Seattle City Light warns usage cuts, blackouts possible

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City Light warns usage cuts, blackouts possible Chaos in California’s deregulation is to blame for shortage, officials say

Thursday, November 23, 2000

By SOLVEIG TORVIK SEATTLE POST-INTELLIGENCER STAFF

The chaos in California's newly deregulated energy supply system may cause rolling blackouts in Seattle this winter and prompt Seattle City Light to ask its biggest customers for voluntary cutbacks.

Utility officials say they may ask Boeing, Bethlehem Steel and downtown office buildings to reduce their electric use if California can't provide enough power to Northwest utilities to get them through the winter.

"We're trying to avoid rolling blackouts" this winter, said City Light spokesman Dan Williams. "We don't want to panic people. But the system is a little stressed right now, and (rolling blackouts) can happen if we don't get cooperation."

So far this week, California has experienced seven energy shortages. One necessitated purchase of 1,000 megawatts from the Bonneville Power Administration (BPA).

It takes 1,200 megawatts to keep Seattle powered up on average at any given time. California, which needs 30,000 megawatts to power the entire state, came up 5,000 megawatts short this week because of cold weather and generating plants being off-line for maintenance.

Utility officials throughout the region are dreading a January Arctic Express -- an onslaught of long-lasting low temperatures -- even more than usual because of a near-breakdown of the California power market and unprecedented volatility and demand.

The situation has prompted Energy Secretary Bill Richardson to propose that the Federal Energy Regulatory Commission tighten price controls in California. "I am very concerned that California's electricity markets continue to operate in a dysfunctional manner," Richardson said Wednesday.

The BPA, which markets hydropower from the Columbia and Snake rivers to utilities such as Seattle City Light, predicts a 6 to 10 percent possibility that regional demand will outstrip supply this winter.

Because of the turmoil in California, "we're in a more precarious position than we've been in the past," said BPA communications manager Dulcy Maher.

The Northwest, which provides California with excess power in summer to run air conditioners, relies on California to ship its excess power back here in winter when this region needs more electricity for heating and lighting.

But California's power system is short-circuiting. "We're having increasing concerns about the ability of California to supply power. They may not be able to return the favor in the winter," Maher said.

The debut of energy deregulation in California last summer and the ensuing debacle in the regional power market contributed to a recent Seattle rate increase and may cause upcoming power shortages.

The chaos prompted members of California's congressional delegation to ask Richardson to direct BPA to sign no more contracts for sales of power until Congress can review whether BPA's federally subsidized power should be available to "a broader constituency in the western United States" -- namely California.

That state can buy excess BPA power on the wholesale market, where prices can change minute by minute. But the Northwest Power Act requires BPA to serve the Northwest's needs first, and Gov. Gary Locke fired off an immediate protest to Richardson, as did all eight Northwest senators.

"Rather than seek scapegoats beyond the borders of their state, Californians would do well to at least attempt to fix their failed electricity restructuring plan," wrote the senators from Washington, Oregon, Idaho and Montana.

Maher said BPA and Northwest utility officials will travel to California early in December to determine whether that state can be relied upon to help the Northwest this winter, especially in case of a weather-related emergency.

"We need to see if they are willing to grant an environmental exception to generate power if the Northwest needs it," she said. One environmental exception -- certain to provoke controversy -- would be for a California generating plant to violate that state's clean-air emission standards to provide power for the Northwest in a crisis.

A variety of options exists for conserving energy during periods of shortages, including outright interruption of some supply and low-range options such as turning off office computers and lights overnight.

Seattle homeowners also will be asked to use electricity more sparingly, Williams said. But because Seattle residents have been so diligent in wrapping their water heaters and insulating their homes since the energy crisis of the 1970s, there isn't as much additional energy to be saved from the residential market as from business and industry.

Because Seattle City Light has had to buy wholesale power at peak prices, it faced a combined $70 million budget deficit for this year and next, according to Williams. A megawatt of electricity, which normally costs City Light $25 to $30, rose as high as $1,000 as California utilities frantically bid on power last summer. The wholesale price settled to about $200.

While City Light produces all but 15 percent of its own power, buying that 15 percent on the wholesale market consumed 40 percent of the utility's budget this year.

To cover the deficit, the Seattle City Council early this month passed a "temporary" rate boost of 8 to 10 percent, or an average of $3 a month per homeowner. The increase is expected to last 18 months.

After that, City Light officials expect to drop the temporary boost. The utility just bought some 600 megawatts of so-called "firm" power from BPA on a 10-year contract at a projected savings of $878 million, compared with buying it on the wholesale market. And it bought 100 megawatts from the city of Klamath Falls' natural-gas turbine generating plant.

"We're hoping those two new sources of energy and conservation will get us out of the wholesale market," said Williams.

But long-term concerns still loom. The Northwest Power Planning Council -- representatives of the governors from Washington, Oregon, Idaho and Montana -- cautions that in three years the Northwest system will be short 2,500 megawatts of generating capacity. That's roughly twice the amount of power needed by Seattle. And the system will have a 24 percent probability of being unreliable.

"That's unacceptable," said council spokesman John Harrison.

Solveig Torvik is associate editor of the P-I's editorial page. She can be reached at 206-448-8030 or solveigtorvik@seattle-pi.com

http://seattlep-i.nwsource.com/local/lite24.shtml

-- Martin Thompson (mthom1927@aol.com), November 25, 2000


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