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Please see the following articles:
AP Wire services, Tues 3/20: "Calif. Officials Order Blackouts" Dow Jones News, Tues 3/20: "California Panel to Order Utilities to Make $1= =20 Billion in Back Payments" SF Chron, 3/20: "As Davis Seeks Money, Lawmakers Want Answers=20 Members of both parties angry at lack of dialogue" Fresno Bee, Tues 3/20: "Jones rips state on energy crisis " Sac Bee, Wed., 3/21: "Day 2 -- Battling blackouts: Payment plan sought to= =20 restart small plants" Sac Bee, Wed., 3/21: "Hospitals take hit, seek power guarantee" Sac Bee, Wed., 3/21: "Lodi still won't pull the plug" San Diego Union, Tues., 3/20: "Blackouts hit for second day; break seen=20 Wednesday" San Diego Union, Tues., 3/20: "State power regulators working on energy=20 rescue"=20 San Diego Union, Tues., 3/20: "Federal regulators scored for not ordering= =20 more California refunds" LA Times, Wed., 3/21: "Second Day of Blackouts Disrupts 500,000 Home and= =20 Businesses" LA Times, Wed., 3/21: "Fragile Supply Network Apt to Fail" LA Times, Wed., 3/21: "Elevator Anxiety is Riding High" LA Times, Wed., 3/21: "State says it's accelerating plan to buy Power=20 Utilities' Grid" LA Times, Wed., 3/21: "L.A., Long Beach File Suits Over Gas Companies'=20 Prices " LA Times, Wed., 3/21: "Davis OKs Subsidy of Pollution Fees" LA Times, Wed., 3/21: "As Losses Mount, Companies work around outages" LA Times, Wed., 3/21: Commentary: "A Blackout on Answers" LA Times, Wed., 3/21: Commentary: "Rolling Blackouts: Blatant Extortion" SF Chron, Wed., 3/21: "Utilities' Demand Blocks Bailout=20 NEGOTIATIONS HIT SNAG: PG&E, Edison want end to price freeze if they sell= =20 transmission lines to state" SF Chron, Wed., 3/21: "Utilities' Demand Blocks Bailout=20 BLACKOUTS ROLL ON: Weather, increased consumption blamed" SF Chron, Wed., 3/21: "Manners Go Out the Window=20 Pedestrians in peril as drivers turn darkened S.F. streets into free-for-al= l" SF Chron, Tues., 3/20: "Historic Blackouts in State=20 Bay Area learns to cope" SF Chron., Tues., 3/20: "Second day of rolling blackouts in power-starved= =20 California" Mercury News., Wed., 3/21: "Bay Area Residents Learning to roll with=20 Blackouts" Orange County, Wed., 3/21: "Powerless, Again" Orange County, Wed., 3/21: "The iceman shunneth effects of hourlong blacko= ut" Orange County, Wed., 3/21: "Traffic officials are seeing red over blackout= s" Orange County, Wed., 3/21: "Alternative power producers cut back or shut= =20 down as payments from big utilities lag" Orange County, Wed., 3/21: "O.C. saves its energy -- for blaming others" Orange County, Wed., 3/21: "Blackout readiness on agenda" Dow Jones Energy News, Wed., 3/21: "Calif To Order Utils To Pay Small=20 Generators Up Front-Gov" Dow Jones Energy News., Wed., 3/21: "PG&E Says It Is Negotiating With=20 Qualifying Facilities" Energy Insight, Wed., 3/21: "New York at the Crossroads" ---------------------------------------------------------------------------= --- -------------------------------------------------------------- Calif. Officials Order Blackouts=20 By PAUL CHAVEZ, Associated Press Writer=20 LOS ANGELES (AP) - State power managers ordered rolling blackouts across=20 California for a second straight day Tuesday as demand for electricity agai= n=20 exceeded supply.=20 The same factors that collided to strap California's power supply on Monday= =20 hit again, officials with the Independent System Operator said. Those inclu= de=20 reduced electricity imports from the Pacific Northwest, numerous power plan= ts=20 offline for repairs and higher-than-expected demand because of warm=20 temperatures.=20 A two-unit Southern California plant that the ISO hoped would be working=20 Tuesday had not been fixed. One of its units might go online at noon to hel= p=20 the situation, the ISO's Jim Detmers said.=20 In addition, hydroelectric power imports from the Northwest were 800=20 megawatts lower than Monday, he said. The ISO oversees most of the state's= =20 power grid.=20 ---------------------------------------------------------------------------= --- --------------------------------------------------------------------------- California Panel to Order Utilities to Make $1 Billion in Back Payments By Jason Leopold 03/20/2001 Dow Jones Business News (Copyright © 2001, Dow Jones & Company, Inc.) Dow Jones Newswires=20 LOS ANGELES -- The California Public Utilities Commission will order Edison= =20 International's Southern California Edison and PG&E Corp.'s Pacific Gas &= =20 Electric unit to pay small power generators that are qualified utilities=20 about $1 billion in past-due payments in order to keep the plant owners fro= m=20 dragging the utilities into an involuntary bankruptcy proceedings, and to= =20 also ensure the generation units keep pumping out electricity, people=20 familiar with the matter told Dow Jones Newswires late Monday. Gov. Gray Davis, state Sen. Debra Bowen, and Assemblymembers Fred Keeley an= d=20 Robert Hertzberg, all Democrats, spent most of the day y trying to hammer o= ut=20 an agreement with the so-called qualifying facilities, alternative power=20 producers that use the wind, sun, steam and biomass to generate electricity= =20 for the state, on supply contracts and past payments the utilities failed t= o=20 make.=20 The qualifying facilities, which represent about one-third of the state's= =20 total power supply and signed contracts to sell power directly to the=20 utilities under a government mandate, would then agree to sign power-supply= =20 contracts with the utilities for a period of five to 10 years for about $79= a=20 megawatt hour for the first five years and about $61 a megawatt hour=20 thereafter, two sources involved in the negotiations said.=20 The PUC is expected to issue a draft resolution on the issue sometime this= =20 week, one source said.=20 The lawmakers wouldn't comment on the details of their talks Monday.=20 Representatives with SoCal Ed (EIX) and PG&E (PCG) said they were unaware= =20 Gov. Davis and his administration were meeting on the issue.=20 The utilities are more than $13 billion in debt and have failed to make=20 payments on their qualifying-facilities contracts since November. PG&E has= =20 paid some of its qualified facilities just a fraction of what they are owed= .=20 Legislation To Restructure QF Rates Stalls In Senate Energy Committee=20 Mr. Keeley had recently drafted legislation, along with state Sen. Jim=20 Battin, a Republican from Palm Desert, that would have restructured the rat= es=20 the qualified facilities charge the utilities, from $170 a megawatt hour to= =20 $80 a megawatt hour for five years.=20 The bill, SB47X, stalled in the Senate Energy Committee, of which Ms. Bowen= =20 chairs. SoCal Ed opposed the legislation, saying the rates were still too= =20 high. A utility spokesman said the qualified-facilities rates should be=20 reduced to under $50 a megawatt hour.=20 But the lawmakers and the governor is trying to avoid the need for=20 legislation, largely because there isn't much support in both houses for su= ch=20 a bill and the chance that it won't be passed in time to keep the qualified= =20 facilities from dragging the utilities into involuntary bankruptcy=20 proceedings, the legislative source said.=20 The PUC will take over the issue from the Legislature, the source said.=20 Monday, about 3,000 megawatts of qualified-facilities generation went offli= ne=20 because the companies that operate the power plants can no longer afford to= =20 buy natural gas used to fuel the plants due to the utilities' failure to pa= y=20 money owed to the companies, said Jim Detmers, vice president of operations= =20 for the state's Independent System Operator.=20 The outages triggered a major shortfall in the state which resulted in near= ly=20 eight hours of statewide rolling blackouts Monday.