WIRE:08/01/2000 16:46:00 ET UPDATE 2-California seen facing rolling power blackouts

LOS ANGELES (Reuters) - A stage-three power emergency is expected to be declared in California this afternoon, triggering rolling blackouts across the state, with a heatwave seen sending demand to record levels. Federal power marketer Bonneville Power Administration (BPA) said it expects a stage-three emergency to be declared at around 1400 PDT/1700 EDT with heavy use of air conditioners seen sending reserves down to dangerously low levels. A stage-three alert would be issued by the California Independent System Operator (ISO), which operates most of the state"s power grid. The agency has already issued a stage two emergency, which took effect at 1200 PDT/1500 PDT. BPA, which markets power from massive federally owned hydropower dams in the Pacific Northwest, said it would do what it could to assist California, and may itself declare an emergency which will lift certain operations which protect fish from the turbines. "This emergency is very real. I have been assured it is a human health and safety issue. The elderly, sick and infants are particularly vulnerable in extreme temperatures when there are power failures," said BPA Administrator Judi Johansen. A stage two alert results in the loss of power to certain commercial and industrial customers whose contracts allow them to have their service interrupted when supplies are tight. Earlier Tuesday, the ISO said it expected all-time record power demand in California. The ISO forecast peak demand to reach 46,245 megawatts (MW) on Tuesday, above the previous record of 45,884 MW set July 12, 1999. The state"s power problems are rooted partly in the nation"s booming economy, with Western states among those showing the fastest growth. Power loads in Nevada, for example, have soared 51 percent in the past 10 years, helping to absorb the Southwest"s power surplus, which used to be exported to California. There have also been few power plants built during the past 10 years, and although many are now planned, the prolonged approval and construction process means most will not come on line before 2002. Temperatures soared across the state on Tuesday. San Francisco was expected to reach a high of 77 degrees Fahrenheit on Tuesday, while San Jose, the heart of Silicon Valley, was forecast to reach 90 degrees, well above their normal highs at this time of year of 72 and 74 respectively, according to Weather Services Corp. Most Bay Area inland areas were expected to see triple digit temperatures. In California"s central valley, temperatures were seen peaking at 105 degrees in Sacramento while Fresno was expected to reach 107 degrees, WSC said. In southern California, Los Angeles was forecast to reach a high of 76 degrees Tuesday, although it was expected to be significantly hotter in nearby valley communities, with many forecast in the triple digits.

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-- Martin Thompson (mthom1927@aol.com), August 01, 2000

Answers

08/01 17:31 California Utilities Cut Power to Some Customers (Update1) By Christopher Martin

Folsom, California, Aug. 1 (Bloomberg) -- PG&E Corp., Edison International and Sempra Energy said they cut power to some California customers and may rotate blackouts this afternoon as a heat wave fuels record electricity use in the state.

The state declared an emergency at 11 a.m. local time and asked utilities to cut power in a voluntary program an hour later. California's grid operator said demand will surge to 46,245 megawatts, topping last July's high.

Electricity prices reached their limit as temperatures topped 100 degrees Fahrenheit, increasing pressure on regulators to cut the cap at a meeting today. During the 10 hottest hours, when air conditioning was expected to peak, prices on the California Power Exchange reached $500 a megawatt hour.

The California Independent System Operator's board voted to reduce the cap to $250 with 15 governors for the reduction and 6 against it. The cap was reduced a month ago from $750 after hot weather in May and June doubled monthly power bills in Southern California.

``This will help bring relief to San Diegans,'' said Senator Steve Peace, a Democrat from El Cajon, California. Peace crafted much of the state's 1996 deregulation law, and has urged customers of Sempra Energy's San Diego Gas & Electric to withhold payments on higher bills.

U.S. Energy Secretary Bill Richardson, California Governor Gray Davis and other politicians support a lower cap, saying consumers shouldn't be held responsible for a dysfunctional market. Power-plant operators and developers have opposed price caps, arguing they reduce market incentives to add needed generation. No new capacity is expected in California until 2002.

``This is not going to improve reliability and could lengthen the time for a real solution,'' said Alex Goldberg, a lawyer for the Williams Cos., which operates power plants in California. ``Reliability should be the main concern of the ISO, not prices.''

San Francisco-based PG&E, Rosemead-based Edison International and San Diego-based Sempra paid an average $62 a megawatt hour for electricity in the past year. A megawatt hour is enough to light 1,000 average U.S. homes for an hour.

PG&E shares rose 7/8 to 26 3/4 on the New York Stock Exchange. Edison International fell 1/16 to 19 5/8 and Sempra rose 5/16 to 19 1/16 in NYSE trading.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Gas% 20News&touch=1&T=energy_news_story.ht&s=AOYdBnRTuQ2FsaWZv

-- Martin Thompson (mthom1927@aol.com), August 01, 2000.