PUC to Vote on Overhauling Rolling Blackouts

David Lazarus, Chronicle Staff Writer

Tuesday, April 3, 2001, ©2001 San Francisco Chronicle

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/04/03/MN87668.DTL

With a summer of predicted power shortages fast approaching, state officials are scheduled to vote today on a series of measures designed to reduce consumption and, in turn, prevent almost daily blackouts.

The measures to be acted upon by the state Public Utilities Commission include an overhaul of regulations -- and exemptions -- for rolling blackouts, as well as new programs to reward customers for conservation efforts.

Among other moves, the PUC will order Pacific Gas and Electric Co. to submit plans for transmitters to be installed on customers' air conditioners so that the utility could automatically switch them off during power shortages.

In other energy-related developments:

-- PUC President Loretta Lynch said yesterday that it had yet to be determined when the average 40 percent rate increase approved last week would take effect.

While consumers' bills are not expected to go up before next month, state regulators and utilities are still hashing out whether the increases will be retroactive to March.

-- PG&E will be ordered to study the environmental impact of upgrading its power lines near Bakersfield to allow more electricity to be transmitted from Southern California to the northern half of the state.

The cost of such work, expected to run into the billions of dollars, would be passed along to consumers in the form of higher rates -- even if the power lines are purchased by the state.

-- The size of the bond offering to cover state electricity purchases may rise to $14 billion, the PUC said. Earlier estimates had placed the size of the offering at $10 billion.

Passage of the measures is virtually assured because they are supported by the Democratic appointees who make up a majority on the commission.

With severe power shortages forecast for this summer, and thus a high likelihood of rolling blackouts, the PUC plans to introduce a series of initiatives designed to protect so-called essential-use customers from outages.

Acute-care hospitals and transportation systems with underground systems, including BART and Muni, would be exempt from power cutoffs. Utility customers on life-support equipment would be notified in advance of a blackout so they could switch to generators.

For its part, PG&E called yesterday for a panel of experts to be formed to offer recommendations on the numerous requests for blackout exemptions received since last month's outages.

"This is a very complicated area," said Dan Cooley, staff counsel for the utility. "An advisory panel would be able to help the PUC decide which requests should be acted on."

To help avert blackouts, the PUC will expand a program for voluntary power cutoffs, especially among large industrial users.

The existing program was derailed at the beginning of the year when so many outages were requested from participating companies that PG&E used up its entire annual quota in just a few weeks.

Under the revised system, companies' voluntary outages would be limited to no more than six hours a day, four days a week and 40 hours a month. Utilities also would be required to provide 30 minutes' notice before cutting off electricity.

The changes are intended to prevent companies from being taken offline so frequently that their business suffers. They also are meant to keep the voluntary outage program running through the summer.

In return for participating in the program, companies would pay lower rates throughout the year.

The PUC will seek additional voluntary outages with a new system that would pay heavy users $350 for every megawatt hour they can reduce from their load. Such users would offer their reductions on days when power reserves fall to dangerously low levels.

However, it is not yet clear how such users would interact with utilities during energy emergencies, or how the program would be funded.

No less controversial, the PUC intends to order PG&E and San Diego Gas & Electric to submit plans for cutting off customers' air conditioners as of the summer of 2002.

A similar program was implemented by Southern California Edison several years ago, although it has yet to catch on among the utility's customers.

Participants receive modest stipends ranging from $25 to $100 each summer in return for agreeing to allow the utility to remotely cut off their air conditioners during power shortages.

PG&E's Cooley said the utility opposed such a program for its customers, not least because it would cost more than $200 per household to install remote switches.

Nevertheless, he said PG&E would compile a plan to install transmitters if ordered to do so by the PUC.

E-mail David Lazarus at dlazarus@sfchronicle.com.

©2001 San Francisco Chronicle Page A - 10

-- Swissrose (cellier3@mindspring.com), April 03, 2001