=20 Many owners of the qualified-facilities said without immediate relief, they= =20 would likely force SoCal Ed, and possibly PG&E, into involuntary bankruptcy= ,=20 perhaps as soon as Thursday.=20 One such facility, CalEnergyOperating Co., wants to be freed temporarily fr= om=20 its contract with the utility and be allowed to sell its electricity to thi= rd=20 parties until the utility is able to pay its bills. CalEnergy is an affilia= te=20 of MidAmerican Energy Holdings Co., which is majority owned by Warren=20 Buffet's Berkshire Hathaway Inc. (BRKA).=20 The company sued SoCal Ed last month, and the case is scheduled to be heard= =20 Thursday in Imperial County Superior Court. If a judge delivers an=20 unfavorable ruling, CalEnergy and other unsecured creditors would drag SoCa= l=20 Ed into involuntary bankruptcy, three executives with the companies involve= d=20 said.=20 CalEnergy is said to be organizing a bankruptcy petition now circulating=20 among six of Southern California Edison's independent power suppliers and= =20 could file the petition very quickly if it fails in its suit Thursday, said= =20 executives with three of the six companies.=20 Write to Jason Leopold at jason.leopold@dowjones.com=20 Copyright © 2001 Dow Jones & Company, Inc.=20 All Rights Reserved ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- -------------------------------------------------------------------------- As Davis Seeks Money, Lawmakers Want Answers=20 Members of both parties angry at lack of dialogue=20 Lynda Gledhill, Greg Lucas, Chronicle Sacramento Bureau Tuesday, March 20, 2001=20 ,2001 San Francisco Chronicle=20 Sacramento -- The Legislature has warned it may block further state purchas= es=20 of electricity as lawmakers' frustration with Gov. Gray Davis' handling of= =20 the energy crisis increases.=20 A test may come soon because Davis asked yesterday for another $500 million= =20 to continue buying power.=20 Sen. Steve Peace, D-El Cajon, chairman of the Joint Legislative Budget=20 Committee, wrote to Davis' Finance Department on Friday that the committee= =20 might deny further spending requests "in the absence any discernable=20 progress" from the Public Utilities Commission to ensure that the state wou= ld=20 get its money back.=20 Members of the committee, both Republican and Democratic, said they support= ed=20 Peace's call for more oversight of the spending, given the lack of=20 information from Davis on details of the state's power purchases.=20 "He's been holding things close to the chest, and that bothers me," said Se= n.=20 John Vasconcellos, D-Santa Clara. "I want to know a lot more."=20 Sen. Dick Ackerman, R-Fullerton, said the administration "has been=20 stonewalling us about how much is being spent, and how much power we're=20 getting for it. When the state is spending that kind of money, at a minimum= ,=20 legislators should know for what."=20 The state had spent $2.6 billion on electricity through March 11. Davis'=20 request for more money would put the state at the $3 billion mark by the=20 middle of April. The state is spending an average of $49 million a day.=20 The money is supposed to be paid back through the rates collected from=20 utilities' customers. It is up to the PUC to decide how to divide that mone= y=20 among the state, the utilities and the utilities' debtors. The commission i= s=20 scheduled to take up the issue at its March 27 meeting.=20 The problem is that there appear to be more demands on the money than there= =20 is money to go around.=20 The utilities have said they need the money to pay off some of their=20 creditors. Among those looking for cash are alternative-power generators th= at=20 were selling electricity to Pacific Gas and Electric Co. and Southern=20 California Edison. Half of them have shut down because they have not been= =20 paid.=20 Earlier this month, the PUC granted the Department of Water Resources, whic= h=20 has been purchasing electricity for the state, the power to recoup its full= =20 costs through rates.=20 It's unclear whether that can be accomplished without raising electricity= =20 prices, though Davis has insisted he can solve the crisis without boosting= =20 rates.=20 Lawmakers said they approved the bill that allowed the state to buy power i= n=20 the belief such purchases would be a stopgap until the Davis administration= =20 could sign long-term contracts with power suppliers. However, only about 19= =20 contracts have been signed to date, out of 42 agreements. If all the=20 contracts are signed, they will account for about 70 percent of the power= =20 California is expected to need.=20 "It was our expectation some of these contracts would kick in," said=20 Assemblywoman Carole Migden, D-San Francisco. "This was designed to only be= =20 bridge money to avert a power disaster. We should hold firm and come up wit= h=20 a plan.=20 "I recall about three weeks ago when we first asked about one of these $500= =20 million letters," Migden said. "We said maybe this one is necessary, but=20 there won't be carte blanche approval of any future requests. I'm pleased= =20 Sen. Peace is taking that approach."=20 To Assemblyman George Runner, R-Lancaster, Peace's letter was "another way= =20 for the Legislature to send a message we need to be in this loop. We're jus= t=20 getting a small little dribble of information, which just creates more=20 questions."=20 A spokesman for the Department of Finance said officials hoped to work with= =20 the committee members about their concerns.=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- -------------------------------------------------------------- Jones rips state on energy crisis=20 Secretary of state hints that he'll take on Davis in 2002.=20 By John Ellis=20 The Fresno Bee (Published March 20, 2001)=20 Officially, he's Bill Jones, secretary of state for California. Unofficiall= y,=20 he's Bill Jones, 2002 gubernatorial candidate.=20 The evidence is right there between the lines -- in the subtleties of his= =20 speeches, their subject matter, and the way Jones carries himself when he's= =20 in public.=20 Monday was no different, as Jones addressed a Rotary Club luncheon in Fresn= o=20 full of people who are assuming -- though nothing is official -- that the= =20 Fresno native will soon announce his intention to challenge Gov. Davis next= =20 year.=20 "Bill, they call me governor," Chas Looney, a former Rotary Club district= =20 governor, quipped to Jones. "I look forward to the day we all can call you= =20 governor."=20 Jones then proceeded to deliver a speech to a packed house in the DoubleTre= e=20 Hotel that touched on his accomplishments as secretary of state, but quickl= y=20 moved to his main topic: California's crumbling infrastructure and how the= =20 energy crisis is affecting the state.=20 Always in the background but never mentioned by name was Davis. Jones was= =20 careful to hew to the Rotary rule that speeches steer clear of partisan=20 politics.=20 Still, Jones looked, sounded and acted like a candidate for governor, and= =20 near the end of his speech he promised his decision would come soon.=20 The Fresno Republican's speech began by highlighting his work in passing th= e=20 "Three Strikes and You're Out" initiative in 1994.=20 Jones also talked of his efforts to remove 2 million inactive California=20 voters from the rolls.=20 But it was clearly the energy crisis and its ramifications -- an issue=20 Republicans feel they can pin on Davis and the Democratic-controlled=20 Legislature -- that was the centerpiece of the speech.=20 Today, the energy crisis is being driven, he said, by a lack of power plant= =20 construction. And while billions go to solve the crisis, he said, the state= =20 faces $100 billion in unmet infrastructure needs -- everything from school= =20 repair to road repair.