Power Grid: Antiquated system

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California readies for blackouts Heat wave, high-tech demands straining power grids -- and not just in one state By Fred Bayles USA TODAY Page 1A

Four days of triple digit temperatures have pushed California's utilities to the brink of an action once considered unthinkable: If the heat wave continues today, officials might have to pull the plug on sections of the state to keep the entire power grid from failing.

If instituted, rolling blackouts could hit everywhere. Air conditioners would rattle to a halt in the new housing developments from steamy San Bernardino, 60 miles east of Los Angeles, to the suburbs of Sacramento. Silicon Valley plants and offices would fall silent. Traffic lights would go dark.

That was nearly the case Tuesday. Officials declared a Stage Two emergency, a step just short of blackouts. Instead, under pre-arranged agreements with certain customers, power was cut to hundreds of office buildings, factories and even colleges. The action eliminated enough demand to keep electrical use just below record levels and keep the lights on.

Even if blackouts are avoided this week, the crisis marks the sixth time this year the state has run precariously low on power. In the past, it happened no more than once a year, if at all.

''Electrical demand has grown exponentially, and the system can only carry so much,'' says Patrick Dorinson, a spokesman for California Independent System Operator, which coordinates the state's electric distribution system.

This week's crisis follows rolling blackouts in the San Francisco area that cut power to 97,000 customers during a heat wave last month. And the problem is not confined to California. Last summer, electrical shortages or overtaxed systems forced blackouts in New York, Delaware and Arkansas.

The reason, utility experts say, is the electric industry's inability to keep pace with the nation's appetite for more electricity, which has been spurred by housing construction and the growth of the high-tech economy.

Reserve capacity, the safety margin of extra power available for emergencies such as heat waves or power plant shutdowns, is the lowest in more than three decades. Reserves are expected to shrink further in the next five years. At the same time, a growing reliance on electricity sent from one region to another is taxing transmission lines. Aging local systems, overwhelmed by new customers, are breaking down at an increasing rate.

''Things are much more fragile because we don't have the reserves,'' says Bill Brier, a vice president with the Edison Electric Institute, a trade organization in Washington, D.C., of privately owned utilities. ''As the system becomes tighter, the outages have the potential of getting worse.''

These troubles come at a time of change in the electric industry. Twenty-four states, hoping market forces will encourage new sources of cheaper electricity, are freeing utilities from government regulation. But the theory is untested, so the next few years could be challenging for electricity providers -- and their customers.

Last Friday, Energy Secretary Bill Richardson held his 11th and final regional hearing on the reliability of the nation's electric system. His message: Unless steps are taken soon, more people could find themselves in the dark.

Antiquated system

''We have a booming 21st-century economy running on an antiquated electric power system,'' Richardson said. ''With August here, my biggest nightmare is an extended heat wave in the Northeast and New England.''

Electricity supplies also are tight in the Southwest, the Northwest and sections of the Midwest. The rest of the country, including much of the South, the Plains and the Mountain states, is believed to have sufficient power for now. Nationally, electricity remains reliable with only a 1% failure rate, mostly due to storm-related damage.

Still, there are strong signals that the system is fraying:

* Demand for electricity is soaring. Sustained economic growth has brought new homes and new businesses, all using a myriad of electronic appliances and gadgets. That pushes electricity use to nearly twice that of earlier projections. California's electric consumption grows 1,000 megawatts a year -- enough to power 800,000 homes. Arizona's utilities warn that the 40% growth in demand over the past decade has left the state short of megawatts this summer. There are similar warnings in New York, Kansas and Indiana.

* Electric production is falling behind. In the 1980s, the nation's power grid generated up to 30% more electricity than needed. But a 20-year lag in power plant construction has dropped that cushion to 14%, just under the 15% of reserves that was the industry standard. By 2005, it could fall below 10% -- a level that now triggers automatic warnings of near brownout conditions.

* Long-distance transmission lines between regions are sagging under increased loads. Transmission lines move increasing amounts of wholesale power over long distances. In 1995, there were 25,000 transactions where electricity was sold from one region to another. Last year, the number hit 2 million. In a growing number of areas, the transmission lines are carrying all the power they can. Yet little is being done to upgrade old transmission lines or build more.

* Local distribution systems are also overtaxed. Cities are experiencing power outages as aging networks strain under demands of new buildings and businesses. Thousands of people were left without power July 6 in New York City and for 19 hours in 1999 after increased demand triggered a system failure. Detroit had similar problems in June. Sections of Chicago and its suburbs lost power on six occasions last summer.

* Electric conservation efforts have faded. When utilities were responsible for providing power within a state, they often avoided the cost of new power plants by cutting demand by offering consumer subsidies on more efficient appliances and construction materials. With deregulation, many utilities no longer bear the burden of assuring supplies. As a result, conservation programs have been cut 70% since 1995.

