Headline: Fragile Supply Network Apt to Fail

Source: Los Angeles Times, 21 March 2001

URL: http://www.latimes.com/business/reports/power/lat_supply010321.htm

A lot of people were caught off guard by the blackouts that swept over California this week. Debra Bowen wasn't one of them.

As chairwoman of the state Senate Energy Committee, she is intimately--and painfully--familiar with the state's energy supply. And she is willing to share a secret: It's a fragile system, capable of collapse at any time.

That knowledge keeps Bowen awake at night, particularly with the approach of summer, when power demand surges as Californians get reacquainted with their air conditioners.

"I sound a bit less like Chicken Little today, don't I?" Bowen said Tuesday, as chunks of the state once again were forcibly darkened. "I know a lot of people don't feel we have a problem. But we have a very, very big problem."

With the recent slowdown in Stage 3 emergencies, a sense of calm had settled over the energy debate, and even some legislators were speaking with guarded optimism about the hot months ahead.

On Tuesday, however, a creeping sense of doom was almost palpable among energy watchers, and previous supply forecasts--which predict that the state may yet escape summer blackouts--were being given a second look.

"The outages of the last two days are something that Californians are going to have to get used to for July and August," said Michael Zenker, California director of Cambridge Energy Research Associates. The Massachusetts consulting firm is predicting about 20 hours of blackouts this summer.

At the California Independent System Operator, which manages 75% of the statewide power grid, officials said the energy cushion the state had in 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 into a false state of comfort: "Maybe there is a tendency to think things have improved," he said. In fact, they haven't.

More than anything, this week's events illustrate the delicate balance of factors that keep California illuminated, from the multitude of supply sources to the weather.

Temperatures were higher than usual. Alternative-energy suppliers--who haven't been paid in months by the cash-strapped utilities--cut their output. Suppliers in the Northwest--which faces a drought--slashed exports. Equipment breakdowns and maintenance at power plants--much of it unanticipated--took 13,000 megawatts offline. A utility-run program that gives businesses discounts in exchange for cutting power during emergencies is all but dead.

"The fragility of the system is such that a small perturbation can turn everything upside down very easily," said Gary Ackerman, executive director of the Western Power Trading Forum, a group of electricity generators and traders.

One factor receiving particular attention is the dip in supply caused by unscheduled maintenance. To help officials predict available supply, generators provide an annual maintenance plan that is updated regularly.

In addition, however, facilities sometimes shut down for unexpected reasons: leaking tubes, burnt-out transformers, cracked turbines and faulty feed pumps. At one point Tuesday, about 8,200 megawatts were unavailable because of unscheduled shutdowns. That's enough to supply about 6 million households, and up from 5,700 megawatts a week ago.

The huge 1,400-megawatt Mohave power plant near Laughlin, Nev., which supplies Southern California Edison and the Los Angeles Department of Water and Power, was felled Monday by a transformer problem. That was enough to push the state into blackouts.

A growing number of skeptics, however, question whether those reasons are always valid, accusing generators of withholding power to shrink supply and drive up prices.

"There's no way to verify it, so you've got to take their word for it," said Frank Wolak, a Stanford University economist who studies California's electricity market. "And given that it's very profitable for these things to occur, you start to wonder if they're creating an artificial scarcity."

Tom Williams of Duke Energy said the Houston-based company is working hard to keep its California power plants, which are capable of producing 3,351 megawatts of electricity, in operation after months of near-continuous operation.

"It's like riding a moped across the country," he said. "They're just not meant to run this hard."

Last week, the state Senate formed a committee to investigate charges of market manipulation by power suppliers. The chairman, state Sen. Joe Dunn (D-Santa Ana), says the issue of unscheduled plant shutdowns is on his agenda.

"The problem is: How does one prove that a particular outage was part of a deliberate strategy to deprive the state of kilowatts, rather than a result of normal business operations?" Dunn said.

-- Andre Weltman (aweltman@state.pa.us), March 21, 2001

Answers

Equipment breakdowns and maintenance at
power plants--much of it unanticipated--
took 13,000 megawatts offline

The Y2K effect no doubt.

-- spider (spider0@usa.net), March 21, 2001.