=20 "Doesn't that scare you?" Jones asked.=20 He then recounted the warning signs -- ignored by the state, he said -- of= =20 the looming energy crisis.=20 He cited the initial warnings that the deregulation bill was flawed, last= =20 summer's request by Edison and Pacific Gas & Electric to allow forward=20 contracting and the Republican request for a special session to deal with t= he=20 energy crisis. All ignored, Jones said.=20 Now, Edison and PG&E are near bankruptcy and the state finds itself steppin= g=20 up as a creditor. "And the solution now becomes California getting into the= =20 energy business," he said. "Or, even carrying it to a greater degree, not= =20 just in the short term to buy power to keep the lights on. I'm talking abou= t=20 basically socializing the energy business."=20 Jones said he prefers low-interest loans to Edison and PG&E, taking the=20 electric grid as collateral.=20 "I just do not believe in California getting into something it does not kno= w=20 how to do -- has never done before -- on top of all of our other=20 obligations," he said.=20 "It really worries me that California will not be able to endure that type = of=20 obligation."=20 Jones said polls now show increasing numbers of residents saying the state = is=20 headed in the wrong direction.=20 "I feel obligated to speak out and say there is a better way," Jones said. ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- -------------------------------------------------------------------------- Day 2 -- Battling blackouts: Payment plan sought to restart small plants By Dale Kasler and Carrie Peyton Bee Staff Writers (Published March 21, 2001)=20 Blackouts rolled across California for a second straight day Tuesday,=20 snarling traffic, darkening businesses and sending state officials scrambli= ng=20 to craft a payment plan to revive the wind farms and other critically neede= d=20 small energy producers that have shut down because of financial woes.=20 On a day when another 570,000 customers lost power, Gov. Gray Davis said th= e=20 Public Utilities Commission and the Legislature would move promptly to orde= r=20 Pacific Gas and Electric Co. and Southern California Edison to start paying= =20 those small energy producers for their electricity. Davis said the two=20 utilities will face "considerable fines" if they don't pay up.=20 But several of the producers, known as "qualifying facilities," said they= =20 doubted Davis' plan would go far enough to get them back in operation. And = it=20 wasn't clear whether the plan would keep the increasingly impatient=20 alternative producers from hauling one or both of the big utilities into=20 bankruptcy court, as some have threatened.=20 The shortage of power from the qualifying facilities -- plus a near-record= =20 heat wave (downtown Sacramento topped off at 83 degrees, one degree short o= f=20 the 84 degree record set in 1960), a lack of hydropower and other problems = --=20 prompted the state's Independent System Operator to order a second day of= =20 blackouts starting mid-morning. But the blackouts hit only about half as ma= ny=20 Californians as Monday's, with late afternoon conservation efforts helping= =20 balance supply with demand.=20 The blackouts, usually about an hour long, hit about 7,600 Sacramento=20 Municipal Utility District customers in Elk Grove and south Sacramento=20 County. PG&E customers in suburban counties were affected as well.=20 The order darkened shops in San Francisco's Chinatown and was blamed for a= =20 crash that left two motorists seriously injured in the Los Angeles suburb o= f=20 South El Monte. A Sun Microsystems Inc. factory in Newark had to close for= =20 several hours.=20 Most Californians took the blackouts in stride, though. Elk Grove High Scho= ol=20 students filed outside to play hacky sack. Coffee shop patrons in Davis=20 milled outdoors, enjoying the unseasonably warm weather.=20 Yet the blackout order was met with outright defiance by one municipal=20 utility. The city of Lodi refused to cut power to its residents Monday or= =20 Tuesday, saying it shouldn't have to suffer because of the financial crisis= =20 afflicting PG&E and Edison.=20 The outlook for today and the near future was brighter, as several big powe= r=20 plants came back on line after repairs. ISO officials also praised=20 Californians' conservation efforts, which had faltered in the morning but= =20 came on strong in the afternoon, helping to prevent further blackouts. By= =20 evening the grid was in a relatively mild Stage 2 power alert.=20 But the second day of blackouts -- plus an increasing threat of utility=20 bankruptcy -- pushed Davis to the brink. The governor cobbled together a=20 payment plan to rescue the qualifying facilities -- some 600 wind farms,=20 geothermal plants and other alternative-energy generators whose production= =20 has become increasingly vital in recent days.=20 Under Davis' plan, the Legislature and the PUC would order PG&E and Edison = to=20 pay the qualifying facilities for power delivered after April 1. The=20 utilities are required to buy power from the qualifying facilities under a= =20 1978 federal law designed to bring cheaper and cleaner forms of electricity= =20 to market.=20 Davis said the PUC would release a proposed order late Tuesday that would= =20 require the utilities to pay the qualifying facilities $79 a megawatt hour= =20 for five-year contracts or $69 for 10-year contracts. The Legislature also= =20 would have to pass a law authorizing the PUC to issue such an order.=20 But the situation was far from resolved late Tuesday, and PG&E and Edison= =20 were likely to oppose at least portions of Davis' plan.=20 Edison is willing only to make "some kind of partial payments going forward= ,"=20 said Thomas Higgins, a senior vice president with parent company Edison=20 International. "We have a limited amount of resources available to us in=20 rates, ... and that's the constraining factor."=20 PG&E, which has been making partial payments to the qualifying facilities,= =20 said it could pay them in advance, in full, for future power deliveries.=20 But PG&E said such payments would eat up half the $400 million it has=20 available each month to buy power -- and unless it gets a rate hike, there= =20 wouldn't be enough to pay the qualifying facilities and cover other expense= s,=20 including the cost of reimbursing the state Department of Water Resources f= or=20 the power the agency is buying on behalf of the troubled utility.=20 PG&E's proposal could represent a challenge of sorts to state officials:=20 Accept less money for the water department, or raise rates.=20 State officials "need to resolve who they want to see paid," PG&E spokesman= =20 John Nelson said. "There is a limited pool of money."=20 For his part, Davis insisted that the water department would be first in li= ne=20 to be paid, and he said the PUC will issue a proposed order to that effect.= =20 "We are getting paid before anybody else," Davis said.=20 Hundreds of qualifying facilities are out of commission because PG&E and=20 Edison haven't paid them. The situation has robbed the state of several=20 thousand badly needed megawatts and is a key reason blackouts have been=20 ordered. In normal times the facilities produce more than 20 percent of=20 California's electricity.=20 Some of the qualifying facilities have been threatening to haul one or both= =20 of California's beleaguered utilities into bankruptcy court unless they get= =20 paid soon, saying a bankruptcy filing might be the only way they can save= =20 their businesses.=20 "You've got to take care of the QF problem or the whole thing blacks out,"= =20 said Jerry Bloom, a lawyer representing one group of qualifying facilities.