Please see the following articles:

Sac Bee, Tues, 5/22: Rate hikes bigger worry than blackouts, poll says

Sac Bee, Tues, 5/22: Energy Digest: Half-hour warning for blackouts?

Sac Bee, Tues, 5/21: What's the hang-up?

Sac Bee, Tues, 5/20: Dan Walters: One year later, we know it wasn't just a
simple game of golf

Sac Bee, Tues, 5/22: Daniel Weintraub: Energy crisis sapping California's
confidence (Editorial)

SD Union, Tues, 5/22: Panel pulls the plug on county utility plan

SD Union, Tues, 5/22: Business customers criticize proposed 29% SDG&E rate
hike

SD Union, Tues, 5/22: State sends $533.2 million to company, part of April
bill

SD Union, Tues, 5/22: 75% say power woes 'very serious'

SD Union, Tues, 5/22: Governor told to try seizure in power war

SD Union, Tues, 5/22: Head of PUC unveils evidence of power plant manipulation

LA Times, Tues,  5/22: State to Issue Warnings of Power Outages

LA Times, Tues, 5/22: Businesses May Seek Blackout Exemption

LA Times, Tues, 5/22: Legislators Set to Sue Federal Energy Agency

SF Chron, (AP) Tues, 5/22: California will forecast blackouts and warn the
public

SF Chron, (AP) Tues, 5/22: Developments in California's energy crisis

SF Chron , Tues, 5/22: How blackout warning plan works

SF Chron , Tues, 5/22: Davis licenses 8th emergency power plant

SF Chron, Tues, 5/22: PAY UP: Rate increases to hit more users than first
reported, PUC says

SF Chron, Tues, 5/22: Energy crisis not real, state's residents say
But poll results show most expect more blackouts

SF Chron, Tues, 5/22: Power plant 'ramping' to be probed State senators also
expected to file suit,
charging federal regulators with failing to ensure fair rates

SF Chron, Tues, 5/22: Half-hour notice of blackouts planned FAST ALERTS:
Power grid operator may send voice, e-mail messages

SF Chron, Tues, 5/22: Time-of-use power pricing may be the answer

SF Chron, Tues, 5/22: The mouth that roared

Mercury News, Tues, 5/22: Blackout alerts, forecasts proposed

OC Register, Tues, 5/22: Blackout season may be heating up

OC Register , Tues, 5/22: Cheney: Forget price caps, OPEC pressure

OC Register, Tues, 5/22: A nuclear rebirth? (Editorial)

Individual.com, Tues, 5/22: Mexico Seen As Medium-Term Solution To California
Power Shortage

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Rate hikes bigger worry than blackouts, poll says
By Dan Smith
Bee Deputy Capitol Bureau Chief
(Published May 22, 2001)
The vast majority of Californians expect to be inconvenienced by power
blackouts this summer, but two-thirds continue to be far more concerned about
higher electricity rates they believe are unjustified, according to a Field
Poll released Monday.
Meanwhile, 85 percent of the state's residents say they have cut back their
energy use since the crisis began, and nearly two-thirds believe they can
conserve an additional 5 percent to 10 percent.
As they were at the outset of the crisis, poll respondents remain skeptical
of the power shortage's root cause. Nearly six out of 10 say the crisis is an
attempt by energy companies to increase rates, rather than the results of a
real market imbalance.
"As the seriousness of the issue has gone up, the cynicism has remained
high," said Mark DiCamillo, director of the San Francisco-based poll. "The
public still doesn't buy the claim that it's supply and demand. They think
it's an artificial crisis."
The poll results, obtained by interviewing a cross-section of 1,015 adults
between May 11 and Sunday, are part of a special survey the Field Institute
undertook to measure public opinion about the energy crisis. Subsequent
releases will survey attitudes about the available policy options and the
policy-makers who might exercise them.
Monday's results show Californians are reacting negatively to higher
electricity rates, even though the most recent increase has yet to appear on
their monthly bills.
In a finding nearly identical to Field's January survey, 67 percent are more
concerned with higher rates than power blackouts.
And that does not bode well for the elected officials trying to solve the
problem, DiCamillo said. Pocketbook issues such as rate increases, he said,
"focus more public opinion on the actors in this drama -- the politicians."
A majority (52 percent) believes the $5 billion rate increase approved by the
state Public Utilities Commission last week for customers of Pacific Gas and
Electric Co. and Southern California Edison was not justified, and an
identical proportion believes the rate increase will cause a "somewhat" or
"very serious" problem in their households.
The proportion of people who believe the increases will cause "very serious"
problems corresponds to their family income. Among those earning $20,000 or
less, 27 percent believe the increases will cause very serious problems. Ten
percent of those earning $80,000 or more believe very serious problems will
occur.
In contrast, 27 percent say blackouts have caused a "great deal" or "some"
inconvenience thus far, although 71 percent believe expected blackouts this
summer will cause the same degree of inconvenience. More low-income residents
(45 percent) say they will experience a great deal of inconvenience from
summer blackouts, compared with just 26 percent of those in the $80,000 and
above category who feel the same way.
The poll shows that the 85 percent of respondents who estimated they have
conserved power have cut back, on average, about 8 percent. Gov. Gray Davis
has asked all residents and businesses to reduce power use by
10 percent, although Davis' plan assumes a 7 percent reduction. Eighty-five
percent also say they can conserve even more, with additional savings, on
average, amounting to 4 percent.
Six out of 10 believe the state can avoid blackouts this summer through
conservation.
"These numbers are a good guess as to what real conservation is being
achieved and what is likely to be achieved, and it's not a huge amount,"
DiCamillo said.

