Are California Grid managers crying wolf?

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Grid managers warn of more power shortages; Davis says they're crying wolf Filed: 01/12/2001

By STEVE LAWRENCE

Associated Press Writer

SACRAMENTO, Calif. (AP) — Managers of California's power grid are telling consumers to expect daily warnings of electricity shortages, but Gov. Gray Davis claims the managers aren't doing enough to find energy.

"They have an inherent conflict of interest," Davis spokesman Steve Maviglio said Thursday after the state narrowly avoided rolling blackouts in another day of tight electricity supplies.

He contended the power generators on the board of the grid manager, the California Independent System Operator, benefit from the higher wholesale electricity prices brought on by the power alerts.

Jim Detmers, the ISO's general manager, said ISO officials were "not crying wolf" in calling the alerts.

A state Assembly committee, urged on by the administration, approved a bill Thursday to replace the ISO board created by 1996 legislation with a three-member panel appointed by Davis. The new board members could have no ties to the electricity industry.

Meanwhile, as the state's power crisis reached a new peak Thursday, Pacific Gas & Electric Co. announced 325 layoffs.

ISO officials raised the possibility of rolling blackouts after a powerful storm crippled a key nuclear plant while other electric generating stations shut down for maintenance.

Loretta Lynch, head of the state Public Utilities Commission, told an Assembly committee that when PUC inspectors went to one Southern California power plant that shut down unexpectedly they were denied admission for nine hours.

She said she didn't know yet if the inspectors found any improper conduct at the facility.

The storm and repairs hampered enough plants to cut the state's power generation one-third. Regulators declared a Stage 3 alert as reserves dropped below 1.5 percent.

The alert was extended until 3 a.m. Friday in Northern California, then dropped to a Stage Two alert, which means reserves are below 5 percent.

ISO officials credited an influx of power from Oregon and Washington state with fending off outages Thursday. The Pacific Northwest found itself with plenty of power and sent 4,200 megawatts south; California usually takes in 1,500 megawatts a day from the region.

Electricity shortages linked to California's botched deregulation of the power industry have produced soaring prices and sporadic threats of blackouts in California since last June.

Maviglio said Davis and legislative leaders were able to get another 358 megawatts on-line Thursday by calling the heads of two-power generating companies, Southern California Edison Co. and Oklahoma-based Williams Co.

"It was available but apparently ISO did not go after it," said Maviglio, who did not know why SoCal Edison and Williams did not make the power available to the grid earlier. "ISO repeatedly has been issuing warnings without exhausting all of their resources."

The ISO's Detmers said the grid's power hunters were "well aware of those megawatts" and were addressing their availability.

He denied any pro-supplier action by the ISO board, noting that its members also include state officials and investor-owned utilities. California has fundamental supply problems, he said.

"We can expect these alerts daily," said Detmers.

Davis and the ISO are urging consumers to conserve energy, a call that is hitting home across the state.

The ISO asked Pacific Gas & Electric Co. to cut off customers who volunteered for power stoppages in exchange for lower rates.

Officials at California State Polytechnic University in Pomona, east of Los Angeles, closed the 19,000-student school to conserve energy.

In San Francisco, Mayor Willie Brown dimmed the lights in his office and instructed all city departments to scale back power use.

"It's almost to the point where the working class is being held hostage," said Naomi Willis of Oakland, who started burning candles to cut down on using lights. "What can you do without electricity? Nothing."

California's power production fell more than 15,000 megawatts — enough to power 15 million homes — as the storm arrived with high wind and heavy rain and plants were struck by unrelated mechanical problems.

At least five plants shut down Wednesday night or early Thursday because of maintenance needs, the ISO said, refusing to identify them.

Other plants were forced to reduce power because of the storm, including the Diablo Canyon nuclear station in San Luis Obispo, north of Los Angeles.

The plant cut back output to 20 percent of normal after high surf blew sea kelp into intake valves. The station normally provides enough electricity to serve about 2 million people.

The storm knocked out power to more than 20,000 customers in Los Angeles, and scattered outages were reported in Marin County, north of San Francisco.

The ISO expected a few of the downed plants to return to operation Friday, but estimated the state would still be down 13,500 megawatts.

On Thursday afternoon, Energy Secretary Bill Richardson extended an emergency order requiring out-of-state power suppliers to direct excess power to California and to keep selling to PG&E and SoCal Edison despite their poor credit.

PG&E and SoCal Edison — hit by high wholesale prices and battered on Wall Street — say they face bankruptcy if they don't get more cash soon. The two utilities — which serve some 25 million people — estimate their losses at more than $10 billion.

PG&E laid off 325 employees Thursday and said it expects to let go another 675 if its finances do not improve, spokesman Ron Low said. Low said those layoffs and other cost cutting measures would save the company $180 million.

State regulators have approved rate increases of 7 percent to 15 percent for PG&E and SoCal Edison customers, but Wall Street and the utilities said it will not be enough.

PG&E, already denied credit to buy electricity, warned Davis this week that it is running low on credit to buy natural gas.

Davis and Clinton administration energy officials planned to resume talks over the weekend on possible solutions to the energy crisis.

http://www.bakersfield.com/oil/Story/273861p-255917c.html

-- Martin Thompson (mthom1927@aol.com), January 12, 2001


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