= =20 "(State officials) are starting to understand."=20 One thing that was fairly certain about Davis' still-sketchy payment plan: = It=20 wouldn't cover PG&E and Edison's existing debt to the qualifying facilities= ,=20 estimated at more than $1.48 billion.=20 In their current financial state, the utilities say they can't afford to pa= y=20 the existing debt. In addition, paying the debt would create a major=20 complication: Other creditors, including the big power generators, would=20 surely haul Edison and PG&E into bankruptcy court on the grounds that they= =20 weren't being treated fairly.=20 "You can't give preferential payment treatment to one class of creditors ov= er=20 another," PG&E's Nelson said. "You virtually assure that (the other=20 creditors) have to file an involuntary bankruptcy proceeding against you."= =20 But without full payment, it wasn't clear how many of the qualifying=20 facilities would be able to restart.=20 Executives at several plants -- the ones that run on natural gas -- said=20 they're not sure their gas suppliers will deliver unless the existing debts= =20 are cleared up.=20 "We need to convince a gas company to supply us," said Ed Tomeo of UAE Ener= gy=20 Operations Corp., which had to shut off its 40-megawatt Kern County plant= =20 Tuesday. "We're a company that already owes millions of dollars for gas=20 supplies. How do you coax them to sell you millions more?"=20 "It's wishful thinking ... that the gas suppliers are going to sell us gas,= "=20 Robert Swanson of Ridgewood Power said.=20 I<Bee Capitol Bureau Chief Amy Chance and staff writers Stuart Leavenworth,= =20 Bill Lindelof, Pamela Martineau and the Associated Press contributed to thi= s=20 report. ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- -------------------------------------------------------------------------- Lodi still won't pull the plug By Carrie Peyton Bee Staff Writer=20 (Published March 21, 2001) In a growing rebellion against blackouts, the city of Lodi has twice refuse= d=20 to cut power to its residents despite an order from Pacific Gas and Electri= c=20 Co.=20 The small city-run electric system is among many disgruntled utilities,=20 including the Sacramento Municipal Utility District, that believe their=20 contractual pledges to cut back during emergencies were never meant for tim= es=20 like this.=20 "It's been a philosophical debate up to this point. Now I guess we've drawn= a=20 line in the sand," said Lodi utility director Alan Vallow.=20 PG&E said it is reviewing its interconnection contract, the agreement that= =20 links Lodi to the grid through PG&E-owned high-voltage lines, to determine= =20 what action it will take next.=20 "It's unfortunate that while the city of Lodi has received the benefit of= =20 this agreement for years, they are unwilling to bear the burden of this=20 statewide energy shortage," said PG&E's Jon Tremayne.=20 One utility coalition, the Northern California Power Agency, believes that= =20 PG&E has already violated that agreement by not lining up enough power for= =20 customers.=20 The agency wrote PG&E on Friday saying that its members -- municipal=20 utilities and irrigation districts -- believe they aren't required to=20 participate in blackouts prompted by financial disputes.=20 And SMUD, which has been considering dropping out of future blackouts, will= =20 be watching the response to Lodi, said SMUD board President Larry Carr.=20 Some SMUD directors say they're ready to go to court to force the issue. So= =20 is Lodi, population 58,000, said Vallow.=20 "I've heard an Edison executive describe this as a natural disaster akin to= =20 an earthquake. That's crap. This is a man-made event," he said.=20 Lodi said it will still help in genuine emergencies, such as fires or toppl= ed=20 transmission lines. But it decided that on Monday and Tuesday that wasn't t= he=20 case.=20 "You have 3,000 megawatts of QFs (qualifying facilities) offline because=20 their bills haven't been paid. Well, guess what? Somebody ought to pay thos= e=20 ... bills," Vallow said. ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ----------------------------------- Blackouts hit for second day; break seen Wednesday=20 By Audrey Cooper ASSOCIATED PRESS=20 March 20, 2001=20 SACRAMENTO =01) Rolling blackouts hit California for a second straight day= =20 Tuesday, closing souvenir shops in San Francisco's Chinatown, snarling=20 traffic and plunging schools and offices around the state into darkness.=20 Roughly a half-million homes and businesses from San Diego to the Oregon=20 border faced outages, blamed on the same factors that collided to force=20 blackouts Monday =01) unseasonably warm weather, reduced electricity import= s=20 from the Pacific Northwest, numerous power plants offline for repairs and= =20 less power provided by cash-strapped alternative-energy plants.=20 Five rounds of outages in San Diego affected about 74,000 customers. State= =20 power grid officials expected to have enough electricity to avoid further= =20 outages through at least Wednesday, although the supply remained tight.=20 State power regulators working on energy rescue=20 Federal regulators scored for not ordering more California refunds=20 ?=20 Gov. Gray Davis blamed the blackouts in part on the failure of Southern=20 California Edison and Pacific Gas and Electric Co. to pay millions of dolla= rs=20 they owe "qualifying facilities," power suppliers that use cogeneration =01= )=20 steam from manufacturing plus natural gas =01) or solar, wind and other=20 renewable energy to generate electricity.=20 State power grid officials say California this week has lost about half the= =20 electricity QFs normally provide. Several cogeneration plants say they=20 haven't been paid by Edison and PG&E for weeks and can't afford to buy=20 natural gas to fuel their plants.=20 Davis said the utilities are taking in money from customers but still faili= ng=20 to pay the QFs. The state has been spending about $45 million a day since= =20 January to buy power for customers of Edison and PG&E, which are so=20 credit-poor that suppliers refuse to sell to them.=20 "It's wrong and irresponsible of the utilities to pocket this money and not= =20 pay the generators," Davis said at a Capitol news conference Tuesday evenin= g.=20 "They've acted irresponsibly and immorally and it has to stop."=20 Southern California Edison officials said in a written statement that the= =20 utility is intent on paying creditors and working with the PUC to pay QFs f= or=20 future power sales. PG&E representatives were out of the office late Tuesda= y=20 night and didn't immediately return calls from The Associated Press seeking= =20 comment.=20 John Harrison of the Northwest Power Planning Council, a consortium that=20 monitors power use in several Western states, said blackouts on the first d= ay=20 of spring are an ominous sign of what lies ahead this summer.=20 "We're in trouble," he said. "We will likely be able to meet our needs this= =20 summer, but there won't be much to send to California."=20 Tuesday's outages began at 9:30 a.m. PST and continued in 90-minute waves= =20 until about 2 p.m., when the Independent System Operator lifted its blackou= t=20 order.=20 Grid officials credited an influx of power from the Glen Canyon hydroelectr= ic=20 plant on the Utah-Arizona border.=20 The blackouts were blamed for at least one serious traffic accident.=20 Two cars collided at an intersection without traffic lights in the Los=20 Angeles suburb of South El Monte, leaving two people with serious injuries,= =20 California Highway Patrol Officer Nick Vite said.=20 Ventura Foods in Industry sent its employees out for an early lunch after= =20 blackouts shut down its phones and computers.