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Power woes hit Calif. so hard, its neighbors hurt

States trade blame for soaring rates, but there's plenty of blame to trade. ©New York Times

© St. Petersburg Times, published January 26, 2001

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SEATTLE -- Soaring electricity rates. Record-low reservoir levels at some big dams, which could imperil migrating salmon this spring. Deregulation plans in turmoil. A crash conservation program being urged on consumers and businesses. A dispute over whether to resume a long-abandoned nuclear power project.

For public officials in California's neighboring states and elsewhere in the West, these sound like ominous political problems. And they certainly are, except that those leaders, at least for now, have a convenient one-word explanation for the debacles and a place to point the blame: California.

"California made their mess and we're paying for it," said Ken Rust, the chief financial manager for Portland, Ore. Utah's governor, Michael O. Leavitt, blamed California's "disastrous deregulation scheme" for an 11 percent increase in electricity rates being proposed by a major utility in his state.

"Consumers in other Western states are left to pick up the tab," Leavitt said. An editorial cartoon in the Salt Lake Tribune shows California plugging into an electrical outlet in that snowy state to run a hot tub to the south.

California-bashing, long popular elsewhere in the West, has reached a new crescendo in recent days as that state's electricity woes continue to mount, forcing rolling blackouts and threatening its largest utilities with bankruptcy. Far from expressing much sympathy, many people outside of the state say California has brought a huge problem not only upon itself but, increasingly, upon the entire region.

There is much truth in this finger-pointing, but it hardly tells the whole story. While California is desperately seeking electricity during a season in which it normally exports electricity to the Pacific Northwest and the Rocky Mountain states, there are plenty of other reasons for the rising rates here.

Natural-gas prices are soaring throughout the nation, and reservoir levels for the mammoth hydroelectric projects in the Northwest are low mainly because the past few months have been among the driest in decades. John Savage, Oregon's energy director, acknowledged this factor in testimony before the Oregon House Committee on Smart Growth and Commerce on Wednesday when he said, "Our hope is for 75-degree weather and rain of biblical proportions for the rest of the winter."

And even as California gets blamed for failing to build any major power plants in a decade as its population grew by 4-million and its economy boomed, many other Western states do not have a much better record of increasing generation of electricity in the face of growing populations. "First and foremost, there is a shortage of megawatts," said Lawrence J. Makovich, senior director of power research for Cambridge Energy Research Associates in Cambridge, Mass., referring to problems throughout the West. "There simply isn't enough generating capacity attached to the grid to meet the demand. The second problem is that when shortages hit, prices go through the roof."

Montana, the nation's fourth-largest energy-producing state per capita, is one example of a Western state that no longer has the huge surpluses it once had. Until recently, it exported 40 percent of the energy it produced. But over the last decade, the state population grew by nearly 13 percent, and now state lawmakers are considering legislation that would loosen environmental regulations to make it easier -- and faster -- to build new power plants.

Still, people in other states say California is failing to hold up its end of a long-running bargain, even as its governor, Gray Davis, blamed "out-of-state profiteers" for driving up the price of electricity and pushing the state to the brink of crisis.

"It was a very complementary system," said Jacques Lawarree, an economics professor at the University of Washington and a deregulation expert. "California sends power in the winter, when it's most needed here, and in the summer we send back power. It's always been a very good thing.

"Now that they have a problem and cannot do their part, we in the Northwest are suffering for that, and there are some who wish we could cut off California entirely from the grid. But it's also clear that we've benefited for many, many years."

Like it or not, there is a general recognition that the Western states will remain tied together on the power grid that sends huge amounts of electricity across the region, and that more cooperation, not less, is needed between California and other states. The Western Governor's Association, a non-partisan group, is scheduled to meet in Portland next week, along with federal regulators and the new energy secretary, Spencer Abraham.

"It's very important that this doesn't deteriorate into a Northwest versus California thing," Gov. John Kitzhaber of Oregon said before a meeting with Gov. Gary Locke of Washington and Gov. Davis of California in Sacramento this month. (All three are Democrats.)

"We're all in this together," added Kitzhaber who, with Locke, has urged consumers, businesses and state agencies to find ways to cut electricity consumption by at least 10 percent. "We cannot afford to let California go down the tubes."

Still, as Rust, the director of Portland's bureau of financial management, put it, the federal mandates compelling Northwest generators to send power to California have aggravated the often "tenuous relationship" between his state and its much larger neighbor to the south.

As federal reservoirs have been drawn down to generate more power during this emergency, Rust said, the odds are being driven up that more young salmon will die this spring because river flows will not be adequate to get them downstream. The region, under the Endangered Species Act and a plethora of lawsuits, has spent billions of dollars on plans to save the endangered fish.

"This is a huge issue in the Northwest, and it seems like it's barely getting factored into the discussion right now," Rust said in a telephone interview. "The concern is that with this requirement to send power to California, all the concerns about protecting the stream flow, the salmon habitat, all the money that's been spent to protect those fish, it all could get thrown out the window in an instant."

Officials at the Bonneville Power Administration, the federal agency that sells power from a network of two dozen dams in the Northwest, said that low reservoirs are, indeed, danger signs, but are the result of the weather more than of the demands the California crisis has placed on the system. The fate of fish this spring will depend a great deal on the amount of rain and snow in the coming months and on the rate at which the winter snowpack melts into the region's rivers.

But senators from Washington and Oregon have pleaded with federal regulators, so far to no avail, to stop an order requiring Bonneville electricity to go to California. President Bush recently extended that order until early February but it would not be continued after then.

"Frankly, I think my state is being set up -- and I include Washington state -- to be an energy farm for California," Sen. Gordon Smith, R-Ore., complained last week. He said he had received calls from several business executives in his state who said electricity rates for their companies had gone up between 30 percent and 40 percent, and they blamed California's demands.

http://www.sptimes.com/News/012601/news_pf/Worldandnation/Power_woes_hit_Calif_.shtml

-- Martin Thompson (mthom1927@aol.com), January 27, 2001