PG&E offers some firms blackout exemptions: Utilities map strategies as grid fears grow By Carrie Peyton Bee Staff Writer (Published Aug. 13, 2000)

Weeks after it imposed the first rolling blackouts in the Bay Area, Pacific Gas and Electric Co. has begun signing up its biggest customers for a little-known program that lets them escape future outages. Word was given quietly through account managers to big companies that if they promise to make measureable cutbacks at PG&E's command, they would never face the random roll of blackouts through their neighborhoods.

The program has been on PG&E's books since the 1980s with little advertisement and no takers. But with California under the threat of more forced outages, the program picked up its first two participants within the last month, and at least a half-dozen more are working to qualify.

Throughout the broad swath of Northern California served by PG&E, no similar conservation option is offered to small businesses or individuals, who face random blackouts if the state's fragile electric grid cannot deliver power to everyone.

Pointing out millions of dollars can be lost in a major outage, some in business and government argue that it's appropriate to guarantee large enterprises -- but not homes and smaller users -- more reliable electricity.

But not everyone is sure.

It's fine to offer incentives to conserve, but "to get an absolute right not to be blacked out is a bit much," said Loretta Lynch, president of the state Public Utilities Commission.

Lynch has vowed to probe utilities' blackout plans as the PUC, the state attorney general and others mount investigations into California's restructured electric industry, which has been blamed for soaring prices and declining reliability.

The California Independent System Operator, the nonprofit agency that oversees reliability and would order blackouts, has said California faces a one-in-four chance of rotating outages before the end of summer.

Regulators and consumer advocates are only beginning to look into whether the darkness would fall equally on all.

Northern California utilities are taking widely varied approaches to who would lose air conditioning, computers and other electric essentials for how long and whether they would be warned beforehand. Some offer clues through special codes on electric bills. Others say nothing.

Some downtowns -- San Francisco and Oakland -- have been promised they'll be exempt. Sacramento hasn't. Some people will never get blacked out because they live near a hospital or a sewage treatment plant.

"No matter what you do, you'll create some unhappy customers saying, 'Why is my circuit on the chopping block first?' " said Tom Habashi, Roseville's electric utility director.

The PUC requires blackout programs to be "fair and equitable," but regulators have never reviewed utility maps to see if the outages would fall more heavily on poor or minority neighborhoods.

In addition, state fairness requirements only apply to investor-owned utilities. Ratepayer-owned utilities such as SMUD and Roseville can -- and do -- set their own rules.

Roseville's city utility has promised NEC Electronics that everyone else in town will have to take a turn at losing power before lights even waver at its semiconductor plant.

The Sacramento Municipal Utility District plans to impose its first rotating outages predominantly on newer neighborhoods, because they have substations with remote shutoff controls. Laguna, Folsom and Antelope will be among the likeliest to face outages, while central neighborhoods such as east Sacramento, Land Park, Oak Park and Wilhaggin initially will escape.

Statewide, "we haven't looked at these things and we need to," said Nettie Hoge, head of The Utility Reform Network, a Bay Area ratepayers group. She branded the PG&E exemption program clearly unfair to small consumers.

Twice this month, the California Independent System Operator has been poised to call "stage three" emergencies, when it can order utilities to cut off power in selected areas to avoid a grid collapse that could spread throughout the West.

The power crunch has been blamed variously on growth, a lack of new power plants and electric industry restructuring. But there is broad consensus that it will continue through this summer and then worsen in summer 2001.

If it triggers deliberate outages, there probably will be only two certainties statewide: The outages will be relatively small and relatively short.

Everything else depends on which company sends you your electric bill.

Most residents of Yolo, El Dorado and Placer counties get their electricity from PG&E, which this summer staged a localized version of the blackouts that could be ordered statewide.

Over several hours on June 14, nearly 100,000 homes and businesses in the San Francisco Peninsula and East Bay were blacked out, most for about an hour.

PG&E runs its outages in groups called blocks. There are 14 blocks of 860 megawatts each, about enough to serve 860,000 households, according to PG&E. But they are scattered geographically: "Block 1" customers could range from Fresno to Eureka.

In the June incident, it turned off power to parts of blocks 1 and 2.

"Next time, we will start where we left off," said Carl Bellone, PG&E director of emergency and technical support. "If it's three years from now, we will begin the next one with block 3."

PG&E household customers can find out their block number by looking on the lower left-hand corner of the front page of their bill or phoning the utility at 1-800-743-5000. Nearly 40 percent of bill payers won't see the phrase "rotating outage block." That means they are exempt from planned outages because their power comes down the same line that feeds a prison, a hospital, a traffic control facility, a TV or radio station that makes emergency broadcasts or one of a host of other "essential" customers.

In the next planned outage, it's likeliest that each block would be shut off for an hour or two before someone else takes his turn, and it's likely that fewer than 4 percent of customers would be affected at any one time.