=20 "This is mild weather for this time of year. I don't know what's going to= =20 happen in the summer," manager Frank Hynes said. "This is going to have a= =20 serious impact on the state's economy. They can't just keep shutting people= =20 down."=20 Statewide, demand was higher than expected because of warm spring weather.= =20 Temperatures reached record highs across California on Monday, including th= e=20 80s and low 90s in Southern California. They were expected to be somewhat= =20 lower Tuesday but still in the 70s and 80s.=20 The ISO hoped demand would start to subside and conservation would kick in,= =20 but that did not happen Tuesday morning.=20 "We have not seen the kind of conservation we saw back in January," when th= e=20 first blackouts hit, ISO spokesman Patrick Dorinson said. "If we don't have= =20 conservation efforts, that just means that's more power we have to take off= =20 the grid."=20 In San Francisco's Chinatown, souvenir shops normally bustling with visitor= s=20 were forced to shut down. Nearby, irritated customers waited for a bank to= =20 reopen.=20 "It's no good for anybody =01) stores or businesses or people," said Yin Su= n=20 Chan, among those in line.=20 PG&E, the state's largest utility, accounted for most of the customers=20 affected.=20 At least 438,000 PG&E residential and business customers were affected as o= f=20 early afternoon, spokesman Ron Low said.=20 Edison cut power to about 50,000 customers. Edison was ordered to cut less= =20 power than PG&E and saved some due to conservation programs, including one= =20 that lets the utility shut off air conditioning for 118,500 residential and= =20 business customers when the power supply is tight.=20 About 73,400 San Diego Gas & Electric customers were hit by the blackouts.= =20 Los Angeles, whose municipal utility is not on the grid that serves most of= =20 California, wasn't included in the blackout order.=20 More than 1 million homes and businesses statewide experienced outages=20 Monday.=20 California's power crisis is expected to get even worse this summer, when= =20 temperatures soar and residents crank their air conditioning.=20 Natural gas supplies are tight, water supplies are down and the state is=20 spending tens of millions of dollars each day to buy electricity for Edison= =20 and PG&E, who say they are nearly bankrupt due to high wholesale power cost= s.=20 Edison and PG&E say they have lost more than $13 billion since last June to= =20 climbing wholesale electricity prices the state's 1996 deregulation law=20 prevents them from recouping from ratepayers.=20 Adding to the problems, the state this week lost about 3,100 megawatts from= =20 QFs. One megawatt is enough power to serve about 750 households.=20 The plants say they are owed about $1 billion for past sales to PG&E and=20 Edison.=20 PG&E said it is offering to prepay the QFs starting next month to get them= =20 back in operation. Negotiations were expected to continue Wednesday.=20 California Co-Generation Council attorney Jerry Bloom said he supports=20 proposals that will get the Qfs paid, but the promise of future payments ma= y=20 not be enough.=20 PG&E and Bloom said the utility's prepayments hinge on an upcoming Public= =20 Utilities Commission decision on whether the utility's rates are sufficient= =20 to pay its bills and cover the state's power purchases on its behalf, which= =20 amount to $4.2 billion since early January.=20 Davis said the PUC planned to issue a draft order late Tuesday directing th= e=20 utilities to pay their future QF bills.=20 It plans to take action on that order next Tuesday, Davis said. The=20 Legislature plans to approve a bill in the meantime giving the PUC the=20 authority to issue such an order and fine the utilities if they fail to=20 comply, he said.=20 Davis said he is confident the utilities and the state can pay their bills= =20 without further rate increases for Edison and PG&E customers.=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ----------------------------------- State power regulators working on energy rescue=20 By Karen Gaudette ASSOCIATED PRESS=20 March 20, 2001=20 SAN FRANCISCO =01) State power regulators continue to delay the release of= =20 guidelines that will determine a portion of the money the Department of Wat= er=20 Resources can recoup from financially troubled utilities for electricity it= =20 has bought on their customers' behalf.=20 These guidelines will help the water department determine whether it must= =20 raise consumer power rates to reimburse the state for the more than $3=20 billion it has committed to buying electricity.=20 Assemblyman Fred Keeley, D-Boulder Creek, said Tuesday that the Public=20 Utilities Commission would likely have to raise rates by 15 percent to cove= r=20 the state's costs and the utilities' bills.=20 The PUC guidelines were most recently delayed by a letter from DWR Director= =20 Thomas Hannigan asking that the water department receive a percentage of=20 ratepayer money collected by the utilities equal to the percentage of=20 electricity it provides to utilities.=20 The DWR currently buys around 40 percent of the power used by Pacific Gas a= nd=20 Electric Co., Southern California Edison Co. and San Diego Gas and Electric= .=20 Under the DWR's proposal the utilities would have to hand over 40 percent o= f=20 the money they continue to collect from ratepayers.=20 The DWR would then also receive whatever money remains after the utilities= =20 subtract their own generation and long-term contract costs, the letter said= .=20 That amount would become the "California Procurement Adjustment" =01) an am= ount=20 that will help the state retrieve money spent on power purchases and help= =20 establish the size of state revenue bonds that are currently estimated to= =20 total $10 billion.=20 The state plans to issue the bonds in May to help pay off the more than $3= =20 billion Gov. Gray Davis' administration has committed to power purchases=20 since January to help the utilities climb out of debt.=20 Ron Low, a spokesman with PG&E, said the utility objects to paying the DWR= =20 such a large sum, claiming it would interfere with efforts to pay its=20 "qualifying facilities" =01) power plants that use the sun, wind, biomass o= r=20 natural gas to generate about one third of the state's electricity.=20 The nearly bankrupt utilities owe the QFs more than $1 billion for=20 electricity they have produced since November, said Jan Smutney-Jones,=20 executive director of the Independent Energy Producers.=20 Hannigan also said in the letter the DWR intends to use its authority to=20 raise consumer electricity rates to recoup any money not reimbursed through= =20 the CPA and other means.=20 The Public Utilities Commission expected to release the guidelines last wee= k,=20 but was delayed by debates over legislation that would slash the rates of= =20 environmentally friendly power plants under contract to provide electricity= =20 to the investor-owned utilities.=20 Without knowing how much ratepayer money the utilities need to pay these=20 "qualifying facilities" for future electricity, it's unknown how much money= =20 they'll have on hand to pay the DWR.=20 In a written statement, PUC Administrative Law Judge Joseph DeUlloa said th= at=20 he would issue a temporary decision on the CPA "as soon as is practical."= =20 Pacific Gas and Electric Co. and Southern California Edison Co. say they ha= ve=20 lost more than $13 billion since last June to climbing wholesale electricit= y=20 prices that the state's 1996 deregulation law prevents them from recouping= =20 from ratepayers.=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ----------------------------------- Federal regulators scored for not ordering more California refunds=20 By H. Josef Hebert ASSOCIATED PRESS=20 March 20, 2001=20 WASHINGTON =01) House Democrats asked federal energy regulators Tuesday why= they=20 are not going more aggressively after alleged overcharges for wholesale=20 electricity in California and ordering more refunds.