California Power Plants to Shut Down for Maintenance

Sep. 7--Aging power plants running close to full throttle all summer are shutting down for tune-ups cutting the state's energy supply nearly 15 percent, and posing another critical test for California's deregulated electricity market and its customers, who may see more high prices.

State energy officials say they are worried higher electricity prices will persist as up to 4,500 megawatts of generating capacity comes off line for scheduled maintenance starting this month. It is enough to fuel 1.3 million homes each day and represents the biggest scheduled dip in electricity production dating back to least January 1999, records show.

If the weather cools, there should be no trouble. If it doesn't, the state's energy crisis could worsen especially if any of the state's more than 1,000 power plants suffer unexpected breakdowns.

"It's a real problem," said Carl Wood, a member of the California Public Utilities Commission. "We were hoping that prices would start going down after these outrageous prices we have been seeing.  It could extend the period of high prices well beyond the summer months."

The maintenance shutdowns, which will continue next month, are just one more worry for consumers, energy producers and state officials living with an experimental system so fragile it has almost no margin for error. Energy customers have been urged to cut back and prices have soared for Orange and San Diego County customers. Although energy demand typically drops in the falls as temperatures drop, a lot depends on Mother Nature. The Central Valley anticipates low 90 temperatures early next month while cooler weather is predicted in Southern California.

The high number of shut downs will be the subject of an ongoing Public Utilities Commission probe into the way electricity is bought and sold under the two-year-old system of deregulation, Wood said. He wants to make sure plants are closing for legitimate reasons and not just to keep prices high.

As much as 4,500 megawatts will come off line this month and in October with the average between 3,000 and 4,000 megawatts a day, state officials say. That represents nearly 15 percent of the 32,057 megawatts consumed a year ago, when about 2,000 megawatts came off-line for planned maintenance. Since then, the state has added 500,000 residents and 387,000 jobs, but no new energy sources. "During peak periods, the generators were doing their darndest to keep things on during the summer," said Ed Riley, director of operations for the California Independent System Operator, which manages 75 percent of the power grid. "Having those units off during the fall and spring periods is what really concerns me. We will be almost as vulnerable as we are now, because they have to do the work. There are substantial amounts of units scheduled in October to do preventive maintenance." "It is one of the issues I will be investigating," Wood said.

Energy company executives say the planned maintenance is necessary to keep plants running when demand is higher. About 60 percent of the state's energy is produced by power plants built at least 40 years ago before most Californians owned their first television. Increasingly, those plants need to be repaired, said Gary Heath, executive director of the state's Electricity Oversight Board, which oversees the Independent System Operator.

But Heath said he is concerned "units are coming down too soon." "We possibly may have to delay some repairs," he said. At least 2,000 megawatts will come down Oct. 1 at the nuclear plant Diablo Canyon and at Duke Energy's Moss Landing plant both in Northern California. Moss Landing will be off-line for three months. The situation is compounded because about 500 megawatts a day shut down because of unexpected maintenance problems, known as forced outages, Riley said.

"With these two big units down and forced outages, there are lots of ways to have trouble happen," said Thomas C. Williams, a spokesman for Duke Energy. The state Independent System Operator has refused to release maintenance schedules, saying they are secret. Agency officials say disclosure could affect buying and pricing strategies. They won't name plants, locations, or reasons for the maintenance.

"We are not going to give out potential market information," Riley said.

Wood said the secrecy issue will be part of the commission's investigation. of the energy market. Now, the commission has no idea what plants are closing or why.

The system worked much differently prior to 1998, when it was under state control. Back then, plant owners coordinated information about shutdowns and maintenance schedules, said Kevin Cini, manager of energy supply and marketing at Southern California Edison.

Heath of the state Electricity Oversight Board said he doesn't believe energy companies close plants during the summer to drive up the price of electricity. It was simply too lucrative for the plants to stay open and sell energy at inflated prices, he said.

The best way to solve the problem, Riley said, is to build more power plants. But the state doesn't expect any new plants to come on-line before next summer.

In the meantime, more uncertainty lies ahead for residential and business customers who have seen their bills triple in Orange County.

"The question on everybody's mind is what is wrong with the market and how is it going to get fixed in the shortest period of time so it doesn't cause harm to folks," said Karen Mills, an attorney for the California Farm Bureau Federation, a nonprofit group representing 45,000 farming families. "These are not easy questions. There are so many places that need to be fixed along the way."

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-- Martin Thompson (mthom1927@aol.com), September 07, 2000