http://www.capitolalert.com/news/capalert02_20010516.html

An energy council expects five times the outages forecast

By Dale Kasler, Bee Staff Writer

(Published May 16, 2001)

In the bleakest assessment yet of California's summertime energy shortage, an industry association Tuesday predicted the state will suffer five times as many rolling blackouts as previously forecast.

Moreover, the group said the blackouts will be twice as widespread -- affecting twice as many Californians at a time -- as any the state has experienced this year.

The North American Electric Reliability Council predicted 15 hours of blackouts a week through September, vs. about three hours under assumptions released by the Independent System Operator, which runs California's power grid. The council's prediction sharply contrasted with predictions by Gov. Gray Davis, who has said the state will avoid major problems this summer.

"All indications are, there are going to be chronic problems this summer," said Tim Gallagher, manager of technical services at the reliability council.

He said Californians for the first time can expect blackouts during odd hours and on weekends, instead of just the late-afternoon hours when electricity consumption usually peaks.

A Princeton, N.J., nonprofit group funded by the energy industry and dedicated to monitoring the nation's power supplies, the reliability council said electricity supplies may be iffy this summer in the Pacific Northwest, New York, New England and Texas. The only state where it predicted blackouts was California.

Taking note of the ISO's study, the council was far more pessimistic about the levels of available power this summer from California's existing hydroelectric, nuclear and natural gas-fired generating plants. It also predicted fewer imports from out of state and said California will get less power than expected from the host of new power plants scheduled to begin operation over the summer.

The council did say the demand for power is likely to be less than the ISO estimated, thanks to the impact of conservation programs and a hefty rate increase approved by the Public Utilities Commission. But the council said conservation programs are likely to generate only a third of the savings predicted by state officials.

California has experienced six days of rolling blackouts this year, including two last week, the result of hydropower shortages, unexpected plant shutdowns and the financial crisis facing the state's two main utilities, Pacific Gas and Electric Co. and Southern California Edison.

The second blackout, on Jan. 18, was the most widespread, cutting power to 750,000 homes at a time. The reliability council said the average blackout this summer will be twice as bad, taking down 1.6 million homes at a time.

Predicting the impact of summertime blackouts has become something of a cottage industry, with various independent consultants forecasting billions in economic losses. Recently a consultant hired by top business lobbyists said the state will lose 135,000 jobs if it suffers 110 hours of blackouts -- less than half as many hours as predicted by the reliability council, which is owned by 10 Regional Reliability Councils whose members come from all segments of the electric industry.

The effect on the business climate remains to be seen. "We really have no experience with this," said chief economist Ted Gibson of the California Department of Finance.

Various industry analysts have predicted anywhere from 20 to 36 days of rolling blackouts this summer. The ISO has said the state could face blackouts any day when total demand exceeds 40,000 megawatts, which happened 34 times last summer.

The ISO, which is scheduled to update its summer forecast next week, didn't predict the number of hours of blackouts. But the reliability council fed ISO's assumptions into its computer model and came up with 55 hours of blackouts this summer. Using its own, more pessimistic assumptions, the council estimated 260 hours, or about 15 hours a week.

"It wouldn't shock me," said Severin Borenstein of the University of California Energy Institute. "It's a little high, compared to the other estimates, but there's a lot of uncertainty about what's going to be available in state and out of state."

The ISO had no comment on the council's projections, but Davis' office said the forecast is overly pessimistic. "Their calculations are based on the worst conditions occurring all day, every day," said Davis spokesman Steve Maviglio.

He said the council overlooks the expected supplies from new "peaker" power plants and two Orange County plants that will fire up this summer after five years in mothballs. The report also underestimates the level of power that neighboring states will sell to California, he said.

"They assume it's going to be blazing hot in Phoenix, Portland and San Francisco all on the same day (drastically reducing imports), and that never happens," Maviglio said. Davis has tried recently to minimize the impact of blackouts, saying: "We'll get through the summer without major disruptions. A couple of difficult days, but no major disruptions."

The council and the ISO are far apart in their assessment of supplies. The ISO, for instance, predicted that the state will get nearly 2,600 additional megawatts of power by July from new plants under construction, enough electricity for nearly 2 million homes. The council said new plants typically don't operate at full efficiency when they're starting up. Its prediction: 500 megawatts, or enough for only 375,000 homes.

Similarly, the ISO said the drought will curtail hydro supplies by 1,000 megawatts. The council said the shortfall will reach 2,400 megawatts by August. And while the ISO figured unexpected plant shutdowns will erase 2,500 megawatts of power, the council predicted the damage will be more than 4,500 megawatts.

The Bee's Dale Kasler can be reached at (916) 321-1066 or dkasler@sacbee.com.

-- Swissrose (cellier3@mindspring.com), May 16, 2001

Answers

Fifteen hours a week is bad enough, but 1.6 million customers at a time going out is even worse.

-- LillyLP (lillyLP@aol.com), May 16, 2001.

With this hypermammiferous formation--energy demand and bloated stock market--it's hard to see anything but a severe recession approaching.

I can't believe Wall Street cannot see this. Why?

-- JackW (jpayne@webtv.net), May 16, 2001.

I compare it to Weather forecasters. They are so busy looking at the models and graphs they forget to look out the window to see if it is raining

Glad to see you back Jack.

-- Martin Thompson (mthom1927@aol.com), May 16, 2001.