Second Day of Blackouts Disrupts 500,000 Homes and Businesses

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Power: Grid operators say the shortage should ease in the next few days, but officials see a grim summer.

By MITCHELL LANDSBERG and ERIC BAILEY, Times Staff Writers

Electricity blackouts rolled through California for a second straight day Tuesday, disrupting business in one of the world's most technologically advanced economies and leaving schoolchildren groping in the dark.

Jinxed by a combination of bad luck and bad decisions, utilities were forced to cut off power to more than half a million homes and businesses from San Diego to the Oregon border. By day's end, there was some good news from the operators of the statewide power grid, who said the situation had eased and appeared likely to improve for the next few days.

And Gov. Gray Davis announced a proposed solution to one vexing problem: the utilities' failure to pay the state's small, alternative power generators, many of whom have stopped producing power as a result.

Davis called the utilities "shameful" for failing to pay, and praised the alternative power generators, which include solar, wind and geothermal energy producers, as "good corporate citizens" who produced power although they weren't being paid. "We are anxious to pay the [small producers], who are dropping like flies," Davis said.

Despite the progress, it was hard for some people to look on the bright side after enduring outages that took place when the state's hunger for power was almost 50% less than at its summer peak. "This is a taste, almost like an appetizer, of a really unpalatable meal that's going to be served up this summer," said Michael Shames of the Utility Consumers' Action Network in San Diego, himself a victim of a rolling blackout that hit his office in San Diego early Tuesday.

Power officials have warned that this could be a grim summer in California, since demand for electricity sharply rises when people turn on air conditioners. The state has been struggling to meet its power needs in recent months because of rising prices and a flawed deregulation plan that has left the two biggest private utilities on the brink of bankruptcy. State leaders have so far failed to agree on a comprehensive plan to solve the problems.

The latest round of blackouts began about 9:30 a.m. Tuesday when the California Independent System Operator, which runs the statewide grid, determined that the demand for electricity was 500 megawatts more than the supply--an imbalance that meant the state was short on the power needed to supply electricity to about 375,000 homes.

Grid operators blamed a confluence of events, including warmer weather; outages at several major power plants, including one unit of the San Onofre nuclear power station; a reduction in imports from the Pacific Northwest, and the shutdown of many alternative energy producers. Similar blackouts Monday were the first since January.

The situation improved somewhat by late Tuesday morning, with some supplies restored and Californians conserving energy, and Cal-ISO was able to halt the rolling blackouts at 2 p.m. Once again, customers of the Los Angeles Department of Water and Power were spared, although the municipally owned utility said its electrical surplus was smaller than usual. The DWP, like Southern California Edison, was affected by an outage at the huge Mohave power plant in Nevada, as well as by planned outages at several of its facilities.

As in the past, by far the biggest impact was felt by customers served by Pacific Gas & Electric, the state's largest utility, which cut power to 438,000 homes and businesses. Edison cut power to 47,462 customers in about 40 cities, but eventually was able to avoid blackouts by shutting off the air conditioners of some of 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 but ultimately unavoidable inconvenience. In Palmdale, four schools lost power during one of the hourlong blackouts, but teachers and students pressed on in the sunlight pouring through windows and skylights. At Barrel Springs Elementary, Principal Cruz Earls said the biggest problem came when students had to go to the bathroom: Hand in hand, they made their way through darkened hallways with flashlights.

All in all, it wasn't a terrible experience. Then again, the weather wasn't that hot Tuesday, with a high of 79 in Palmdale, so the shutdown of air conditioners wasn't much of a hardship. "I don't want to think about the conditions this could create in May or June," Earls said.

Businesses of all kinds complained about the lack of warning for the outages--and sometimes found innovative ways to get around the problem. Rattled by news reports of Monday's rolling blackouts, El Burrito Mexican Food Products in the city of Industry started its Tuesday shift at 2 a.m. to beat the clock in the event of an outage. Thathunch paid off. Workers had just finished cooking and packaging the last batches of salsa and masa when the lights went out at 10:20 a.m.

