Blackout prospects brightening

By Carrie Peyton and Dale Kasler Bee Staff Writers

(Published July 8, 2001) It's not the sort of question people expect in California's power quagmire, but here it is:

How come things are going right?

Despite widespread predictions of repeated outages, California is three weeks into summer without a single forced blackout.

The state's power system has held during hot spells in June and July. It's held when peak demand soared past 40,000 megawatts, the threshold grid operators use to determine increased blackout risk.

No one is quite sure why, although luck, skill and fear are all mentioned as leading contenders.

Even some who disagree about the reasons are beginning to agree on this: The rest of the summer may not be anywhere near as bad as once feared.

The Henwood energy consulting firm, which in March predicted 300 hours of West Coast summer outages, last week revised its estimate to zero.

Analysts at the North American Electric Reliability Council, a national organization aimed at keeping electric grids stable, also have become more optimistic after issuing a dismal prediction in May for about 260 hours of California blackouts.

"It's still going to be scary, and there are going to be some tight moments. We still anticipate some blackouts this summer, but definitely not as many," said Tim Gallagher, manager of technical services for the council.

The agency that runs most of California's power network, the state Independent System Operator, has not budged from its forecast that blackouts could strike on any day when demand peaks above 40,000 megawatts -- something that happened 34 days last summer.

"We are not out of the woods," said Jim Detmers, ISO vice president of grid operations. "It is the beginning of summer."

Still, at the beginning of last week, the first two days this year when demand passed the 40,000 mark, the ISO declared Stage 1 and 2 emergencies, but never advanced to Stage 3 or blackouts.

So many variables can steady the grid or tip it over the brink that it's almost impossible to guess how many outages might await California, which has seen six days of rolling blackouts so far this year, in January, March and May.

The state might come close three or four more times but have none, speculated Arthur O'Donnell, editor of California Energy Markets, a trade newsletter.

Or it could have 30 more, said Gary Ackerman, head of the Western Power Trading Form, a generators' trade group.

"You've got to pop over 43,000 megawatts for bad things to happen," he said. "And they will happen. There will be blackouts."

The sheer unpredictability of power grids already at the edge of their limits was underscored last week when Nevada Power ordered outages in parts of Las Vegas on Monday,the first time rolling blackouts had struck that state.

The investor-owned utility blamed a combination of hot weather, power plant breakdowns and suppliers who exercised options not to sell. But the underlying issue was a thirst for power that has dramatically outstripped supply. During the past seven years, when Nevada Power's peak demand increased from about 2,900 megawatts to 4,400 megawatts, it built only a single, 149-megawatt power plant.

"Any time you see demand growing and resources not keeping pace ... it eats away at your margin, and you become more susceptible to outages," said the reliability council's Gallagher.

That is the case not just in California but in Nevada and Arizona, as well as parts of the Northwest.

Because electric grids are intertwined throughout the West, each region can play a role in averting blackouts elsewhere.

"The Northwest has done a lot," said Richard Lauckhart, a project manager with Henwood Energy Services, an international consulting firm with headquarters in Sacramento.

A number of Oregon and Washington utilities have cut deals with aluminum smelters and agricultural water pumpers to sharply decrease their usage this year, he said. They have pushed conservation programs and scrambled to install new peaking plants.

"People have made Herculean efforts to bring on supply that we hadn't even heard of in March," driven partly by fear of high prices and a chaotic summer, Lauckhart said. About 600 megawatts of that unexpected new supply is outside California.

In addition, hydropower systems throughout the Northwest have conserved their supplies so carefully that reservoirs that were 80 percent empty in April are now only 29 percent empty, and they could be full by the end of July, he said.

That would position them to help California in a crunch, if needed.

Lauckhart pegged Northwest conservation at more than 2,600 megawatts at peak usage times. California officials estimate that energy cutbacks here are taking another 2,000 megawatts of load off the grid.

"All that we can control is going better than planned," said Gov. Gray Davis' spokesman Steve Maviglio, lauding Californians' efforts at power plant building and energy conservation.

However, he said, "We still are subject to the whims of the weather and imports," and the governor still expects some outages to strike this summer.

There is no question that, so far, California has been lucky.

June's longest stretch of hot days came when snowmelt still was producing healthy supplies of hydropower in the Northwest. July's hot spell was broken up by a mid-week holiday that drove demand down.

California still hasn't seen the workweek "heat storm" that intensifies each day as warmth is trapped inside homes and offices and people's patience with high thermostats wears thin.

That kind of weather often strikes in late July, August and September, and virtually everyone agrees that those days will be cliffhangers for the state's grid.

The ISO's Detmers says the summer has been calm so far because of cooler temperatures in Southern California, statewide conservation and new privately built power plants. The 320-megawatt Sunrise plant in Southern California and the 540-megawatt Sutter plant near Yuba City already have fired up, and the 559-megawatt Los Medanos plant in the East Bay is about to begin commercial operation.

In addition, maintenance work largely has ended at existing plants, and breakdown rates are back at their historical averages instead of far above them. Utilities also have worked out their payment disputes with alternative suppliers called qualifying facilities, which are being paid and are back on line.

Whether existing power plants keep up their current healthy performance remains an uncertainty. Last winter and spring, when outages were driven partly by power plant breakdowns, some analysts blamed aging equipment and some deliberate efforts to manipulate prices.

Since then, power plants haven't gotten any younger, but a few have come out of recent

tuneups, and federal and state scrutiny has increased.

"We have a lot of work to do on market monitoring and enforcement, but I think we're on our way. If there are abuses, we are capable now of finding out about it," vowed Nora Brownell, one of two newly appointed members of the Federal Energy Regulatory Commission.

In an interview last week, Brownell promised that the FERC will become "a lot more capable" of rooting out abuses within the next two months by changing procedures and taking some basic steps, such as setting up a toll-free number for whistleblowers.

While nothing can be done about the weather or underlying shortages, she said, the FERC's latest limits on electric prices in the West should create a more rational market. That could reduce the risk of rolling blackouts like last winter's, which were widely attributed to generators' refusal to sell, in part because of fear that utilities could not afford to pay them.

"If there were an incentive to withhold from the market or a fear that you would sell into the market or not get paid or get some enormous surprise in terms of refunds, those have been taken away," she said.

http://www.capitolalert.com/news/capalert01_20010708.html

-- Martin Thompson (mthom1927@aol.com), July 08, 2001

Answers

In addition, hydropower systems throughout the Northwest have conserved their supplies so carefully that reservoirs that were 80 percent empty in April are now only 29 percent empty, and they could be full by the end of July, he said.

Okay so why are the fish getting screwed?

Thanks Martin!

-- (perry@ofuzzy1.com), July 09, 2001.