On a day when the electric grid appears overtaxed, PG&E will let people know rolling blackouts could occur. But it won't identify the selected communities, saying it doesn't want to tip potential criminals to areas where power could go out.

Experts say PG&E is more likely to shut off areas with remote controlled circuits, as occurred in June, but no one at the utility or the PUC has looked into whether those areas are any richer or poorer than its territory as a whole.

An initial PUC review of the June outage did not reveal "any pattern that would lead us to any conclusions of problems," said commission president Lynch, although she promised further review to "assure everybody that they're fair and equitable."

The Sacramento Municipal Utility District, which serves almost all of Sacramento County and a thin slice of southern Placer County, also will try to divert its blackouts around key facilities such as sewage treatment plants, said assistant general manager Dick Ferreira.

It will put downtown Sacramento last on its blackout list because of the jail, elevators in its many high-rises, and the structure of the network serving the area.

And at least for this summer, it is unlikely to turn off power to customers in older neighborhoods where substations don't have remote controls. Altogether, only about one-third of SMUD's customers are served by 48 newer substations that can be switched off from SMUD's control room.

SMUD will not announce in advance which of those substations will be chosen first, saying that won't be determined until the size of the problem is known.

"In the long run, the fairness issue is that the whole community should share in this," said Ferreira, and SMUD will look into blacking out some older neighborhoods next summer if needed.

Meanwhile, the utility hopes to ease the blow by keeping any rolling outages much shorter than PG&E's -- just 20 minutes per home or business before the blackout moves elsewhere.

"That way you don't have your freezers out for a very long time," he said.

In Roseville, where the city runs its own electric system, rotating outages will last up to two hours, and won't hit anyone twice in the same summer.

The city won't say who will be blacked out first, partly because it will depend on the size of the blackout needed, and partly to avoid upsetting people in advance, said utility director Habashi.

While stressing that every circuit is theoretically eligible for blackouts, Habashi said, Roseville's policy calls for postponing outages as long as possible on circuits where "we cause the town quite a bit of economic loss."

NEC is specially protected by contract. Hewlett Packard and other large customers also will be among the last to be pulled into any blackouts. The city's new regional mall, set to open Aug. 25, "probably ... would not be on the top half of the list," he said.

Outages can cost big business millions, and can hit semiconductor firms especially hard.

"On June 14, during the blackouts, one of our member companies lost $3 million in three hours," said Michelle Montague-Bruno of the Silicon Valley Manufacturing Group.

"A couple of other companies are telling me that if they lose power at the wrong time in the wrong place, it can be as much as a million dollars a minute," she said.

http://www.sacbee.com/news/news/local02_20000813.html

-- Martin Thompson (mthom1927@aol.com), August 13, 2000

Answers

State to Probe PG&E Load Shedding Policy LCG, Aug. 14, 2000--Pacific Gas & Electric Co. is dusting off a long- standing but unused load shedding policy that would give some large industrial and commercial customers immunity from random blackouts when the lights blink out at other locations in their neighborhoods.

According to a report published yesterday in the Sacramento (Calif.) Bee, PG&E account managers are "quietly" getting the word out to big power users that if the agree to reduce power consumption on demand, the utility will keep the power flowing. The paper pointed out that small commercial and residential customers are excluded from the program.

Loretta Lynch, president of the California Public Utilities Commission, has promised to investigate the program. "To get an absolute right not to be blacked out is a bit much," she said. The PUC, the state attorney general and a special panel set up by Gov. Gray Davis are investigating Californias deregulated electric industry, which has been blamed for soaring residential electric bills in San Diego.

Recent high temperatures -- another siege of heat is forecast for this week -- has kept the California Independent System Operator at the point of ordering a "Stage 3 Alert," which would trigger rolling blackouts. Only recently have officials become concerned whether the risk of being blacked out is evenly distributed.

On June 14, 97,000 San Francisco Bay Area electric customers in all classes had their power cut for about an hour when there wasnt enough electricity to go around. The outages were blamed on a heat wave, but the real reason was an insufficiency of generation in the region. That resulted in a low-voltage indication at PG&Es Hayward substation, and that in turn triggered the outages.

Californias booming high-tech economy has not only created a huge demand for electricity, it is churning out products that themselves require more electricity. At the same time, regulatory uncertainty throughout the 1990s dampened utilities enthusiasm for investing in new power plants. Add to that federal encouragement of non-utility investment in power plants through the Public Utility Regulatory Policy Act -- the hated PURPA which required utilities to buy power from independent "qualifying facilities" -- and you have a predictable power shortage.

http://www.energyonline.com/Restructuring/news_reports/news/0814ca.htm l

-- Martin Thompson (mthom1927@aol.com), August 15, 2000.