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http://www.contracostatimes.com/news/stories_news/sjsummer_20010225.htm Published Sunday, February 25, 2001

Denial of power crisis worries state officials POWER CRISIS

Unlike in the drought in the early 1990s, Californians do not grasp the urgency of the situation and so are not as willing to conserve energy

By Paul Rogers SAN JOSE MERCURY NEWS

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If Californians who are enduring daily power alerts and costly utility bills think they have it rough now, they're in the dark.

That's the consensus of many energy experts who say that although the California power crisis might ease slightly in March and April, things are going to get worse this summer. Much worse.

Widespread blackouts, far more severe than anything to date, could be unavoidable when hot weather begins in four months, government and private energy analysts say.

"This is clearly serious. Nobody's blowing smoke here. There is a big potential shortage," said Bill Prindle, director of utilities programs at the Alliance to Save Energy, a nonprofit coalition of consumer groups, business and government in Washington, D.C.

The problem is simple: California faces a huge gap between the summer supply of electricity it can generate and expected demand.

State analysts have forecast an shortfall of at least 5,000 megawatts this summer, and maybe as much as 7,000, enough for 5 million to 7 million homes.

Unless that gap is closed, blackouts are a certainty. Like frantic townspeople piling up sandbags as a river rises, hundreds of Californians, from Gov. Gray Davis to college professors to radio talk show hosts, are scrambling for ways to head off disaster.

Some are touting new power generation, others conservation. But those efforts face daunting obstacles, not the least of which is public skepticism: Polls show more than half of the state doesn't think there is a crisis at all.

Unlike in the droughts of the early 1990s, when Californians eagerly reduced water use by 20 percent, many residents remain unconvinced that there is a serious power crisis.

A poll Feb. 18 by the Los Angeles Times found that 57 percent of Californians say they do not believe there is an actual shortage of electricity. That doubt could make it more difficult to achieve big conservation gains this summer.

"It's incredibly important that our conservation be taken seriously," said Winston Hickox, director of the California Environmental Protection Agency.

The state will face almost certain rolling blackouts for at least 20 hours in July and August during hot afternoons -- blackouts that will occur on about 10 days, assuming they last for two hours each day, according to a report released earlier this month by Cambridge Energy Research Associates, a research firm in Boston.

"If we have a hot summer, it will be many more hours," said Mike Zenker, California director of the firm. "If we have (abnormally) high levels of plant outages it will be worse."

If the blackouts become more severe, solutions could be drastic, said Zenker, including paying factories to close or ordering state workers to come in at 6 a.m. or earlier to keep them out of the office during peak afternoon periods.

"There is a very big gap to make up," said Claudia Chandler of the California Energy Commission. "I don't think the public has focused yet on how big it is."

Chandler is helping run campaigns to tell people, for example, that they can save $150 a year by unplugging second refrigerators. Other tips are on a state Web site, www.consumerenergycenter.org.

Chandler's effort is just one of many.

Davis has ordered streamlining construction of power plants. Lawmakers are rushing to pass conservation programs. Some scientists are calling for more creative solutions, such as painting thousands of rooftops white or paying the public not to use energy. Many economists say the best way to make up the summer shortfall is to lift price caps soon on Pacific Gas & Electric and Southern California Edison utility bills.

But for a public that already has seen rising natural gas prices double its bills this month, another steep jump would be politically unpopular.

"'I don't like price increases either," said Lynne Kiesling, an associate professor of economics at Northwestern University and director of economics at the Reason Public Policy Institute in Los Angeles. "But these are scarce resources and price signals will get people to conserve."

Why are things worse this year?

Electricity use in California typically increases by about 50 percent every year from winter to summer as people turn on air conditioners.

This year, competition from other Western states for electricity will be tight. The population in places such as Las Vegas and Phoenix also has grown, as has use of computers and other energy-guzzling devices.

Then there's the weather. Washington, Oregon and Idaho have had a dry winter, so large dams in the Pacific Northwest will be able to generate only about 75 percent of normal power to help California.

Meanwhile, the finances of the state's utilities are in question, making out-of-state companies reluctant to sell power or bring temporary plants to the state.

California also has had an unusually high number of power plants break down. The companies that own them, including Reliant, Duke and Enron, say they are old and have been run hard. Some consumer groups claim the companies have deliberately taken them offline to spike prices, but have not been able to prove it.

Davis hopes to close the summer gap two ways: by encouraging conservation and by building new power plants. But his plans are fraught with uncertainty.

He notes that his energy commission has approved nine large new power plants statewide, with a total of 6,200 megawatts. But only three will be finished by July 1, delivering about 1,200 megawatts. The rest won't be done until 2002.

The governor also has launched an aggressive campaign to bring in "peaker plants" -- basically big jet engines that generate roughly 50 megawatts of power each. He hopes to create 2,200 megawatts of power that way, mostly by locating the plants on military bases, oil refineries and other sites, including San Francisco International Airport. But peaker plants are in great demand nationwide, with waiting lists of as much as two years, and there is no guarantee Davis can find enough or win local approval to site them.

That has left Davis and other leaders with an inescapable conclusion. They must convince Californians to use less energy. And soon.

Three weeks ago, Davis asked Californians to cut power use by 10 percent this year, calling it "absolutely critical to get us through."

He has announced a $404 million conservation program. It includes $20 million for TV ads, $95 million in business incentives and $75 million to provide consumer rebates for energy efficient appliances. Also, on March 15, Davis has ordered police to begin fining, by as much as $1,000 a night, car dealers, shopping malls and other businesses that don't reduce power use after hours on signs and displays.

"The bottom line is that we cannot solve this problem on the supply side," said Severin Borenstein, a business professor and energy expert at UC Berkeley. "We've got to do more with conservation."

Already, Californians have made cuts of about 1,000 megawatts -- or 3 percent -- this winter. Borenstein advocates real-time pricing for big businesses, which would set prices higher during peak afternoon demand, and lower in other hours. The state Independent System Operator is working on such a proposal, due out soon.

Others note that Californians were more eager to conserve during the drought because the problem was easier to understand.

"Electricity is not a physical entity you can see like water. It is magic," said Prindle of the Alliance to Save Energy. "It has become so ubiquitous that people just expect it."

Some experts have offered particularly creative solutions. KGO Radio talk show host Bill Wattenburg, a nuclear physicist, is urging a statewide Marshall Plan of sorts to paint the roofs of large buildings white. He notes that a fellow scientist, Arthur Rosenfeld of Lawrence Berkeley National Laboratory, has found that a white roof can be as much as 90 degrees cooler than a black one, and can reduce air conditioning use by 40 percent.

Wattenburg also has advocated that customers get paid rebates by the state for reducing power use.

"People need a kick in the butt to do more," he said. "They need incentives. For every billion we have to pay for out of state generators, that is $1 billion lost to California. That money could be used to pay for conservation. And the money stays in state."

One state legislator, Sen. Don Perata, D-Oakland, plans to announce a bill Monday proposing a $1 billion rebate plan.

State Sen. Byron Sher, D-Palo Alto, also has a $1.2 billion conservation proposal. That bill, SB5X, would fund such programs as offering rebates for efficient refrigerators, insulating state buildings and weatherizing the homes of low-income people.

"This crisis is real," Sher said. "There's only two ways you can respond. One is to increase supply, the other is to reduce demand. We're trying to do both."

-- Martin Thompson (mthom1927@aol.com), February 27, 2001