California Power Officials' High-Wire Act

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Power Officials' High-Wire Act Rapid shifts of juice keep state plugged in

David Lazarus, Chronicle Staff Writer Friday, December 8, 2000

As California's power reserves dropped to the lowest level ever last night, engineers at the state's utilities huddled over speakerphones to attempt to manage the crisis.

With temperatures falling and supplies of electricity limited throughout the West Coast, these engineers were the last line of defense in trying to avert blackouts, a threat that is expected to grow today and during the weekend.

To keep the system intact, secure phone lines always remain open between utilities, regulators and the Independent System Operator, which oversees California's power grid.

As many as 50 players attempt, virtually minute by minute, to divide up available electricity so demand can be met at millions of homes and businesses.

Each day, the participants offer up their energy wish lists and haggle with the ISO over who gets what.

In the event of a blackout, the participants in the "operations call" -- "ops call" to insiders -- will coordinate which areas are hit and for how long.

"It's a very controlled call," said one industry official, requesting anonymity. "The folks on it are operating the entire system. This is information that, if it got out, would immediately affect the price of electricity.

"If you were a trader or a power generator," the official added, "you could really game the market."

Gaming the market -- manipulating prices -- is believed by some to be rampant in California. Gov. Gray Davis, state regulators, utilities and industry analysts have charged that power companies are deliberately holding back electricity until prices surge during periods of peak demand.

However, such behavior would not be considered illegal unless the generators were conspiring together, and so far no evidence of this has been found.

Nevertheless, suspicions persist. According to sources, additional reserves of power mysteriously became available from generators several days this week as prices rose in the late afternoon.

The power was immediately snapped up, at higher-than-average costs, by utilities struggling to meet early-evening demand from customers switching on lights, TVs, stereos, computers, appliances and Christmas trees.

Power demand at this time of year peaks around 6 p.m. In the summer, the peak comes closer to 4 p.m. because air conditioners are running as well.

"Clearly, the wholesale market is not operating efficiently," said Ed Van Herik, a spokesman for San Diego Gas & Electric.

Meanwhile, state officials are concerned that some power plants ostensibly shut down for routine maintenance actually may be idled for no better reason than to keep electricity supplies limited and thus boost prices -- and profits.

Loretta Lynch, president of the California Public Utilities Commission, was speaking with her counterpart at the ISO, Terry Winter, Tuesday afternoon when the pair agreed to jointly conduct inspections of a dozen idled plants statewide.

"We were concerned about why so many plants are offline at the same time," Lynch said yesterday. "This is quite an unusual level of megawatts to be offline at once."

Specifically, 11,000 megawatts of generating capacity -- roughly a fourth of the state's entire system -- is down this week. Of that amount, 4, 500 megawatts is accounted for by scheduled maintenance and another 2,500 by plants that have exceeded their pollution limits for the year.

The remainder, 4,000 megawatts, is the result of unscheduled repairs, and these are the plants that the PUC and ISO inspectors were targeting. Their probe was expected to conclude yesterday afternoon, although the results will not be immediately publicized.

Even if no skullduggery is discovered, Lynch said, this week's shutdowns point to the need for power companies to better coordinate their repairs.

"We need a more rational schedule of maintenance so we don't have more than 10,000 megawatts offline at the same time," she said.

Tom Williams, a spokesman for Duke Energy, which operates four plants in California, said one of his company's facilities near San Diego had been visited Wednesday by the inspectors. One generating unit at the plant was down for a scheduled pollution upgrade.

"The inspectors left satisfied that we were doing everything right," Williams said.

Power companies do not appreciate the accusations that they are to blame for California's chronic power shortage, he added. Duke, Williams stressed, is not gaming the market.

"Of course not," he said. "Not a bit."

This much at least is clear: All those idled plants contributed to a Stage 2 power alert early yesterday from the ISO, which authorized utilities to cut power to voluntary customers as statewide electricity reserves fell below 5 percent of load capacity.

Making matters worse, less power was available from out-of-state generators,

especially in Oregon and Washington. Unusually cold weather elsewhere is keeping excess power from being channeled into the West Coast's multistate grid.

And soaring natural gas prices are making most electricity plants more expensive to run, driving wholesale power prices higher.

The first Stage 3 power alert was called at 5:15 p.m. when reserves fell below 3 percent of capacity.

In a Stage 3 emergency, "rolling blackouts" can be initiated for about an hour at a time in neighborhoods statewide to relieve stress on the system.

With the stakes so high, members of the energy industry say it is more important than ever that engineers at the utilities and ISO are in constant communication via their network of speakerphones.

