CALIFORNIA ISO - STAGE TWO ELECTRICAL EMERGENCY August 11,200, 2000

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STAGE 2 EMERGENCY NOTICE [200000144]

Effective 08/11/2000 at 14:30 the California Independent System Operator is implementing Stage 2 of the Electrical Emergency Plan. The Plan has been implemented for the following reason(s):

high loads and temperatures across the ISO control area.

Stage 2 is expected to be in effect from Hour Ending 15 through Hour Ending 20.

Participating transmission owners are to notify the Utility Distribution Companies within their operational areas.

Stage 2: Operating reserves are expected to fall below 5%. The UDC will implement interruptible service programs AS DIRECTED BY THE ISO and will take all additional actions necessary in preparation for immediate implementation of electrical emergency plans and await further orders from the ISO.

This message is from Market Operations at the California ISO.

Notice issued at: 08/11/2000 14:25

-- PHO (owennos@bigfoot.com), August 11, 2000

Answers

Consumer demand for electricity is tracking higher than expected as the beginning of a heat wave builds across the west. The anticipated peak demand on the California ISO grid has been revised upward from 41,833 megawatts to 42,200 megawatts, which is expected to occur at around 4:30 p.m. today

The California ISO is asking customers to voluntarily reduce their use of electricity, to prevent more severe curtailment measures. The Emergency is in effect from 2:00 p.m. through 8:00 p.m. today.

The state's Electrical Emergency Plan is initiated to advise the public of potential power shortages and to ask all customers to conserve electricity to ensure there will be enough power to meet future demand. The request for demand reduction is not intended to disrupt employment or curtail industrial production or commerce. However, if the conservation measures are insufficient in lowering the demand for power, load management programs that implement voluntary curtailments of power are probable.

The Emergency takes effect when electricity operating reserves fall below seven percent. A Stage Two is declared when reserves drop below five percent. At this level, large commercial customers that have signed up to voluntarily curtail power during high demand days will be asked to do so. If an operating reserve shortfall of less than one- and-a-half percent is unavoidable, Stage Three is initiated. Involuntary curtailments of service to customers including ``rolling blackouts'' are probable during this emergency declaration. The California ISO's Electrical Emergency Plan (EEP) is part of the state's enhanced reliability standards enacted by landmark legislation Assembly Bill 1890 that led to the restructuring of California's electricity industry.

The California ISO is chartered by the state to manage the flow of electricity along the long-distance, high-voltage power lines that make up the bulk of California's transmission system. The not-for- profit public-benefit corporation assumed the responsibility in March 1998 when California opened its energy markets to competition and the state's investor-owned utilities turned their private transmission power lines over to the ISO to manage. The mission of the California ISO is to safeguard the reliable delivery of electricity, facilitate markets and ensure equal access to a vast 12,500 circuit miles of ``electron highway.''

Continuously updated information about the California ISO control area's electricity supply and the current demand on the power grid is available on the web at www.caiso.com.

Other helpful contacts: -- Pacific Gas and Electric 415/973-5930 -- Southern California Edison 626/302-2255 -- San Diego Gas and Electric 877/866-2066

-- PHO (owennos@bigfoot.com), August 11, 2000.


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