Rolling power blackouts hit California By Rachel Konrad Staff Writer, CNET News.com January 17, 2001, 1:00 p.m. PT

URL: http://news.cnet.com/news/0-1007-200-4510657.html

update California regulators ordered rolling blackouts Wednesday, blaming utility company debts and a tight national power supply that has snuffed out lights throughout Northern California.

The California Independent System Operator (ISO) confirmed that rolling blackouts--the first in the current statewide energy crisis--started at about 11:40 a.m. The scattered outages are expected to last for an hour to 90 minutes.

The first rotation of blackouts affected 500 megawats of electricity in Northern California. The blackouts have hit about 200,000 customers from Bakersfield, Calif., to the Oregon border, said Jon Tremayne, spokesman for Pacific Gas & Electric (PG&E).

"They're scattered throughout our entire service area... and we literally have circuits throughout the entire area that are impacted," Tremayne said.

He wouldn't say which Silicon Valley technology companies were in the dark, but he added: "Corporations are considered our customers as well."

ISO will host a news conference at 1 p.m. PST with more details, said spokesperson Stephanie McCorckle.

Early television reports show many neighborhoods of San Francisco without power, including the historic Haight-Ashbury area. Tourist shops near the popular Fisherman's Wharf area in San Francisco were also in the dark.

The outage came as power providers held back supply from the state's two largest utility companies, PG&E and Southern California Edison, which are teetering on the edge of bankruptcy. Both companies have said they will go out of business unless they are able to dramatically increase the price consumers pay or unless providers radically cut the cost of energy.

Edison International and its Southern California Edison subsidiary defaulted Tuesday on $596 million loan owed to creditors, raising the stakes in a showdown between regulators, utilities and power generating companies in California. The crisis: who will pay the mushrooming energy bill for California--the nation's most populous state and home to many of the world's largest technology companies.

Executives at Silicon Valley technology companies say they aren't scared that an energy crisis will dent profits. That's because some of the largest tech companies rely on power suppliers other than PG&E and Southern California Edison, such as the Sacramento Municipal Utility District and Silicon Valley Power.

Other companies, such as Oracle, have spent millions to build back-up generators to power massive computer servers in case of a blackout.

E-commerce companies that rely on smoothly functioning Web sites, often powered by servers and workers in the San Francisco Bay Area, lose anywhere from $1 million per hour to $1 million per minute when the power goes off. That's because customers can't place orders online, and the region's highly paid workforce can't be productive.

Although it was not caused by a blackout, a November blowout at Seattle-based e-tailer Amazon.com showed how costly even a brief outage is.

During the Thanksgiving holiday weekend, Amazon suffered a series of outages. Investment firm Thomas Weisel Partners estimated that one 20-minute outage deleted roughly 20,000 product orders and $500,000 in revenue.

The financial situation seems even more dire for Southern California Edison, which serves 11 million people and announced this week that it will run out of cash Feb. 2. PG&E, which serves 14 million people, had just $500 million in cash left as of Jan. 10 and faces bills of $1 billion due next month.

The Southern California Edison default prompted Standard & Poor's to downgrade the credit ratings of Southern California Edison and PG&E to junk-bond status. PG&E and SoCal Edison have lost $12 billion in the past several months.

"We are trying to manage the picture here today, but we've come to the end of the road here as far as supply within California and out-of-state resources go," said Jim Detmers, ISO's managing director of operations.

California has struggled for months with the effects of deregulating its electricity market. A rate freeze has banned utility companies from passing on higher wholesale costs to their customers.

-- Martin Thompson (mthom1927@aol.com), January 17, 2001

Answers

January 17, 2001 California Orders Blackouts as Power Crisis Escalates By THE ASSOCIATED PRESS SACRAMENTO, Calif. -- Pushed over the brink by its botched experiment with deregulation, California began imposing rolling blackouts Wednesday for the first time, ordering utilities to turn off the power to hundreds of thousands of people.

Automated teller machines in downtown San Francisco shut down immediately and at least two students were trapped in an elevator that stopped between floors at the Hastings School of Law. Traffic lights went black in several San Francisco Bay communities.