=20 The Federal Energy Regulatory Commission has asked suppliers to justify $12= 4=20 million in sales during the first two months of the year or refund the mone= y,=20 but critics charge that thousands of additional questionable sales are not= =20 being challenged.=20 The three commissioners testifying at a hearing of the House Commerce=20 subcommittee on energy, were asked why they limited their refund demands to= =20 only power sales that occurred during so-called Stage 3 alerts of acute pow= er=20 shortages in California.=20 "It appears to me a price is unreasonable when it is unreasonable," and not= =20 just during a power alert, said Rep. Rick Boucher of Virginia, the panels'= =20 ranking Democrat.=20 The commission last week ordered six power generators to justify some 1,000= =20 transactions during February in the California market whenever the price wa= s=20 above $430 per megawatt hour and occurred during a Stage 3 emergency alert.= =20 But the lawmakers were told Tuesday that 56 percent of another 14,168=20 transactions, occurring outside a Stage 3 emergency, also exceeded the $430= =20 trigger, but are not being questioned.=20 "The line was drawn to limit the scope of the refund," said agency=20 commissioner William Massey, a Democrat, who strongly opposed the refund=20 actions because he said they were too limited.=20 Chairman Curtis Hebert, a Republican, defended the way the commission decid= e=20 on what transactions to challenge saying that it sought to replicate market= =20 conditions as they existed at the time of the sales.=20 "We deserve a better explanation," retorted Boucher.=20 Massey said that agency's investigation of overcharges for January also=20 failed to consider thousands of transactions that exceeded the refund trigg= er=20 because they did not occur during Stage 3 supply emergencies.=20 Managers of California's electricity grid, state regulators and utilities= =20 have accused the agency of refusing to aggressively investigate price gougi= ng=20 by wholesalers who have charged from $150 to $565 per megawatt hour, as muc= h=20 as 20 times what prices were in 1999.=20 While Hebert and commissioner Linda Breathitt defended the commissioners=20 attempt to investigate whole electricity prices, Massey has been highly=20 critical.=20 What message does the agency's scrutiny of prices send to the power=20 companies? he was asked.=20 "It makes clear FERC is going to be looking for the wallet under the lamp= =20 post with the lights shining =01) and nowhere else," replied Massey.=20 Meanwhile, Massey and his two fellow commissioners, also disagreed sharply = on=20 whether the energy agency should impose temporary price controls on the=20 wholesale power market in the West to dampen further expected price increas= es=20 this summer.=20 Massey said he fears "a disasters in the making" if some price restraints a= re=20 not imposed by FERC, which regulates wholesale electricity sales. "We need = a=20 temporary time out," he said.=20 But Massey is in the minority on the commission. Both Hebert and Breathitt= =20 are against price caps, arguing they will have long-term detrimental impact= =20 on power supply.=20 The Bush administration has made its opposition to interfering in the=20 wholesale markets well known for weeks. Vice President Dick Cheney's task= =20 force is to unveil an energy plan in about a month that is expected to lean= =20 heavily on energy production.=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ----------------------------------- Second Day of Blackouts Disrupts 500,000 Homes and Businesses=20 Power: Grid operators say the shortage should ease in the next few days, bu= t=20 officials see a grim summer.=20 By MITCHELL LANDSBERG and ERIC BAILEY, Times Staff Writers=20 A traffic signal that stopped working during Tuesday's rolling blackouts le= d=20 to this collision be tween a car and a truck at an intersection in El Monte= .=20 The outages ran from 9:30 a.m. to 2 p.m. AP ?????Electricity blackouts rolled through California for a second straight= =20 day Tuesday, disrupting business in one of the world's most technologically= =20 advanced economies and leaving schoolchildren groping in the dark. ?????Jinxed by a combination of bad luck and bad decisions, utilities were= =20 forced to cut off power to more than half a million homes and businesses fr= om=20 San Diego to the Oregon border. ?????By day's end, there was some good news from the operators of the=20 statewide power grid, who said the situation had eased and appeared likely = to=20 improve for the next few days. And Gov. Gray Davis announced a proposed=20 solution to one vexing problem: the utilities' failure to pay the state's= =20 small, alternative power generators, many of whom have stopped producing=20 power as a result. ?????Davis called the utilities "shameful" for failing to pay, and praised= =20 the alternative power generators, which include solar, wind and geothermal= =20 energy producers, as "good corporate citizens" who produced power although= =20 they weren't being paid. ?????"We are anxious to pay the [small producers], who are dropping like=20 flies," Davis said. ?????Despite the progress, it was hard for some people to look on the brigh= t=20 side after enduring outages that took place when the state's hunger for pow= er=20 was almost 50% less than at its summer peak. ?????"This is a taste, almost like an appetizer, of a really unpalatable me= al=20 that's going to be served up this summer," said Michael Shames of the Utili= ty=20 Consumers' Action Network in San Diego, himself a victim of a rolling=20 blackout that hit his office in San Diego early Tuesday. ?????Power officials have warned that this could be a grim summer in=20 California, since demand for electricity sharply rises when people turn on= =20 air conditioners. The state has been struggling to meet its power needs in= =20 recent months because of rising prices and a flawed deregulation plan that= =20 has left the two biggest private utilities on the brink of bankruptcy. Stat= e=20 leaders have so far failed to agree on a comprehensive plan to solve the=20 problems. Wally Quirk teaches a business class in a borrowed classroom Tuesday at=20 Sonoma State after the state's rolling blackouts cut the power to his usual= =20 classroom, which does not have any windows. SCOTT MANCHESTER / The Press Democrat ?????The latest round of blackouts began about 9:30 a.m. Tuesday when the= =20 California Independent System Operator, which runs the statewide grid,=20 determined that the demand for electricity was 500 megawatts more than the= =20 supply--an imbalance that meant the state was short on the power needed to= =20 supply electricity to about 375,000 homes. ?????Grid operators blamed a confluence of events, including warmer weather= ;=20 outages at several major power plants, including one unit of the San Onofre= =20 nuclear power station; a reduction in imports from the Pacific Northwest, a= nd=20 the shutdown of many alternative energy producers. Similar blackouts Monday= =20 were the first since January. ?????The situation improved somewhat by late Tuesday morning, with some=20 supplies restored and Californians conserving energy, and Cal-ISO was able = to=20 halt the rolling blackouts at 2 p.m. ?????Once again, customers of the Los Angeles Department of Water and Power= =20 were spared, although the municipally owned utility said its electrical=20 surplus was smaller than usual. The DWP, like Southern California Edison, w= as=20 affected by an outage at the huge Mohave power plant in Nevada, as well as = by=20 planned outages at several of its facilities. ?????As in the past, by far the biggest impact was