California's power problems at-a-glance Filed: 12/14/2000

By The Associated Press

Here are questions and answers on California's electricity crisis:

Q: What caused the threat of blackouts Wednesday?

A: About a dozen power generators, including several in the Pacific Northwest, demanded cash for their power because of the poor financial condition of two of California's biggest utilities, Pacific Gas & Electric Co. and Southern California Edison.

Wholesale power costs have been soaring, due in large part to high natural gas prices. Under California's 1996 deregulation law, privately owned utilities had to sell their generation facilities and start buying power to serve their customers.

Adding to the problem are low water tables in the Northwest. The region is heavily dependent on hydroelectric power and has had to import electricity from California and other states.

Q: What has caused the utilities' financial woes?

A: PG&E and Edison are under temporary rate freezes imposed by the deregulation law. The companies say they have lost about $6 billion because of increases in wholesale prices and are near bankruptcy. Officials say the situation was exacerbated last Friday when the Federal Energy Regulatory Commission lifted wholesale price caps in California.

Q: What eased Wednesday's crisis?

A: State officials say action by U.S. Energy Secretary Bill Richardson was the biggest factor. Richardson ordered wholesalers to sell power to California utilities and asked two large Pacific Northwest power generating associations to generate more power to send to California.

Q: What would have happened if blackouts hit?

A: If the California Independent System Operator, the manager of the state's power grid, had declared a Stage 3 electricity shortage, rolling blackouts, likely from an hour to 90 minutes, could have been ordered, mostly in Northern California.

Q: What's next?

A: State officials say blackouts are unlikely the rest of the week but further problems loom without major changes in California's electricity market. The Federal Energy Regulatory Commission said it will announce changes Friday. Gov. Gray Davis wants the commission to set a regional price cap on wholesale electricity.

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-- Martin Thompson (mthom1927@aol.com), December 14, 2000