California Pleads for Emergency Power Imports

Wednesday, December 13, 2000

By Leonard Anderson

SAN FRANCISCO (Reuters) - California power officials warned on Wednesday that growing concerns over whether California can pay for its electricity imports have cut those imports to the point where blackouts, perhaps as early as Wednesday afternoon, might be unavoidable.

Officials at the California Independent System Operator (ISO), which manages about 75 percent of the state electricity system, told a news teleconference they were prepared to declare a Stage Three power emergency -- the highest level -- later Wednesday, opening the possibility of rolling blackouts throughout the state to avoid overloading the grid.

California, in its 10th consecutive day of power emergencies, is struggling to keep the lights on as the needs of a growing population and strong economy threaten to overwhelm supplies.

No major power plants have been built in California for the past 10 years.

Kellan Fluckinger, the ISO's chief operating officer, called California's latest power crisis an "extremely dynamic situation" that was fluctuating hourly. He said there was better than a 50 percent likelihood that blackouts could begin as early as 1:30 p.m. PST.

Several key power traders in the Western U.S. and Canada have said they can no longer accept the high risks linked to selling power to the real-time California market, citing recent spot power prices briefly topping $3,000 per megawatt hour, nearly 100 times what they were fetching a year ago.

ISO officials said they are spending $50-$100 million a day to buy power for sale in turn to the state's electric utilities.

Fluckinger said "a dozen significant market participants" in the Northwest "have indicated no further willingness to sell megawatts to the ISO and utilities" because of credit concerns.

He declined to identify the market groups.

The ISO official said rotating blackouts would interrupt the flow of 1,000 megawatts (MW) of electricity at a time, enough power for about a million homes.

This number could increase to 3,000 to 4,000 MW during the peak evening demand hours -- 5:00 p.m. to 7:00 p.m. PST -- if California could not get imports from neighboring states.

The state's utilities would implement the blackouts, turning off circuits for up to an hour at a time to reduce the strain on the entire power grid.

Statewide blackouts would be a first for California. Last June 14, Pacific Gas and Electric Co. briefly turned off neighborhoods in the San Francisco Bay Area during a power emergency. The company is a unit of PG&E Corp. .

Last week, the ISO declared a brief Stage Three emergency but did not have to order blackouts after more imports were received from other states.

Fluckinger also said California was hurt today by the absence of 3,300 megawatts of power generated by independent natural gas-fired co-generation plants around the state.

He said these facilities are not generating power because the cost of natural gas needed to run them is too high.

Gas prices at the southern California border have skyrocketed recently amid a severe supply crunch, trading at $18.50 per million British thermal units (mmBtu) Wednesday, down from recent highs but still about eight times their $2.30 price a year ago.

The ISO appealed to California Gov. Gray Davis, the Federal Energy Regulatory Commission (FERC) and a number of state agencies for short- and long-term assistance to secure more supplies.

http://news.lycos.com/headlines/TopNews/article.asp?docid=RTNEWS-UTILITIES-CALIFORNIA-DC&date=20001213

-- Martin Thompson (mthom1927@aol.com), December 13, 2000