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Enron Mail |
Date: 12/13/00 4:47 PM 4:47 pm edt Energy chief moves to avert California blackouts Eds: LEADS to UPDATE with U.S. energy secretary ordering power generators to sell power to California. With BC-CA--Power Woes-Glance slasmt By STEVE LAWRENCE= Associated Press Writer= SACRAMENTO (AP) _ U.S. Energy Secretary Bill Richardson said Wednesday he would force power generators to sell electricity to California to prevent rolling blackouts. The announcement came as California power regulators warned of the likelihood of a Stage Three power alert with rotating blackouts Wednesday afternoon due to trouble buying electricity from the Northwest. About a dozen suppliers were demanding cash before selling power to California due to concerns about the utilities' solvency, said Kellan Fluckiger, chief operating officer of the Independent System Operator, keeper of the state's electrical grid. California's two largest utilities, Pacific Gas and Electric and Southern California Edison, are near bankruptcy due to skyrocketing wholesale power costs, Gov. Gray Davis and Sen. Dianne Feinstein, D-Calif., said at a Washington, D.C., news conference with Richardson. Richardson said he was using emergency powers to force wholesalers to sell power to California at a price he deemed fair. He said he would also request that two large Pacific Northwest power generating associations generate more power to send to California. Davis and Feinstein also asked federal regulators to set a regional price cap on wholesale electricity to prevent the high prices that have plagued California. On Friday, the Federal Energy Regulatory Commission lifted price caps in California. Record wholesale power prices followed, and PG&E warned it was in financial danger. ``The credit limits of utilities and what markets are willing to sell us have been reached and surpassed in many cases,'' Fluckiger said. ``There are questions about utility solvency. That has come to a head today.'' He said officials may have to interrupt power to about a million customers Wednesday afternoon and then increase the blackouts to cover three million or four million in late afternoon and early evening, when people come home from work and power demand hits a peak. Steve Hansen, a spokesman for Southern California Edison, whose territory includes metropolitan Los Angeles but not the city, said the utility had not ordered blackouts by early afternoon. ``We have heard that it may not be as bad as we thought here,'' he said. ``We're waiting for some kind of official word from the ISO or somebody.'' An unprecedented Stage Three emergency was issued last Thursday, meaning reserves had fallen below 1 1/2 percent. In that case, the state fended off the threat of rolling outages by turning off two power-sucking water pumps on the Delta. ``California is heavily import-dependent and had been for 20 years. This is a West-wide problem,'' Fluckiger said. Blackouts, if used, would probably last about an hour to 90 minutes and occur mostly in Northern California due to transmission limitations there, Fluckiger said. ``It's a fairly bleak picture,'' he said, adding that the chances of blackouts were better than 50-50. ``This thing will not change unless something is done to alleviate the credit situation.'' Contributing to the problem was a shortage of water to power hydroelectric generators in the Northwest and California, Fluckiger said. ``We have reservoirs so low that we have people standing by them watching the situation to make sure it does not go below safe limits,'' he said. Gas-fired generators could be brought on line to ease the situation but natural gas prices are so high they would not cover the operating costs, Fluckiger said. ``Requests have been made to operate those facilities and then have the utilities pay for those excess gas costs,'' Fluckiger said. ``The utilities have not been able to do so. They have requested permission from the PUC to be able to pass those costs through to customers.'' Utilities would decide who would face blackouts, he said. They try to avoid areas with essential services such as hospitals, Fluckiger said. California's power market has been hit for months by tight supplies and price spikes. Electricity deregulation, cold weather and rising power costs have been blamed for the state's most recent problems. California approved a phased-in deregulation of the electricity market in 1996 to try to lower prices for consumers through competition, but so far it has led to higher energy prices. The Northwest, heavily dependent on hydroelectric power, has faced low water tables and had to import electricity from California and other states. And wholesale power costs have been soaring, due in large part to skyrocketing prices for natural gas. Wall Street is worried about utilities' economic health, and on Tuesday, a consumer group urged the state to seize and run the strapped $20 billion electricity system. A Stage One alert was declared Wednesday morning, meaning power reserves were below 7 percent and all power users are asked to conserve. Stage One and Stage Two emergencies, in which power reserves fall below 5 percent, have become routine this month, but last Thursday's Stage Three was the only time the threat of blackouts loomed. ___= EDITOR'S NOTE: Associated Press writer Bart Jansen in Washington contributed to this report. AP-WS-12-13-00 1646EST
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