The utilities grid for power shortages which could be triggered by an "Artic Express" Sunday, November 19, 2000

By Gail Kinsey Hill of The Oregonian staff

In the heat of summer, California officials came within minutes of declaring a top-level emergency and directing electric utilities to darken portions of the state.

In the cold of winter, Northwest energy officials could confront similar agonizing decisions.

"The Northwest faces potentially severe power shortages this winter," warns Judi Johansen, former administrator of the federal Bonneville Power Administration and now an executive vice president with PacifiCorp, the utility giant.

The last-ditch rolling blackouts considered in California aren't likely to happen in the Northwest either. But other aggressive measures may have to be taken to meet the electricity needs of the region's homes and businesses. The Northwest faces its greatest threat of shortages in more than a decade, and anxiety is high.

The West's burgeoning demand for electricity, California's bungled deregulation plan and the Northwest's unpredictable weather lie behind the pressures that have come to a system with a tradition of abundant low-cost power.

If the Northwest experiences a period of unusually cold weather and energy use spikes, utilities will have a hard time providing enough electricity to heat and light all the region's homes and businesses. With winter fast upon them, utility executives and public officials are scrambling to finish a regionwide emergency plan, coax large industries into aggressive curtailment agreements, explain the possibilities of relaxed fish protection standards and secure promises for more power from California.

Even then, they will need a cooperative Mother Nature and a little Lady Luck to pull off a trouble-free cold season.

Scenario for a shortage The possibility of a serious energy shortage in the West has been building for years. Population growth and an economic expansion pushed demand up while generating capacity remained virtually flat.

Also, amid feelings of economic plenty, utilities, state agencies and consumers backed off conservation efforts.

The Northwest Power Planning Council, a four-state agency charged with balancing fish and wildlife protection with electricity production, concluded in a report released earlier this year that shortages threaten the region through 2003. Then additional generating plants, some already under construction, will come on line and ease the supply crunch.

By 2003, the region -- Oregon, Washington, Idaho and Montana -- stands close to a one-in-four chance of winter supply interruptions, an "unacceptably large" probability, the report finds.

This year, the probability isn't quite as great. Calculations from a task force charged with zeroing in on this winter's situation peg the probability of a shortfall at 6 percent to 14 percent.

"Under most circumstances we should be OK," said Dick Watson, the Northwest Power Planning Council's power generation expert. "But there's always the possibility of a combination of poor water, forced outages, cold weather. . . . There's no such thing as a perfectly reliable system."

The Northwest Power Pool, which coordinates power operations for utilities in the Northwest and Canada, also warns that emergencies could develop if cold weather, high demand and a drop in generation come together in what analysts have nicknamed the "Perfect Storm" scenario.

The Bonneville Power Administration, the marketer for power produced at federal dams in the Columbia-Snake River Basin, brings yet another influential voice to the chorus of warnings.

In a key planning document known as the "White Book," the BPA concludes that the region faces the greatest likelihood of a shortfall in January when households and businesses could use 4,279 megawatts more electricity than the region's power system can provide. That's enough to light up four cities the size of Portland.

The projections represent a worst-case scenario, BPA officials emphasize. They assume water levels are at historic lows. They take into account some imported power but ignore the region's extra transmission capabilities and the ability to buy additional power on the spot market.

Winter weather Electricity supply is less predictable in the Northwest than elsewhere because the region relies so heavily on hydro-generation and the dams in the Columbia-Snake River Basin.

The system gives the BPA and utilities plenty of flexibility. They can pour more water over the dams -- as long as salmon protection requirements aren't violated -- or shift generation around. But they also must adapt to whatever the weather brings.

If this winter follows normal weather patterns, ample supplies of water and snowpack will feed rivers, reservoirs and generating turbines, analysts conclude. Purchases from outside the region would fill any gap between demand and supply.

The trouble comes if a sustained cold, dry spell, or "Arctic Express," hits the region, shoving up demand and robbing dams of their watery fuel.

The last time Oregon felt a bone-chilling blast from the north was Dec. 20-22, 1998. Temperatures dropped 20 degrees below normal. Demand soared. But the cold eased before utilities faced any real prospect of dimming the lights.