"It's critical," said Stephanie McCorkle, a spokeswoman for the ISO. "It's the link between everyone who would be impacted in an emergency."

On a typical day, the ops call begins with each utility forecasting how much power it expects to need. Pacific Gas & Electric Co. may request 16,500 megawatts, while Southern California Edison typically puts in an order for 13, 500 megawatts, and San Diego Gas & Electric seeks about 3,000 megawatts.

The ISO then sets about trying to ensure that each utility receives the juice it needs. As circumstances change throughout the day -- and they almost always do -- the ops-call team scrambles to come up with new ways of divvying up the electricity pie.

"It gives us the ability to get a snapshot of the market," said Steve Conroy, a spokesman for Edison. "It's extremely important to us."

In a Stage 3 emergency like yesterday's, it's the ops-call team that determines how much load needs to be reduced from the grid through rolling blackouts.

The team also would decide where the blackouts would hit throughout the state and how long individual neighborhoods would be without power. And it is the ops-call crew that would restore things to normal once the crisis has passed.

"These are the people on the front lines," said Ron Low, a PG&E spokesman. "They're a vital link in ensuring the safety of the power grid."

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How State's Power is Managed

-- Early in the morning, the "operations call" begins with representatives from each utility forecasting the amount of power it expects to need.

-- Reacting to a power emergency called by state officials, the ops call team group initiates electricity cutbacks to voluntary customers.

-- Throughout the day, as many as 50 players from utilities and regulatory agencies minute by minute divide up available juice so that demand can be met at millions of homes and businesses.

-- In the event of rolling blackouts, the operations call team decide which neighborhoods are hit and for how long.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2000/12/08/MN114209.DTL

-- Martin Thompson (mthom1927@aol.com), December 08, 2000

Answers

California Braces for Fifth Day of Power Shortages December 8, 2000 11:45 am EST

SAN FRANCISCO (Reuters) - California power officials extended their week-long emergency warnings Friday as the state faced a fifth consecutive day of electricity shortages. A "Stage Two" alert, signaling the cushion of available power supplies had narrowed to a precariously thin 5 percent of actual demand, was put in effect in the state until 10 p.m.

This followed Thursday's unprecedented move to a "Stage Three" emergency, the highest alert level, which put the state grid on the verge of rolling blackouts. The emergency was declared during the peak evening hours as the amount of available power barely kept pace with demand.

Rolling blackouts cut power to entire neighborhoods for about an hour at a time to ease the strain on the grid and prevent an uncontrolled collapse of the entire system.

California narrowly averted blackouts Thursday, but the state's power system has been hanging by a thread all week, with about a third of in-state power plants off line for repairs, maintenance, or shut for environmental reasons.

Meanwhile, power supplies from out of state, which typically supply about 25 percent of the California market, remained extremely scarce mostly due to cold weather in the Northwest, raising local demand there and sapping exports to the south.

Officials at the California Independent Operating System (ISO), which manages most of the grid serving California's 33 million residents, said the situation was showing signs of slight improvement, due to the usual drop in power demand Friday as offices and factories shut for the weekend.

"We're looking a little better today than yesterday," ISO spokesman Patrick Dorinson said.

"It's possible we won't have to go to a Stage Three today. We have picked up a little more generation and still have arrangements with the pumping stations and WAPA, so it looks a little better," he said.

After the Stage Three emergency was declared, arrangements were made Thursday evening with the Western Area Power Administration (WAPA), a federal power marketing association, to bring in extra power from Arizona.

The California Department of Water Resources, which operates huge water pumping stations used to move water from Northern to Southern California, also throttled back Thursday to lighten loads on the system.

These moves came on top of pleas to the public to conserve power, including turning off outdoor holiday lights, and cuts to industrial customers who buy their power at discounted rates knowing they can lose service when supplies run dangerously low.

"Californians should appreciate the efforts they made last night ... They really stepped up to the plate in a very tight situation," Dorinson said.

Dorinson warned, however, that California was not yet out of the woods, with high energy demand and even colder weather expected throughout the region early next week.

"We're about to find out next week just how interconnected the Western power grid really is. This is a regional problem."

Dorinson added that the biggest problem facing the Western electricity system, which stretches from the northern tip of Baja California to northern British Columbia, is that almost no new power plants have been built in the region in 10 years despite a rapidly growing population and strong economy.

http://www.iwon.com/home/news/news_article/0,11746,79461|top|12-08- 2000::11:47|reuters,00.html

-- Martin Thompson (mthom1927@aol.com), December 08, 2000.


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