Utilities were trying to avoid cutting power to blocks with essential services such as hospitals.

The blackouts were ordered shortly before noon for areas of northern and central California. Those affected included 200,000 to 500,000 Pacific Gas and Electric Co. customers in the San Francisco area, plus thousands more in Sacramento, Modesto and Turlock.

Despite several close calls in recent weeks, it was the first time the Independent System Operator, keeper of the state's power grid, had failed to scrounge enough electricity at the last minute to avoid outages.

Jim Detmers, the ISO's managing director of operations, said out-of- state power suppliers were not selling badly needed electricity to California because of concern that the state's two largest utilities were on the verge of bankruptcy.

"We are trying to manage the picture here today, but we've come to the end of the road here as far as supply within California and out- of-state resources go," Detmers said.

Detmers said the ISO was too busy trying to supply power to find out whether suppliers were ignoring a federal order to sell to California.

California has struggled for months with the effects of deregulating its electricity market. A rate freeze has blocked utilities from passing on higher wholesale costs to their customers.

Compounding the problems is a scarcity of electricity nationally and a lack of snow and rain in the hydroelectric-dependent Pacific Northwest, Detmers said. He also said several power plants that were expected to return to full operation Wednesday after repairs did not.

State lawmakers are scrambling to find a fix. The Assembly approved a plan Tuesday under which the state would buy electricity from wholesalers and sell it to struggling utilities at about one-fifth the going market rate. The measure now moves to the Senate.

The help cannot come too soon.

Southern California Edison, which serves 11 million people, said this week that it will run out of cash Feb. 2 and cannot pay $596 million in bills due now.

The default prompted Standard & Poor's to downgrade the credit ratings of SoCal Edison and the state's other large utility, Pacific Gas and Electric Co., to junk-bond status.

PG&E, which serves 14 million people, had just $500 million in cash left as of Jan. 10 and faces bills of $1 billion due next month.

Between them, PG&E and SoCal Edison have lost at least $10 billion.

Wholesale power prices have risen dramatically since June, in part of because of a hot summer and a cold winter. In 1999, they averaged perhaps 3.5 cents a kilowatt. Now they are running about 30 cents, or far higher.

Demand has remained high, supplies are strapped because no new plants have been built in the state in recent years and imports are tight because other states are fighting over the power.

In addition, spiraling prices for natural gas are forcing power plants to raise their prices. Most power plants are fired by natural gas.

On Tuesday, unusually high demand for natural gas led San Diego Gas and Electric to cut supplies to two plants, contributing to a Stage 3 alert.

Chttp://www.nytimes.com/aponline/business/AP-Power-Woes.html? printpage=yes

copyright 2001 The New York Times Company

-- Martin Thompson (mthom1927@aol.com), January 17, 2001.

http://www.contracostatimes.com/stories_sidebars/transport_20010117.ht m Posted at 1:12 p.m. PST Wednesday, January 17, 2001

Muni, BART not affected by rolling blackouts BAY CITY NEWS SERVICE ---------------------------------------------------------------------- ----------

Bay area public transportation officials report no problems with service due to the rolling blackouts ordered by state officials today.

Muni spokesman Alan Siegel says the San Francisco trains, light- rail vehicles and buses are moving as usual through the city this afternoon.

"We are able to maneuver around the power outages," he said.

The only problems might come from street signals that are out, forcing Muni drivers to use extra caution just as all other vehicle drivers should, Siegel said.

Traffic safety rules call for all drivers to treat intersections with non-working signals as a four-way stop.

BART officials report no problems either.

A BART dispatcher said that 50 trains are running on time throughout the system, which relies on a different power source negotiated separately from PG&E.

-- Martin Thompson (mthom1927@aol.com), January 17, 2001.

At the risk of sounding crass (mean).

Now, just maybe, when the ISO calls for conservation they may just get it.

Maybe every area should get a 15 min power outage to get point across. As mean as that sounds, it would be very effective.

-- (perry@ofuzzy1.com), January 17, 2001.