Last week, the state experienced unusually cold weather, but temperatures were dropping, at most, 10 degrees below the norm, not the 20 degrees needed to define a cold snap.

State Climatologist George Taylor predicts a normal winter, but he's not ruling out the possibility of a cold snap.

"Arctic outbreaks are 'weather events,' and weather events are impossible to predict," Taylor said. "It might happen and it might not. That's about all we can say about it."

Utility officials say they're anxious about the months ahead but not alarmed. "Possibility of a shortage?" posited Marlene Huntsinger, head of power trading for Portland General Electric. "That's the norm of our business."

The norm, however, has become a high-stakes game. PGE owns enough generation to serve about half its customers. It buys the rest form wholesale suppliers. If it locks in long-term contracts for ample quantities of electricity, it risks paying for unneeded power. If it comes up short, it is forced to the spot market where power often sells at a premium.

Amid all the debate, industry experts pinpoint a solid solution to shortages and high prices.

"The short answer is, we need more generation," said PacifiCorp President Alan Richardson.

But utilities and independent developers have been reluctant to build more generation, in part because prices -- until now -- haven't been high enough to encourage investment. Also, states have taken different approaches to deregulation, and the hodgepodge of policies has scared off investors.

The California factor The Northwest's link to California became painfully clear this summer, when sizzling weather and regulatory restrictions forced wholesale electricity prices to skyrocket throughout the West. Similar scenarios played out across the country.

Several times, California barely averted "Stage 3" emergencies, called when electricity reserves fall to less than 1.5 percent. One time, the BPA sent the state the cushion it needed. Another time, a sudden rainstorm in San Diego cooled demand.

If the California Independent System Operator declares a Stage 3 emergency, it directs utilities to cut specified amounts of power. That means rolling blackouts.

Just as California relies on summer electricity from neighboring states, Northwest states have become increasingly dependent on imported power during the winter.

"We're not in this alone in the summertime, and you're not alone in the wintertime," said Patrick Dorinson, a spokesman for the California ISO, the agency that manages the state's transmission grid.

This winter, if the Northwest needs additional power, a major north-south transmission line can carry as much as 3,100 megawatts into the region at any given time, said Philip Mesa, who monitors the reliability of the power system for the BPA.

"That's the good news," he said. "The bad news is, is there going to be generation available from California to bring up?"

Historically, California has had power to export. But winter also is the time operators take generation off-line for maintenance. Given last summer's ramped up use, many facilities are in need of repairs.

In addition, more rigid emission standards for California generating plants become effective Jan. 1, further restricting operations and, possibly, exports.

Emergency plan Worries about potential shortages have prompted utilities, the BPA and state officials to develop an emergency plan. The plan sets down protocols and responses for Oregon, Washington, Idaho and Montana.

The plan is designed to avert any emergency before it develops.

"We're not doing it because we're in danger of an emergency situation," said Dulcy Mahar, BPA communications director and a member of the coordinating team. "We're doing it because it's prudent."

Mahar is also quick to distance the plan from California's use of Stage 1, 2 and 3 emergencies.

"Ours is set up to anticipate an emergency, not to wait until one happens and deal with it."

The plan, still in draft form, sets up a three-level warning system, with coordinated steps that can be taken either to provide additional power or to reduce consumption.

The plan would define the circumstances under which states could relax air quality standards or fish mitigation measures. And, as an emergency approached, it would direct utilities to activate agreements that cut power to large industrial customers in exchange for cash payments.

The plan, spearheaded by the Pacific Northwest Utilities Conference Committee and the Northwest Power Pool, includes governors, federal and state agencies, and utilities in the four Northwest states. Coordinators admit that completing a plan acceptable to everyone will be difficult but add that the threat of shortages should bring everyone together.

Coordinators and energy experts hope they never have to put the emergency plan into action.

"Who knows, it could be a mild winter," said Watson of the Northwest Power Planning Council. "It could start raining and not stop till next year. Then people will say we were just crying wolf."

You can reach Gail Kinsey Hill at 503-221-8590 or by e-mail at gailhill@news.oregonian.com

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-- Martin Thompson (mthom1927@aol.com), November 20, 2000