California faces new power alert; lawmakers focus on plant shutdowns

JENNIFER COLEMAN, Associated Press Writer

Thursday, March 15, 2001, ©2001 Associated Press

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/03/15/state1408EST0177.DTL

(03-15) 12:45 PST SACRAMENTO, Calif. (AP) -- State grid officials imposed a power alert Thursday for the first time in more than a week as electricity imports from the Pacific Northwest dropped and California plants shut down for unexpected repairs.

The Stage 2 alert -- declared when reserves fall below 5 percent -- came as the California Independent System Operator lost about 1,600 megawatts. That's enough power for roughly 1.6 million households.

Much of the power was lost due to lower exports from the Bonneville Power Administration, which runs a federal dam system in the Pacific Northwest. The system is cutting back on its water releases to build reserves for the summer, spokesman Mike Hansen said.

``We did what we could for as long as we could,'' Hansen said.

In addition, 900 megawatts were lost due to unscheduled California power plant outages, ISO officials said. Officials in Washington and Oregon have warned that low water reserves threaten the availability of hydroelectric power in the region.

``This demonstrates how we're still operating on the edge here, and how critical these imports from the Northwest are,'' California ISO spokeswoman Stephanie McCorkle said.

The alert -- the first since March 5 -- was expected to remain until at least Thursday night. Despite the declaration, the ISO did not immediately require ``interruptible'' customers -- who get lower rates for turning off power when needed -- to shut down.

The power alert came as the Assembly took several steps to cope with California's energy crisis, passing bills that would regulate power plant outages and expand utility programs that cut rates for big power users who turn off electricity when needed.

A measure by Assemblywoman Carole Migden would give the overseer of the state power grid authority to coordinate plant outages to prevent too many from going offline for maintenance at any one time.

If a power plant seemed to have too many outages or was shut down for a suspicious length of time, the grid keeper, the Independent System Operator, could investigate and the state Electricity Oversight Board could order fines.

``We have suspected that in some instances these generators have shut down and this has not been in the public interest,'' said Migden, D-San Francisco, adding that she was not accusing anyone of wrongdoing. ``What we're trying to do is create an audit and accountability system.''

The bill largely puts into state law an executive order issued last month by Gov. Gray Davis and goes further by giving the Electricity Oversight Board the power to issue fines. The fines would be based on the cost of power the ISO had to buy as a result of a plant's shutdown.

Senate leader John Burton on Wednesday announced a Senate committee will investigate whether electricity wholesalers illegally withheld power to drive up prices.

He cited plant outages for scheduled and unscheduled maintenance that have contributed to the state's strapped power supply and forced the ISO to scramble for power at premium prices to fill gaps in the grid. Duke, Dynegy, Mirant and Reliant will be among major providers included in the Senate inquiry, said Committee Chairman Joe Dunn.

Jan Smutny-Jones, executive director of the Independent Energy Producers industry group, said wholesalers will cooperate, but warned that if it becomes a ``witch hunt'' it could discourage them from building plants in California. Wholesalers deny any wrongdoing.

A similar Assembly panel has been formed to look into natural gas prices. The probes could lead to action by the state attorney general. The Federal Regulatory Energy Commission on Wednesday ordered Williams Energy Marketing & Trading and AES Southland to show why they should not be forced to refund $10.8 million to California utilities for taking generating units in Long Beach and Huntington Beach offline last April and May.

That follows a FERC order last week directing wholesalers to give back $69 million in overcharges for California electricity. FERC, a strong supporter of deregulation, has given the companies until March 23 to appeal that decision.

The Assembly approved Migden's plant outage bill 57-5 and sent it to the Senate. The Assembly also sent the Senate two measures on investor-owned utilities' interruptible-service programs, which give nonresidential utility customers discounted rates if they agree to shut down during periods of tight power supplies. Both votes were 67-0.

The programs are considered key tools for avoiding rolling blackouts this summer, when air conditioning and other power use is expected to further strap the state's electricity supply.

The Assembly approved a bill by Assemblyman Rod Wright, D-Los Angeles, that would extend the programs until the end of 2002 and require investor-owned utilities to offer customers more ways to participate.

It also passed a measure by Assemblywoman Lynn Daucher, R-Brea, that would let those in such programs for at least a year that have been barred by the state Public Utilities Commission from getting out of them opt out without penalty.

Southern California Edison and Pacific Gas and Electric Co. customers found themselves shut down frequently in January. Several schools and businesses asked to be let out of the programs, saying they couldn't function due to the frequent outages.

The PUC on Thursday was expected to discuss a new plan for interruptible-service programs. Meanwhile, federal regulators said they will make several changes in oversight to expand the West's power supply.

The state has been struggling with a tight electricity supply since summer due in part to high natural gas prices and power plant outages for scheduled and unplanned maintenance.

The FERC changes include:

-- Letting large commercial power users sell power they save at a wholesale rate to be set by the commission.

-- Reallocating FERC staff to work on applications for natural gas pipeline and hydroelectric projects.

-- Urging hydroelectric plant operators to examine how they can more fully use their available water resources by adding or upgrading turbines or making other improvements.

On the Net:

Read the bills, AB8x by Migden, AB24x by Daucher and AB31x by Wright, at www.sen.ca.gov

California ISO: www.caiso.com

FERC: www.ferc.fed.us

©2001 Associated Press

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