Company owner Mark Roth said the firm will continue working odd hours to avoid further outages. But he isn't buying the line from the utilities that they can't provide advance warning because of concerns about looting and rioting. "We're ready to do whatever it takes to get through this thing," he said. "But they've got to give us some notification."

At Big O Tires in Elk Grove, just south of Sacramento, owner Daniel Crum had his 14 workers take an early lunch break or head to the warehouse to reorganize the goods. Without electricity, they couldn't repair brakes or 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 unseasonably warm weather. Supplies were tighter than usual, in part because of several outages, including that at the Mohave plant, half of which was brought back on line by the end of the day.

The San Onofre Nuclear Generating Station was still limping along without power from one of its two 1,100-megawatt units, which was shut down Feb. 3 after a half-hour fire in a nonnuclear part of the plant. Edison, which operates San Onofre, initially estimated the unit would be out for several weeks but recently said "extensive damage" to parts of the turbine will keep the unit out of commission until mid-June.

Shipments from the drought-stricken Pacific Northwest, which generates most of its electricity from large dams, were also down. "Each time we take a measurement, we're closer to the all-time record for the driest year," said Dulcy Mahar, spokeswoman for the Bonneville Power Administration, the network of federal dams that provides the region with much of its electricity. "We've been doing what we can, but we simply don't have power to sell."

Finally, there was the problem of the small and alternative energy producers, which have shut down plants because they haven't been paid by the private utilities since November. Those outages have cost the state about 3,000 megawatts of electricity, enough for about 2.3 million homes.

"You're seeing the system freeze up," said David Sokol, chairman and CEO of MidAmerican Energy Holdings Co., which runs eight geothermal plants in the Imperial Valley through its subsidiary, CalEnergy. His company hasn't shut down yet, but Sokol said smaller companies couldn't continue to sell their 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 to get the producers running again. He said utilities have had no right to collect money from ratepayers and then not use the funds to repay the small producers. The state has spent billions to buy power from large conventional producers on behalf of the utilities but has refused to pick up the tab for alternative energy.

"The utilities acted in a shameful manner by putting money in their pockets that was designed to pay the [small producers]," Davis said. The plan outlined by Davis would allow the generators to choose between two rate plans. They could decide to be paid 7.9 cents per kilowatt-hour over five years or 6.9 cents a kilowatt-hour over 10 years.

The utilities must begin paying the generators the new rates beginning April 1 or face fines, Davis said. The question of how the companies will get paid the about $1.5 billion they are owed remains unresolved. That issue will be decided in coming weeks as Davis' negotiators continue to work on rescue plans for the state's financially hobbled private utilities.

PG&E spokesman Ron Low said the state's largest utility did not take kindly to Davis' criticism, and noted that the governor's plan is similar to a proposal that PG&E made last week to producers. Jan Smutny-Jones, executive director of a trade group that includes some 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 producers to continue to generate and not be paid," Smutny-Jones said. "But we'll need to see what the order says; the devil will truly be in the details."

Grid operators said the state's overall energy situation eased by midday Tuesday because of repairs at the Mohave plant and another large plant at Ormond Beach, and because the Western Area Power Administration came up with 300 megawatts of electricity from Glen Canyon Dam. Also, grid spokesman Patrick Dorinson said conservation savings spiked upward after earlier complaints that Californians weren't conserving.

"We saw the people of California probably conserve 900 megawatts today," he said. "That was probably the difference." ---

Times staff writers Andrew Blankstein, Jose Cardenas, Marla Dickerson, Noaki Schwartz, Nicholas Riccardi, Doug Smith, Rebecca Trounson and Richard Winton in Los Angeles, Miguel Bustillo and Julie Tamaki in Sacramento, Maria La Ganga in San Francisco, Stanley Allison, Matt Ebnet, Scott Martelle, Dennis McLellan, Monte Morin, Jason Song, Mai Tran and Nancy Wride in Orange County, and Richard Simon in Washington contributed to this story.

-- Swissrose (cellier3@mindspring.com), March 21, 2001