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Power gap greatest in May, June

Posted at 10:09 p.m. PDT Tuesday, April 3, 2001

BY JOHN WOOLFOLK AND DION NISSENBAUM

Mercury News

Californians bracing for acute power shortages and rolling blackouts this summer may see the worst of the crisis as early as next month, Gov. Gray Davis acknowledged Tuesday.

Urging lawmakers to pass power conservation measures, Davis noted what many energy officials have been eyeing with growing concern: that state efforts to secure more power won't bear much fruit until late summer or fall.

Plans to obtain power contracts and portable generators for the summer are falling short. In addition, supplies from northwest dams and alternative energy generators are drying up.``Usually the challenge is in August or September,'' Davis said. `This year, the challenge may well be in May and June.''

Underscoring the severity of the crisis, Davis announced he has asked television stations to grant him five minutes of airtime at 6:05 p.m. Thursday to talk about energy. The last time a governor asked to address the public in a special broadcast was nine years ago when Gov. Pete Wilson talked about the state's budget problems.

The state's sense of urgency comes amid growing evidence that California's gap between power demand and available supply may be greatest in late spring and early summer.

Meanwhile, state regulators on Tuesday adopted a rash of proposals aimed at easing the pain of coming shortages and blackouts at a raucous hearing packed with protesters and others seeking exemptions.

When Davis announced a series of initiatives in February to pull California out of the crisis, he expected to have 95 percent of the state's unmet power needs secured in long-term contracts with energy suppliers.

He launched financial incentives and streamlined approval measures to bring new power supplies online by early to mid-summer, hoping to alleviate peak shortages and curb runaway power prices.

Two months later, much of that has failed to materialize. The state so far has signed contracts for just half the amount needed, and most of that power won't be available for a few years. This year, the state has signed up about a third of what is needed.

In addition, initiatives to put a host of small, portable generators in place to meet peak summer power demand are lagging. Plans by the California Independent System Operator, which runs the main transmission grid, to get 3,000 megawatts of power from these ``peaker'' plants came up with less than half that amount.

Likewise, Davis' initiative to get an additional 1,000 megawatts of peaker power online by the end of August has netted just 362 megawatts, with the first plants firing up in July. The Davis administration last month extended the deadline to the end of September, a move expected to boost the amount of peaker power to 960 megawatts.

Other major power sources coming this summer, two Calpine Corp. plants totaling 1,060 megawatts in July and 360-megawatts in August, have long been in the works. They remain on schedule, but won't do anything for May and June.

Meanwhile, supplies once counted on are evaporating. A severe drought in the Pacific Northwest has dried up the dams that are a major source of imported hydroelectric power for California.

And small alternative-energy producers that provide a third of the major utilities' power have been cutting off supply, pulling some 3,000 megawatts off the grid and contributing to blackouts last month.

The generators say they can no longer supply power because the nearly bankrupt utilities haven't paid them, and are not satisfied with efforts by the governor and regulators to fix that problem.

``You could easily see another 1,000 megawatts off-line by the end of the month,'' said Jan Smutny-Jones, executive director of the Independent Energy Producers Association.

An updated forecast from the system operator last week predicts a loss of 1,000 megawatts of hydroelectric power and the most severe shortage occurring in June rather than August. The state is expected to be short nearly 6,000 megawatts in June, a figure that will drop to 3,500 megawatts in August as new power sources come online.

``Because of new generation coming online later in the summer, it is May, June and July that are going to be the tougher months,'' said system operator spokeswoman Lorie O'Donley.

The new report did not calculate shortages for May, but shortages during that month are certainly possible. Last year's first acute power shortage was recorded May 22, prompting a Stage 2 alert that forced businesses to trim power usage.

Davis spokesman Steve Maviglio downplayed the significance of the governor's warnings about May and June. He noted that the system has proven unpredictable and that no one expected blackouts would hit in January and March.

``I wouldn't read too much into that,'' Maviglio said. ``It's just going to be tight in general, and people are just going to have to conserve, beginning now.''

To stave off a spring crisis, Davis urged Senate Democrats to pass two bills providing more than $1.1 billion to pump up programs that provide rebates and other financial incentives to conserve energy in homes and small businesses.

``The only way to fight back against the generators is to use less of their product,'' Davis said. ``The less we use, the less money they make.``The hope is, we don't have major disruptions. We're hoping for the best and planning for the worst.''

The California Public Utilities Commission agreed to exempt all hospitals from rolling blackouts, in which utilities cut power for an hour or so from one circuit to the next to prevent total system failure. The move came after hospitals, once considered exempt, complained of being shut off during two days of outages last month.

Commissioners also revamped a program that gives rate discounts to businesses that reduce power use on demand during shortages. They also told utilities to implement a program that gives customers a discount in exchange for having their air conditioners remotely switched off.

Barbara Feder, Hallye Jordan and Brandon Bailey contributed to this report.

-- Swissrose (cellier3@mindspring.com), April 04, 2001