Published Friday, June 16, 2000, in the San Jose Mercury News

Power gap hits home Blackouts a sign of state's need for new electricity plants, experts say BY PAUL ROGERS AND STEVE JOHNSON Mercury News

The type of rolling blackouts that shut off electricity to 97,000 PG&E customers across the Bay Area on Wednesday starkly illustrated for the public something that California energy experts have known for a while: The state's power system isn't keeping up with population growth or its energy needs.

Although 26 new or expanded power plants are on the drawing board statewide, the first ones won't be up and running until at least next summer, state officials said Thursday. That could mean a long, hot summer this year with potentially more shortages ahead on the warmest days.

What happened?

Just as with its highways, water system and University of California campuses, the state's era of building massive power plants reached a heyday in the 1950s and the 1960s. Since then, Californians have been able to coast for decades by relying on the power plants built when Pat Brown was governor and Dwight Eisenhower was president, experts said Thursday. Until now.

Today, California's population, fueled by high immigration rates and a robust economy, has reached 34 million, double the population of 1965. The state continues to add a net 600,000 people a year -- the equivalent of another San Jose every 18 months.

Most residents now have computers, televisions and other energy-gobbling appliances. And worse for energy demands, the fastest growing regions of the Golden State are in the hot Central Valley, not the coasts, further pushing up energy demand because of air conditioning.

``As the economy and population have grown, the important role that electricity plays has grown astronomically,'' said Jim Macias, a former PG&E vice president now with Calpine Corp. in San Jose. ``Our economy is tied to computers that run 24 hours a day. It's a double whammy.''

Meanwhile, few major power plants have been built in recent years to keep up with the demand.

``We have an energy shortage because we have so many more people in California, and nobody invested in power plants,'' said Peter Hess, deputy director of the Bay Area Air Quality Management District.

The reasons are many, experts say:

Environmental laws. Power plants are among the largest sources of smog, along with cars and oil refineries. After Congress passed laws such as the Clean Air Act in 1970 and the Endangered Species Act in 1973, the nation's environmental health improved, but it became tougher and more expensive for utilities to build power plants.

Reliance on power imported from other states. In years past, California bought excess power from Nevada, Arizona and the Pacific Northwest during peak periods. Today, those regions need it for their growing populations.

Citizen activism. With e-mail and the Internet, it has become much easier for neighborhood residents to band together and quickly shape sophisticated campaigns against construction of new power plants. On Monday, a group of South San Jose residents won a major victory when Mayor Ron Gonzales announced his opposition to the proposed 600-megawatt Calpine power plant for Coyote Valley. ``The question is not whether you need a power plant but what the location should be,'' said David Vossbrink, the mayor's spokesman, not ruling out other San Jose sites. ``The mayor has stated many times that his top priority is protecting neighborhoods.''

The comfortable world of regulation. In decades past, a few monopolies in California such as PG&E and Southern California Edison were guaranteed a profit margin, about 5 to 7 percent, by state regulators. If they built inefficient plants, the public would pay for them.

Fear over deregulation. When state lawmakers began talking in the early 1990s about opening up the system to competition, few private companies wanted to invest immediately. ``It created an uncertainty in the marketplace,'' said Claudia Chandler, a spokeswoman for the California Energy Commission. ``In a capitalistic system, people didn't want to make investments when there was no clear certainty as to how they would be repaid.'' The net result: Much of the state's power system is older than some of the engineers running it.

A staggering 61 percent of the California's fossil fuel-powered plants are 30 years or older, according to the state Energy Commission.

After deregulation went into effect in California in 1998, private energy companies such as Calpine, Duke Energy and others began rushing to build new plants and expand existing ones.

The state Energy Commission reports that of the 26 new or expanded power plants proposed statewide, five already have been approved. On average, it takes about two years to build a power plant after it wins approval. Most new plants in California today are fired by natural gas.

They aren't cheap. A 500-megawatt plant can cost $200 million or more -- the same as buying a new Boeing 747.

If all the proposed plants are built, it will increase capacity by roughly 30 percent over today's levels. But whether the state has enough future energy depends on factors that include how hot the weather gets, how many new transmission lines are built, how much energy is gobbled up by neighboring states and how many proposed plants are completed.

``We anticipate under extreme weather conditions that we will have problems both this summer and in 2001,'' said Daniel Nix, the California Energy Commission's deputy director for energy information and analysis. ``Whether that extends into 2002 depends on how many proposed power plants that have been licensed actually go to construction.''

Three are scheduled to go online next summer, followed by two in 2001. Altogether, they would pump nearly 3,700 megawatts into the state, which would be a significant addition given how perilously close California has come to exceeding its energy supplies.

Right now, the margin between OK and alarm is very slim.

At peak summer periods, the portion of California that uses the state's main power grid consumes 46,250 megawatts of power, while 46,400 megawatts are generated or imported from other states. That leaves a margin of 150 megawatts. And if the weather gets especially hot, as it did Wednesday, the state can easily find itself short by nearly 4,000 megawatts.

Moreover, electricity demand is growing fast. By 2003, the energy commission predicts, California will consume nearly 49,000 megawatts at peak periods.

Some of the firms that have proposed new plants may decide to delay if the market changes, according to officials with the energy commission.

In addition, these officials said, no one knows how many older plants that are deemed inefficient or unreliable may be pulled offline in the near future. ``That is a question that nobody has an answer to,'' said Chandler.

Still another problem is the system of high-power transmission lines that ferry electricity from the power plants to the utilities, which then distribute the power to homes and businesses. As with generating plants, construction of new transmission lines also has lagged behind the state's growing power demands, according to Karl Stahlikopf, vice president of the energy research company EPRI Corp.

At an energy conference in Redwood City last week, he warned that many of these lines are close to being overloaded. ``Unfortunately, (transmission-line) expansion is not keeping up with growth,'' he said.

Some experts say that the state can make much more progress reducing demand by better conserving energy. Government and utilities should offer more rebates and tax credits for buying energy efficient appliances, said John Berger, an energy consultant in Point Richmond.

``The cheapest new source of energy is energy efficiency,'' said Berger.

http://www.mercurycenter.com/premium/front/docs/power16.htm

-- Martin Thompson (mthom1927@aol.com), June 16, 2000

Answers

Conservation and distributed energy would solve most problems! The grid is an inefficient way to transmit power. Up tp 70% of electrical power is lost during transmission. 70%! Distributed power is much more efficient.

-- K. (infosurf@yahoo.com), June 16, 2000.