Richardson warns Calif power suppliers Thursday, 18 January 2001 19:40 (ET)

Richardson warns Calif power suppliers By HIL ANDERSON, UPI Chief Energy Correspondent

LOS ANGELES, Jan. 18 (UPI) -- California experienced a second day of power outages Thursday as Energy Secretary Bill Richardson warned power sellers not to flaunt orders to sell electricity into the state's troubled market.

Power suppliers are under an emergency order from the Department of Energy that directs them to make surplus megawatts available to California buyers at a rate to be determined by the agency. However, Richardson said he had heard disturbing reports that some traders were ignoring his directive.

"We have enforcement actions that we will take if they don't send this power," Richardson told an audience at the RAND Corp. in Santa Monica. "We will use them swiftly and effectively."

Richardson would not elaborate on which companies were suspected of holding back supplies, or what action might be taken, other than being "hauled into court."

Duke Energy, the North Carolina energy heavyweight, issued a statement ahead of Richardson's appearance stating that it was doing its best to meet California's needs.

"In fact, for all of 2001, 90 percent of our generation has already been sold to other suppliers with California delivery points," said Duke group president Harvey Padewer, "All of our available generation is running flat out to meet these obligations and to supply the state's power grid during this crisis.

"There are many players in the California energy market -- and all, not just a few -- must be involved in providing solutions."

A Stage Three power alert was in effect for the third consecutive day due to operating reserves being under 1.5 percent. Scattered outages were triggered across Northern California from the San Francisco Bay Area to the Oregon border during the morning hours, and officials at the California Independent System Operator (ISO) would not rule out more blackouts during the peak demand hours just after sunset.

"There are ongoing negotiations with potential suppliers in Canada," said Kellen Fluckiger, chief operating officer for the ISO. "There are still significant issues remaining regarding credit and money."

Rolling outages occurred in northern and central California during a two-hour period on Wednesday before additional supplies of power were secured from Canada and the Los Angeles Department of Water and Power.

The electricity deficit Thursday was one of the worst in the ongoing series of supply crunches that began last summer. Gov. Gray Davis had projected the shortfall at 45 percent as he signed an order proclaiming a state of emergency on Wednesday night.

Richardson added that he was considering a similar emergency order to keep natural gas supplies flowing into the state where cash-strapped utilities are having trouble keeping up with strong gas prices.

"There is a natural gas problem in this state, too," he said. "If Pacific Gas & Electric can't obtain enough gas, customers may not be able to heat their homes and 8,000 MW of generation capacity would have to be shut down."

Other than the issuance of emergency orders, however, Richardson made clear the new reality that California should not expect much immediate help from Washington.

He said California's electricity demand had grown 13 percent in the past year alone, fueled in part by the boom in computer use and the high-tech industry. The demand outpaced new generating capacity and was complicated by a dry year that reduced hydroelectric resources.

"This is a state issue," Richardson said. "The 1996 deregulation that took place here appears to not be working." -- Copyright 2001 by United Press International. All rights reserved. --

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-- Martin Thompson (mthom1927@aol.com), January 18, 2001

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-- Martin Thompson (mthom1927@aol.com), January 18, 2001.