Blackouts benumb California, natural gas threat escalates

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Blackouts benumb California, natural gas threat escalates By Alan Zibel STAFF WRITER

The state's energy crisis worsened Thursday as 670,000 people were plunged into darkness for parts of the day and Pacific Gas & Electric Co.'s chief executive warned of "the very real possibility of natural gas shortages in the coming weeks."

While power officials do not expect more rolling blackouts today or over the weekend, cash-strapped PG&E warned that natural gas could be cut to homes, hospitals, businesses, refineries and power plants.

Despite the natural gas problem, power officials believe the electricity shortage may ease in the next 10 to 14 days. During that time, about 4,000 megawatts of generating power that are now off-line due to breakdowns or scheduled maintenance are scheduled to turn back on, said Kellan Fluckiger, chief operating officer of the California Independent System Operator, which manages much of the grid.

PG&E, which defaulted on a $33 million bill on Wednesday, said six natural gas suppliers have stopped or may stop delivering gas by Tuesday. These suppliers add up to 36 percent of the company's daily supply. PG&E says it has about two weeks of reserves.

Other suppliers, which account for another 30 percent of daily supplies, are considering shutting off the flow of gas, PG&E said. The company has less than two weeks' supply of natural gas in storage, company spokesman John Nelson said.

PG&E has asked Gov. Gray Davis to provide short-term financial assistance so gas suppliers will sell to the utility. It has also asked President Clinton to declare a natural gas supply emergency.

Davis has asked the federal government to issue an emergency order requiring natural gas suppliers to sell into the state. The federal energy department has not yet decided what to do about this request.

"We have done our best to call attention to this crisis and obtain assistance to avert a catastrophe, and now we must wait to see if the state and federal governments will step in to ensure that natural gas flows to homes and businesses," Gordon Smith, the company's president and chief executive officer, said in a statement.

In the second day of rolling blackouts, power was cut to schools, museums, businesses and traffic lights across an area of California north of Kern and San Luis Obispo counties up to the Oregon border, including the Bay Area.

Power grid officials took the unusual step of placing the state in a Stage 3 electrical alert overnight and through the whole day today. Keeping the state in the highest-level of alert ensures that some power supplies can be used that wouldn't otherwise be available.

"It is really an indication of how close to the edge we are," Fluckiger said.

Power officials say they are faced with several problems at the same time: an unusually high number of plants out for maintenance or breakdowns, low water levels that limit the amount of hydroelectric power that can be generated, and an unusually cold winter. Compounding this are the financial woes of PG&E and Southern California Edison, both of which say they are nearing bankruptcy.

"We have a financial crisis going on as well as a power crisis," Fluckiger said. "One exacerbates the other."

Thursday's outages began about 9:50 a.m. and concluded about 1:30 p.m, as PG&E blacked out customers for an hour or more. PG&E had to use crews to manually switch the electricity back on in some areas.

"I was in a darkened office and my phone still worked, but it's kind of hard to read the phone numbers when you can't see the dial," said John Greenagel, a spokesman for Advanced Micro Devices Inc., a Sunnyvale maker of computer microprocessors.

Virtually every city in the Bay Area had some part of its population affected. PG&E did not release a list of neighborhoods thrown in the dark, out of concern that criminals could determine the utility's blackout pattern.

PG&E picked which neighborhoods and businesses to black out by dividing its service area into 14 blocks, each with 150,000 to 200,000 customers.

If blackouts start again, they will continue with the rest of block nine, Nelson said.

The company also said blackouts will continue to happen in numerical order. Customers' block numbers generally do not change unless a new electrical circuit is added, Nelson said.------>

Fluckiger also said power officials were working on purchasing more power from Canada, which is not affected by U.S. Energy Secretary Bill Richardson's emergency order insisting that any spare power go to California.

The company's parent, Edison International, forfeited millions of dollars in power contracts by failing to pay $215 million it owed the California Power Exchange -- the state's electricity market -- by noon, a power exchange official said.------>

The cost of rolling blackouts to Silicon Valley businesses was still being tallied but it's already in the tens of millions of dollars, said Carl Guardino, president of the Silicon Valley Manufacturing Group, which represents 200 companies.

Guardino said several companies' chief executives told him they were considering exit strategies if California did not get its power act together.

It's not a threat. It's a reality of business, Guardino said.

At Hewlett-Packard Co., eight of the company's 55 Bay Area buildings -- including the Palo Alto corporate headquarters -- lost electricity for about an hour starting at 10:30 a.m. About 2000 employees were affected.

I went back to the old pencil-and-paper thing, said Randy Lane, a spokesman for the computer maker. I'd say it was an inconvenience with a very small loss of productivity and no catastrophic failures.

While some experts blame the power crisis on the state's botched plans for electricity deregulation and the utilities' financial woes, Fluckiger said the crucial problem is simple: there aren't enough power plants.

He said the state needs to add at least 10,000 megawatts of generating capacity to the 45,000-megawatt total to avoid these kinds of problems. That won't be done for several years, he said.

California needs to be prepared for the next couple of years to be in an energy shortage situation, he said.------>

Wire services contributed to this report.

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-- Martin Thompson (mthom1927@aol.com), January 19, 2001


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