      keeper of the state's electrical grid.

      California's two largest utilities, Pacific Gas and Electric and
      Southern California Edison, are near
      bankruptcy due to skyrocketing wholesale power costs, Gov. Gray
      Davis and Sen. Dianne Feinstein,
      D-Calif., said at a Washington, D.C., news conference with Richardson.

      Richardson said he was using emergency powers to force
      wholesalers to sell power to California at a
      price he deemed fair. He said he would also request that two
      large Pacific Northwest power generating
      associations generate more power to send to California.

      Davis and Feinstein also asked federal regulators to set a
      regional price cap on wholesale electricity to
      prevent the high prices that have plagued California. On Friday,
      the Federal Energy Regulatory
      Commission lifted price caps in California.

      Record wholesale power prices followed, and PG&E warned it was
      in financial danger.

      ``The credit limits of utilities and what markets are willing to
      sell us have been reached and surpassed in
      many cases,'' Fluckiger said. ``There are questions about
      utility solvency. That has come to a head

      He said officials may have to interrupt power to about a million
      customers Wednesday afternoon and then
      increase the blackouts to cover three million or four million in
      late afternoon and early evening, when
      people come home from work and power demand hits a peak.

      Steve Hansen, a spokesman for Southern California Edison, whose
      territory includes metropolitan Los
      Angeles but not the city, said the utility had not ordered
      blackouts by early afternoon.

      ``We have heard that it may not be as bad as we thought here,''
      he said. ``We're waiting for some kind of
      official word from the ISO or somebody.''

      An unprecedented Stage Three emergency was issued last Thursday,
      meaning reserves had fallen below
      1 1/2 percent. In that case, the state fended off the threat of
      rolling outages by turning off two
      power-sucking water pumps on the Delta.

      ``California is heavily import-dependent and had been for 20
      years. This is a West-wide problem,''
      Fluckiger said.

      Blackouts, if used, would probably last about an hour to 90
      minutes and occur mostly in Northern
      California due to transmission limitations there, Fluckiger said.

      ``It's a fairly bleak picture,'' he said, adding that the
      chances of blackouts were better than 50-50. ``This
      thing will not change unless something is done to alleviate the
      credit situation.''

      Contributing to the problem was a shortage of water to power
      hydroelectric generators in the Northwest
      and California, Fluckiger said.

      ``We have reservoirs so low that we have people standing by them
      watching the situation to make sure it
      does not go below safe limits,'' he said.

      Gas-fired generators could be brought on line to ease the
      situation but natural gas prices are so high they
      would not cover the operating costs, Fluckiger said.

      ``Requests have been made to operate those facilities and then
      have the utilities pay for those excess gas
      costs,'' Fluckiger said. ``The utilities have not been able to
      do so. They have requested permission from
      the PUC to be able to pass those costs through to customers.''

      Utilities would decide who would face blackouts, he said. They
      try to avoid areas with essential services
      such as hospitals, Fluckiger said.

      California's power market has been hit for months by tight
      supplies and price spikes. Electricity
      deregulation, cold weather and rising power costs have been
      blamed for the state's most recent

      California approved a phased-in deregulation of the electricity
      market in 1996 to try to lower prices for
      consumers through competition, but so far it has led to higher
      energy prices.

      The Northwest, heavily dependent on hydroelectric power, has
      faced low water tables and had to import
      electricity from California and other states.

      And wholesale power costs have been soaring, due in large part
      to skyrocketing prices for natural gas.
      Wall Street is worried about utilities' economic health, and on
      Tuesday, a consumer group urged the state
      to seize and run the strapped $20 billion electricity system.

      A Stage One alert was declared Wednesday morning, meaning power
      reserves were below 7 percent
      and all power users are asked to conserve.

      Stage One and Stage Two emergencies, in which power reserves
      fall below 5 percent, have become
      routine this month, but last Thursday's Stage Three was the only
      time the threat of blackouts loomed.


      ^EDITOR'S NOTE: Associated Press writer Bart Jansen in
      Washington contributed to this report.

      ©2000 Associated Press

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