felt by customers served= =20 by Pacific Gas & Electric, the state's largest utility, which cut power to= =20 438,000 homes and businesses. ?????Edison cut power to 47,462 customers in about 40 cities, but eventuall= y=20 was able to avoid blackouts by shutting off the air conditioners of some of= =20 the 118,500 customers who participate in a voluntary cutoff program. ?????San Diego Gas & Electric cut power to 73,400 customers. ?????Innovative Ways of Coping ?????As on Monday, most people took the outages in stride, as an annoying b= ut=20 ultimately unavoidable inconvenience. ?????In Palmdale, four schools lost power during one of the hourlong=20 blackouts, but teachers and students pressed on in the sunlight pouring=20 through windows and skylights. At Barrel Springs Elementary, Principal Cruz= =20 Earls said the biggest problem came when students had to go to the bathroom= :=20 Hand in hand, they made their way through darkened hallways with flashlight= s. ?????All in all, it wasn't a terrible experience. Then again, the weather= =20 wasn't that hot Tuesday, with a high of 79 in Palmdale, so the shutdown of= =20 air conditioners wasn't much of a hardship. "I don't want to think about th= e=20 conditions this could create in May or June," Earls said. ?????Businesses of all kinds complained about the lack of warning for the= =20 outages--and sometimes found innovative ways to get around the problem. ?????Rattled by news reports of Monday's rolling blackouts, El Burrito=20 Mexican Food Products in the city of Industry started its Tuesday shift at = 2=20 a.m. to beat the clock in the event of an outage. That hunch paid off.=20 Workers had just finished cooking and packaging the last batches of salsa a= nd=20 masa when the lights went out at 10:20 a.m. ?????Company owner Mark Roth said the firm will continue working odd hours = to=20 avoid further outages. But he isn't buying the line from the utilities that= =20 they can't provide advance warning because of concerns about looting and=20 rioting. ?????"We're ready to do whatever it takes to get through this thing," he=20 said. "But they've got to give us some notification." ?????At Big O Tires in Elk Grove, just south of Sacramento, owner Daniel Cr= um=20 had his 14 workers take an early lunch break or head to the warehouse to=20 reorganize the goods. Without electricity, they couldn't repair brakes or= =20 align front ends. ?????"I'd never let them be idle," said Crum. ?????At least two minor traffic accidents were blamed on the outages. ?????The blackouts resulted from a convergence of factors. ?????Demand was slightly higher than expected, probably because of=20 unseasonably warm weather. Supplies were tighter than usual, in part becaus= e=20 of several outages, including that at the Mohave plant, half of which was= =20 brought back on line by the end of the day. ?????The San Onofre Nuclear Generating Station was still limping along=20 without power from one of its two 1,100-megawatt units, which was shut down= =20 Feb. 3 after a half-hour fire in a nonnuclear part of the plant. Edison,=20 which operates San Onofre, initially estimated the unit would be out for=20 several weeks but recently said "extensive damage" to parts of the turbine= =20 will keep the unit out of commission until mid-June. ?????Shipments from the drought-stricken Pacific Northwest, which generates= =20 most of its electricity from large dams, were also down. ?????"Each time we take a measurement, we're closer to the all-time record= =20 for the driest year," said Dulcy Mahar, spokeswoman for the Bonneville Powe= r=20 Administration, the network of federal dams that provides the region with= =20 much of its electricity. "We've been doing what we can, but we simply don't= =20 have power to sell." ?????Finally, there was the problem of the small and alternative energy=20 producers, which have shut down plants because they haven't been paid by th= e=20 private utilities since November. Those outages have cost the state about= =20 3,000 megawatts of electricity, enough for about 2.3 million homes. ?????"You're seeing the system freeze up," said David Sokol, chairman and C= EO=20 of MidAmerican Energy Holdings Co., which runs eight geothermal plants in t= he=20 Imperial Valley through its subsidiary, CalEnergy. His company hasn't shut= =20 down yet, but Sokol said smaller companies couldn't continue to sell their= =20 energy to utilities for free. ?????"Why should we fund Edison?" he asked. "That's just ridiculous." ?????A Choice of 2 Rate Plans ?????Davis joined lawmakers in the Capitol on Tuesday to outline his plan t= o=20 get the producers running again. He said utilities have had no right to=20 collect money from ratepayers and then not use the funds to repay the small= =20 producers. The state has spent billions to buy power from large conventiona= l=20 producers on behalf of the utilities but has refused to pick up the tab for= =20 alternative energy. ?????"The utilities acted in a shameful manner by putting money in their=20 pockets that was designed to pay the [small producers]," Davis said. ?????The plan outlined by Davis would allow the generators to choose betwee= n=20 two rate plans. They could decide to be paid 7.9 cents per kilowatt-hour ov= er=20 five years or 6.9 cents a kilowatt-hour over 10 years. ?????The utilities must begin paying the generators the new rates beginning= =20 April 1 or face fines, Davis said. ?????The question of how the companies will get paid the about $1.5 billion= =20 they are owed remains unresolved. That issue will be decided in coming week= s=20 as Davis' negotiators continue to work on rescue plans for the state's=20 financially hobbled private utilities. ?????PG&E spokesman Ron Low said the state's largest utility did not take= =20 kindly to Davis' criticism, and noted that the governor's plan is similar t= o=20 a proposal that PG&E made last week to producers. ?????Jan Smutny-Jones, executive director of a trade group that includes so= me=20 of the small generators, described the plan as a positive step. ?????"The governor got it right in that it's not acceptable for small power= =20 producers to continue to generate and not be paid," Smutny-Jones said. "But= =20 we'll need to see what the order says; the devil will truly be in the=20 details." ?????Grid operators said the state's overall energy situation eased by midd= ay=20 Tuesday because of repairs at the Mohave plant and another large plant at= =20 Ormond Beach, and because the Western Area Power Administration came up wit= h=20 300 megawatts of electricity from Glen Canyon Dam. ?????Also, grid spokesman Patrick Dorinson said conservation savings spiked= =20 upward after earlier complaints that Californians weren't conserving. ?????"We saw the people of California probably conserve 900 megawatts today= ,"=20 he said. "That was probably the difference." ---=20 ?????Times staff writers Andrew Blankstein, Jose Cardenas, Marla Dickerson,= =20 Noaki Schwartz, Nicholas Riccardi, Doug Smith, Rebecca Trounson and Richard= =20 Winton in Los Angeles, Miguel Bustillo and Julie Tamaki in Sacramento, Mari= a=20 La Ganga in San Francisco, Stanley Allison, Matt Ebnet, Scott Martelle,=20 Dennis McLellan, Monte Morin, Jason Song, Mai Tran and Nancy Wride in Orang= e=20 County, and Richard Simon in Washington contributed to this story. ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ----------------------------------- Fragile Supply Network Apt to Fail=20 By JENIFER WARREN and ERIC BAILEY, Times Staff Writers=20 ?????A lot of people were caught off guard by the blackouts that swept over= =20 California this week. Debra Bowen wasn't one of them. ?????As chairwoman of the state Senate Energy Committee, she is=20 intimately--and painfully--familiar with the state's energy supply. And she= =20 is willing to share a secret: It's a fragile system, capable of collapse at= =20 any time. ?????That knowledge keeps Bowen awake at night, particularly with the=20 approach of summer, when power demand surges as Californians get reacquaint= ed=20 with their air conditioners. ?????"I sound a bit less like Chicken Little today, don't I?" Bowen said=20 Tuesday, as chunks of the state once again were forcibly darkened. "I know = a=20 lot of people don't feel we have a problem. But we have a very, very big=20 problem." ?????With the recent slowdown in Stage 3 emergencies, a sense of calm had= =20 settled over the energy debate, and even some legislators were speaking wit= h=20 guarded optimism about the hot months ahead. ?????On Tuesday, however, a creeping sense of doom was almost palpable amon= g=20 energy watchers, and previous supply forecasts--which predict that the stat= e=20 may yet escape summer blackouts--were being given a second look. ?????"The outages of the last two days are something that Californians are= =20 going to have to get used to for July and August," said Michael Zenker,=20 California director of Cambridge Energy Research Associates. The=20 Massachusetts consulting firm is predicting about 20 hours of blackouts thi= s=20 summer. ?????At the California Independent System Operator, which manages 75% of th= e=20 statewide power grid, officials said the energy cushion the state had in=20 recent weeks was, in some ways, a phantom caused by heavy imports of power. ?????Cal-ISO spokesman Patrick Dorinson said people may have been deluded= =20 into a false state of comfort: "Maybe there is a tendency to think things= =20 have improved," he said. In fact, they haven't. ?????More than anything, this week's events illustrate the delicate balance= =20 of factors that keep California illuminated, from the multitude of supply= =20 sources to the weather. ?????Temperatures were higher than usual. Alternative-energy suppliers--who= =20 haven't been paid in months by the cash-strapped utilities--cut their outpu= t.=20 Suppliers in the Northwest--which faces a drought--slashed exports. Equipme= nt=20 breakdowns and maintenance at power plants--much of it unanticipated--took= =20 13,000 megawatts offline. A utility-run program that gives businesses=20 discounts in exchange for cutting power during emergencies is all but dead. ?????"The fragility of the system is such that a small perturbation can tur= n=20 everything upside down very easily," said Gary Ackerman, executive director= =20 of the Western Power Trading Forum, a group of electricity generators and= =20 traders. ?????One factor receiving particular attention is the dip in supply caused = by=20 unscheduled maintenance. To help officials predict available supply,=20 generators provide an annual maintenance plan that is updated regularly. ?????In addition, however, facilities sometimes shut down for unexpected=20 reasons: leaking tubes, burnt-out transformers, cracked turbines and faulty= =20 feed pumps. At one point Tuesday, about 8,200 megawatts were unavailable=20 because of unscheduled shutdowns. That's enough to supply about 6 million= =20 households, and up from 5,700 megawatts a week ago. ?????The huge 1,400-megawatt Mohave power plant near Laughlin, Nev., which= =20 supplies Southern California Edison and the Los Angeles Department of Water= =20 and Power, was felled Monday by a transformer problem. That was enough to= =20 push the state into blackouts. ?????A growing number of skeptics, however, question whether those reasons= =20 are always valid, accusing generators of withholding power to shrink supply= =20 and drive up prices. ?????"There's no way to verify it, so you've got to take their word for it,= "=20 said Frank Wolak, a Stanford University economist who studies California's= =20 electricity market. "And given that it's very profitable for these things t= o=20 occur, you start to wonder if they're creating an artificial scarcity." ?????Tom Williams of Duke Energy said the Houston-based company is working= =20 hard to keep its California power plants, which are capable of producing=20 3,351 megawatts of electricity, in operation after months of near-continuou= s=20 operation. ?????"It's like riding a moped across the country," he said. "They're just= =20 not meant to run this hard." ?????Last week, the state Senate formed a committee to investigate charges = of=20 market manipulation by power suppliers. The chairman, state Sen. Joe Dunn= =20 (D-Santa Ana), says the issue of unscheduled plant shutdowns is on his agen= da. ?????"The problem is: How does one prove that a particular outage was part = of=20 a deliberate strategy to deprive the state of kilowatts, rather than a resu= lt=20 of normal business operations?" Dunn said. ---=20 ?????Times staff writer Nancy Rivera Brooks contributed to this story. ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ----------------------------------- Elevator Anxiety Is Riding High=20 Emergencies: Workers in skyscrapers worry about blackouts trapping them in= =20 their buildings. Some take the risk in stride; others make plans to take th= e=20 stairs.=20 By JOHN M. GLIONNA and JOE MOZINGO, Times Staff Writers=20 ?????SAN FRANCISCO--In Susan Clifton's highly placed opinion, sunny Tuesday= =20 would have been a picture-perfect day to work atop one of the tallest=20 buildings in San Francisco, a scenic city littered with soaring skyscrapers= . ?????But Clifton--like many other high-rise office dwellers in blackout-pro= ne=20 parts of California--couldn't help but feel some high anxiety at the prospe= ct=20 of being stranded by electrical outages that were sweeping across the state= =20 for a second day. ?????"I think about it all the time," said Clifton, a 21-year-old=20 receptionist at Deutsche Bank's offices on the 48th floor of a tower in the= =20 city's financial district who recently moved from rural Virginia. "The way = I=20 see it, Californians take a lot of things on faith, working atop tall=20 buildings with all these earthquakes and power outages." ?????For Long Beach office worker Dave Suhada, the anxiety has taken the fo= rm=20 of elevator phobia: a fear of getting stuck on an 80-degree day crammed in = a=20 pod of sweating, heavy-breathing humans, with no way out. ?????"I'm just eyeing the buttons to see which one I could push as fast as = I=20 can if the power goes out," he said.=20 ?????For 20-year-old Lisa Riley, it means entering the elevator each day in= =20 her Long Beach office building with a prayer. "I just could not get stuck f= or=20 an hour and a half," she said, nodding nervously. Often she now opts for th= e=20 stairs. ?????In San Francisco, emergency services officials say that most of the=20 city's office buildings are equipped with backup generators to run elevator= s=20 and security equipment in the event of a blackout. ?????Fire Department spokesman Pete House said the city has 19 trucks with= =20 experts trained to extricate people trapped in elevators. Firefighters=20 handling blackout-related emergencies rescued a person trapped in a downtow= n=20 building Tuesday and handled five elevator mishaps Monday. ?????Christopher Stafford didn't get caught inside an elevator Monday, but= =20 suffered the next-worst thing: being stranded in his 15th-floor apartment= =20 after the power failed when he went home for lunch. ?????So the 41-year-old real estate worker trooped down the stairs to the= =20 lobby and even made some new friends along the way, helping a few elderly= =20 women who were struggling down the stairs. ?????"It was a pain," he acknowledged. "But I have to tell you: I really li= ke=20 my panoramic view, so it's worth the hassle." ?????Nowadays, Sherrie Tellier makes sure her cellular phone is in hand whe= n=20 she gets i
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