California goes to Stage Three alert, but no immediate blackouts

SACRAMENTO - California declared an unprecedented electricity alert Thursday after the state's overwhelmed power grid, crippled by idled power plants and scant supplies, struggled to meet evening demands.

But the power grid's managers said they hoped to avoid blackouts by tapping electricity intended for the enormous state and federal pumps that push water from Northern California to the central and southern regions of the state.

''We're hoping that with these resources we can avoid the blackouts,'' said Lorie O'Donley, a spokeswoman for the Independent System Operator.

The Stage Three alert followed hours of increasing stress on California's electricity grid, which has been strapped by cold weather, power plants idled for maintenance and repairs, and dwindling imports.

The alert by the Folsom-based ISO, which manages California's electricity network, can entail forced blackouts to preserve the system.

But by temporarily halting the pumps - two-story structures that suck water from the Sacramento-San Joaquin River Delta east of San Francisco - authorities hoped to obtain at least an additional 500 megawatts, perhaps more.

The demand on grid reached 31,600 megawatts Thursday evening, nearly the maximum available. Reserves dipped to below 1,000 megawatts, prompting the alert. One megawatt is enough electricity for 1,000 homes.

''We are within less than 1,000 megawatts right now,'' said ISO spokeswoman Stephanie McCorkle. She said the Stage Three alert would remain in effect until 10 p.m. PST.

If the reserve is exhausted, power outages likely would begin.

''If we're short by 500 megawatts, that's 500,000 people affected (by blackouts). If we're short 1,000 megawatts, that's a million people,'' McCorkle said.

She said about 85 percent of California, which is about 900 miles long with 34 million people, is covered by the alert.

Throughout the day, hundreds of companies cut their electricity usage. Others awaited notification to do likewise - computer chip maker Intel prepared to turn off 50 percent of the lights at its 6,500-employee Folsom campus if necessary.

''If that's not enough, we'll take the lights down 100 percent and work in the dark,'' said Bill Mueller, Intel's director of communications.

The IS0 said an unidentified 500-megawatt power plant unexpectedly went down in the afternoon, further stressing the system.

Shortly before the Stage Three alert, the ISO said California utilities, which try to buy power at least a day in advance to obtain the best possible price, had purchased power with just one hour lead time.

By late afternoon, that lead time had been cut to 10 minutes, the ISO said, reflecting a dramatic tightening in the market.

The ISO also said a new cold snap was expected to hit Sunday evening, posing new stresses for the system.

Gov. Gray Davis said the problems stemmed in part from flaws in California's newly deregulated electricity system, including huge increases in the cost of wholesale power.

''We're simply not ready for deregulation in California,'' the governor said.

''California is riding point on this deregulation experiment,'' Davis added. ''The problem is, I can't control the process. There are too many players. I'm trying to use a combination of reforms, good ideas and guilt to produce the desired result'' of stability and an easing of high rates.

California has experienced isolated blackouts in the past, but has never endured controlled widespread blackouts ordered by authorities to protect the state's power grid.

The ISO declared a Stage Two power emergency at 4 a.m., urging millions of residential and business customers to conserve energy.

Hundreds of companies voluntarily cut power under ''interruptible'' energy conservation agreements triggered by the alert. Those companies get huge rebates in exchange for agreeing to reduce power if necessary during such emergencies.

The alerts are the latest in a series of problems to bedevil California's deregulated electricity system, which has been rocked for six months by dramatic increases in wholesale energy costs.

Under a 1996 law, California's investor-owned monopoly utilities began a gradual transition to deregulation. The companies were required to sell off their power-generating assets, such as dams and power plants, and purchase electricity on the open market.

The goal was to lower prices to consumers through a competitive market. But skyrocketing energy costs have sent market prices sharply higher.

During the transition, the utilities operate under a rate freeze. Afterward, the freeze is removed.

San Diego Gas and Electric Co., with 1.2 million customers in San Diego and southern Orange County, was the first to complete its transition. It passed on the costs of wholesale electricity to its customers, resulting in a doubling and tripling of customers' bills. The increases prompted state and federal investigations.

Pacific Gas and Electric Co., with 4.5 million customers in Northern and Central California, and Southern California Edison Co., with 4.2 million, still have a rate freeze.

Together, the two utilities contend they have paid more than $5 billion in excess wholesale charges since the summer. The companies have sought permission from state regulators and the federal courts to pass those charges on to their ratepayers.

With few power plants of their own, California utilities have been forced to pay high rates for wholesale electricity.

Concerned about deregulation, power plant builders shunned California and no new power plants were developed for a decade, leaving supplies stagnant. Several new plants are under construction now - eight have been licensed since 1998 - but the soonest they will begin operation is next summer. State officials believe costs will ease as that new energy becomes available.

The last major blackout in California occurred June 14 during a heat wave in the San Francisco area. It lasted several hours and was due to local voltage and equipment problems.

In 1996, there was an uncontrolled cascading blackout throughout the Northwest, including many areas of California, that lasted up to nine hours.

Earlier in the week, the state Public Utilities Commission ordered engineers and inspectors to examine idled power plants at a dozen sites across the state to verify the legitimacy of their shutdowns.

Authorities ordered the inspections after an unusually large number of power plants, producing about 7,000 megawatts, reported they were down for maintenance or other reasons.

Publicly, there was no indication officials were concerned about deliberate shutdowns to drive up costs. Privately, though, officials at two state agencies said they were concerned the number of idled power plants could result in cost spikes ultimately benefitting those plants.

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On the Net:

The California Idependent System Operator Web site is www.caiso.com