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Enron Mail |
California warns of possibility of rolling blackouts
STEVE LAWRENCE, Associated Press Writer Wednesday,?December 13, 2000 ,2000 Associated Press (12-13) 14:50 PST SACRAMENTO, Calif. (AP) -- U.S. Energy Secretary Bill Richardson ordered Northwest generators to sell electricity to California utilities Wednesday after state regulators warned that low power supplies could force rolling blackouts. The warning came from the Independent System Operator, keeper of California's power grid. It said that electricity supplies were so perilously low that it might declare a Stage 3 power emergency for only the second time ever. At Stage 3, the grid can impose blackouts. Richardson said at a Washington, D.C., news conference 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 send more power to California. ``Our objective is to keep the lights on in California through this emergency situation,'' he said. ``We're dealing with a potentially very serious situation here.'' California has been caught in a power crunch over the past several days, in part because of cold weather in the Northwest -- where California buys much of its power -- and the shutdown of some generating plants for maintenance. 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. Davis and Feinstein 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 problem became especially acute when about a dozen suppliers began demanding cash before selling power to California, Kellan Fluckiger, the ISO's chief operating officer, said Wednesday. ``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 as many as 4 million customers Wednesday afternoon and early evening, when people come home from work and power demand hits a peak. An unprecedented Stage 3 emergency was issued last Thursday, meaning reserves had fallen below 1.5 percent. But the state fended off rolling outages by turning off two power-sucking water pumps. This time, Fluckiger said any blackouts would probably last about an hour to 90 minutes and occur mostly in Northern California. ``It's a fairly bleak picture,'' he said. ``This thing will not change unless something is done to alleviate the credit situation.'' A Stage 1 alert was declared Wednesday morning, meaning power reserves were below 7 percent and all power users are asked to conserve. Stage 1 and Stage 2 emergencies, in which power reserves fall below 5 percent and large commercial customers can be forced to shut down, have become routine this month, but last Thursday's Stage 3 was the only time the threat of blackouts loomed. Contributing to the problem is 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. The power crunch over the past few months has been blamed in part on electricity deregulation. 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. At the same time, wholesale power costs have been soaring, in large part because of skyrocketing prices for natural gas. Wall Street is worried about utilities' financial health, and on Tuesday, a consumer group urged the state to seize and run the strapped $20 billion electricity system. ,2000 Associated Press ?
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