California does not exempt refineries from electrical blackouts

Ann de Rouffignac OGJ Online HOUSTON, May 21 -- The California Public Utilities Commission has not given the state's refineries a blanket exemption from electrical blackouts, although it may allow exemptions if individual refiners can show public health or safety would be harmed. "Refineries cannot be considered for exemptions for economic reasons," said Commissioner Carl Wood in a conference call Monday. "They are not essential-use customers." The California regulators Monday announced an application process for businesses seeking exemptions from expected blackouts this summer, if they can show a loss of power would harm public health or safety. The state is expected to have at least 260 hr of blackouts this summer, according to a recent study by North American Electric Reliability Council. And some refineries are totally dependent on the state's power grid for electricity. Wood said hospitals, police, fire stations, military facilities, and key communication outlets are exempt. Under the new application process, the commission will add skilled nursing centers, medical laboratories, outpatient centers, and water and sewer districts. But individual facilities under those broad categories must apply separately to the commission for an exemption, Wood said. So far, separate applications have been received only from large sports stadiums asking for exemptions during events, he said. The California Energy Commission filed separate comments with the PUC advocating that refineries be placed on the "essential use" exemption list. The energy commission filed these comments on Apr. 25 and again on May 15. Energy commission officials said the PUC had not responded yet. If the commission staff recommends an exempt status for refineries, the commission would consider it, said Wood. Adding the nursing centers, medical laboratories, and outpatient centers to the public service providers already on the list could leave no room for refineries. The California Independent System Operator has said it needs, at a minimum, 40% of total load subject to blackouts. "We are told there is already 50% (of the load) exempt," said Wood. "We only have 10% left to go." Refineries total about 1% of California's total electricity demand. Refinery owners say they should be exempt because electricity curtailments could severely reduce the supply of California-specific gasoline. The state imports little gasoline and shortages could cause a ripple effect through the economy. Valero Energy Corp.'s 135,000-b/d Benicia refinery in the San Francisco Bay area produces 10% of the state's gasoline supply. Rich Marcoglies, Benicia plant manager, said the refinery depends on the grid for electricity. He said a power curtailment for only a few minutes could force the refinery to shut down, and restarting it could take 2 or 3 days. He said equipment damage from sudden curtailment could mean a delay of several weeks for restart. "We are still trying to work with the legislature on this," said Marcoglies. "A bill that would place refineries second on the power priorities list passed the state assembly unanimously but has gotten nowhere in the Senate." Contact Ann de Rouffignac at annd@ogjonline.com

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-- Martin Thompson (mthom1927@aol.com), May 23, 2001

Answers

Minimization of cascading effects from controlled blackouts requires giving critical infrastructure first priority for exemption. Failure to exempt water, sewer, and energy production infrastructure will result in awesome cascading effects that could vastly multiply the harmful effects.

Whether Y2K is part of the cause of this energy shortage or not, the effect, at least regionally, may well be comparable to the dreaded "chain reaction" effect so feared in 1999 for Y2K.

-- Robert Riggs (rxr.999@worldnet.att.net), May 23, 2001.

Under California law, I believe, gasoline sold and consumed must be a special blend that only California refiners make. It would be utterly stupid to not give them an exemption. Under the special political cloud they are forced to operate, if denied, if their equipment is ruined, and deiveries thus logjammed, delayed, and shorted, I can foresee $4 gasoline prices for the state, not $3.

Will the politicians ever wake up and smell the coffee? It's boiling over and California is burning.

-- Wellesley (wellesley@freeport.net), May 23, 2001.

Re: The California Independent System Operator has said it needs, at a minimum, 40% of total load subject to blackouts. "We are told there is already 50% (of the load) exempt," said Wood. "We only have 10% left to go."

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What a choice. There are already hundreds of businesses lining up to be included in that 10% exempt category. We need the refineries to be up and running, but does that mean we shut off nursing homes and old Aunt Bessie's respirator konks out? That would be a long jury trial when her grieving family sues the state and everybody else with a deep pocket. What a human interest story. News at 11. -- That's probably why they were further up the food chain than refineries.

I read somewhere that a spokesman from the Veteran's hospital (not sure which one but it was in CA) complaining about how the blackouts disrupted computers and made them defer some treatments, so the management was considering applying for an exemption. Sure would be nice to support our veterans, after all the sacrifices they made for us.

Water treatment plants may be exempt if refineries are not. I am rather relieved because I live only 1/4 mile from a sewer plant (thankfully, upwind). However, I may not be able to drive anywhere. Guess I'll have to recondition the bicycle. Hm, how long will it take me to bicycle 15 miles to work, on side streets . . .

Everybody's ox is going to get gored this summer. What are the odds that all of the facilities qualifying for exemptions, due to public safety, will still exceed the 10% limit? I do not envy the PUC staff their jobs right now.

-- Margaret J (mjans01@yahoo.com), May 24, 2001.