David Nemtzow, president of the Alliance to Save Energy, a non-profit group in Washington, D.C., says such programs cut power usage by 21,000 megawatts, the equivalent of 40 generating plants.

''What has been lost is a much cheaper, acceptable alternative,'' Nemtzow says.

The electric drought has its roots in the 1970s, when big, new coal-fired and nuclear generating plants had most of the nation awash in too much power. State regulatory panels punished the utilities for their overexuberance by barring them from passing costs of unused power to customers. Such economic risks offered little incentive to build generation facilities. ''We clearly overbuilt in the '60s and the '70s,'' says Brier of the Edison Institute. ''Then for the past 16 years, we've had the longest growth cycle in the nation's history.''

In 1990, the North American Electric Reliability Council estimated that demand for electricity would grow 1.8% annually. Instead, it rose an average of nearly 3% annually, gobbling up reserves.

The growth is due, in part, to the proliferation of computer and high-tech peripherals, from printers and servers to fax machines and wireless phones. Industry studies found that high-tech paraphernalia had a negligible effect on power usage as late as 1993. Today, it is estimated to account for 13% of all usage. By 2020, it is expected to reach 25%.

The reliance on computers presents other problems. Utilities reduce their loads in hot weather through ''interruptible service'' contracts. These contracts offer companies lower rates in exchange for the right to shut off their power in times of need. But today's tech companies need a steady power supply to survive. Even a temporary interruption means days of resetting sensitive equipment.

''The smallest bleep in power supplies can create havoc,'' says Michelle Montague-Bruno, a spokeswoman for the Silicon Valley Manufacturing Group.

Deregulation was supposed to end those bleeps. It is hoped the changing rules would encourage new businesses to build generating plants. These plants would sell power on the open market. As more of these independent plants came on line, electricity supplies would increase, and consumer prices would fall.

The industry estimates that about 30,000 megawatts of additional power could be on line by 2010 if plant constructions that have been announced take place.

However, few think that will happen. Some states still set consumer rates below the actual cost to generate electricity. This has scared some potential investors out of the business because they fear they might not recover their investment. Eugene Gorzelnik, a spokesman for the reliability council, says many announcements of plant constructions are just a testing of the waters. ''Lots of units are proposed, but not all will be built,'' he says. ''There always has been uncertainty, but deregulation increases the level of uncertainty.''

Power plants canceled

That uncertainty makes planning difficult. The power pool made up of Indiana, Ohio, Kentucky and West Virginia could wind up short of power by the end of the decade.

Nevertheless, plans for two facilities in Indiana totaling 1,400 megawatts were canceled this year, and construction was halted on a 130-megawatt plant in March.

Capline Corp's plans to build a much-needed 540-megawatt plant in San Jose were delayed at least a year after the city's mayor and neighborhood groups opposed the plan because they were worried about pollution and noise.

''There are always difficulties and delays when you're trying to build a new plant,'' says Bill Highlander, a spokesman for Capline, an electric-generating company. ''People think of them as big, old ugly plants.''

Many regions put off construction by importing power from other sections of the country. But with demand growing everywhere, there is less power to go around. California, which imports 19% of its power, was unable to find additional supplies this week as the sweltering Northwest and Southwest struggled to keep up with their own needs.

When there is power to spare, it is becoming harder to send over the antiquated interstate transmission system. The Phoenix area already suffers bottlenecks on sections of high-voltage power lines coming into the city. By 2002, the lines will be at capacity. ''We need more transmission lines and upgrades, but that's a tough sell to the public,'' Dorinson says.

Although Wisconsin has only four high-voltage lines connecting it to out-of-state power sources, there is opposition to a proposed 250-mile line from Duluth, Minn., to Wausau, Wis. ''Our concern is that we can't get people to build enough transmission to handle the load down the road,'' says Richard Bulman, the chief executive officer of the Mid-Continent Area Power Pool, a regional organization that coordinates electric distribution.

Increased power use is straining aging local distribution networks. Last summer's outages in downtown Chicago were blamed on overloaded cables. Sections of Detroit were dark for four days starting June 13 after two of three lines feeding power to the city failed.

Though he supports deregulation, Energy Secretary Richardson says much must done to ease its transition. His tour of the country was taken in support of a bill that would establish tax breaks for companies that build generating plants. The legislation, stalled in Congress, would give the North American Electric Reliability Council more authority to assure that utilities will have enough power.

Even with federal help, experts say, electricity customers are in for a bumpy ride. ''This is a problem that no one should be complacent about,'' Richardson says.


-- Martin Thompson (mthom1927@aol.com), August 02, 2000


What a testimony to poor leadership. Where have our visionary leaders gone?

-- Phillip Maley (maley@cnw.com), August 03, 2000.

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