The Bee's Dan Smith can be reached at (916) 321-5249 or smith@sacbee.com.

Energy Digest: Half-hour warning for blackouts?

(Published May 22, 2001)
Grid operators are hoping to issue power blackout warnings a half-hour in
advance, but the new alerts would be educated guesses and blackouts might not
follow.
The proposed warning system is expected to be approved Thursday by the board
of the California Independent System Operator, the Folsom-based organization
that runs most of the state's high-voltage transmission system.
Although an unknown number of the alerts will turn out to be false alarms,
"this would be a huge step forward" for businesses, said Carl Guardino, head
of the Silicon Valley Manufacturing Group and a member of the ISO board.
"For employers, a half-hour is the time needed to fire up a major generator,
to power down an assembly line, to have your employees save what they have on
their computers," he said.
By comparison, the last two rounds of rotating blackouts came with two- and
six-minute warnings, Guardino said.
The new system could be put in place by June 1, and might also include
expanded systems for giving e-mail notifications of power alerts or potential
blackouts, ISO officials said.
--Carrie Peyton

Connell plans to borrow
State Controller Kathleen Connell says Gov. Gray Davis' energy plan doesn't
add up.
Connell said at a news conference Monday that the state will spend money on
electricity at a faster rate than anticipated by Davis, a fellow Democrat.
As a result, Connell said, she expects to borrow about $4 billion this fall
to avoid state budget cash shortages in the coming fiscal year.
"We are virtually in the same kind of fiscal environment that we were in a
bad budget year," Connell said.
In recent years, the state has regularly borrowed money through one-year
revenue anticipation notes to avoid cash-flow problems. The notes are paid
off within a year when enough tax money flows to the state treasury.
But Connell didn't have to resort to borrowing this year because of plentiful
revenue and a healthy reserve.
Connell said the state's energy purchases have changed the picture, and
called into question Davis' assumptions. The governor's plan calls for 11
percent of the power purchases in the first half of this year to be covered
by lower-cost, long-term contracts. As of last week, only 1 percent of the
purchases were under contracts, Connell said.
But Joe Fichera, Davis' financial adviser, said that seven more long-term
contracts for electricity during peak demand periods this summer will be
delivered to Connell's office today.
--John Hill

Suit to seek price caps
The state Legislature plans to file suit today in federal court in a bid to
force the Federal Energy Regulatory Commission to impose caps on power
prices.
The lawsuit will argue that the commission has failed to ensure that
Californians are paying just and reasonable rates, as required under the
Federal Power Act.
The suit is being filed by Senate President Pro Tem John Burton, D-San
Francisco, and Assembly Speaker Robert Hertzberg, D-Sherman Oaks. Hertzberg
said consumer groups and others are also expected to join the suit.
As evidence, the suit will cite reports earlier this year by the California
Independent System Operator that the state's electricity market was not
resulting in just and reasonable rates. The ISO is responsible for running
the state's transmission grid.
The suit will cite evidence of how high power rates are causing harm to
society, Hertzberg said.
--John Hill

U.S. attacks special rate
Before the idea goes any further, the federal government Monday asked state
utility regulators to junk a proposal for a special, high-priced federal
energy rate.
In an emergency appeal, federal officials asked the state Public Utilities
Commission to take a special vote Thursday to drop the idea of even
researching a pilot program, calling it discriminatory and a waste of time.
As part of a vote last week that created new electricity rates, the PUC also
launched a study into charging all federal facilities market-based prices for
power -- a move widely seen as a dig against federal authorities who have
refused state pleas to cap wholesale prices.
But three of the five PUC commissioners said at the time that they disliked
the idea and would consider other options.
Given their reluctance, it would be a waste of utilities' scarce resources to
even begin researching how to assess the special rate, the Department of the
Navy wrote the PUC on Monday, arguing on behalf of all federal executive
agencies.
--Carrie Peyton

What's the hang-up?
Clotheslines save energy and money, but they are considered unsightly by some
and are banned in many areas
By Mary Lynne Vellinga
Bee Staff Writer
(Published May 21, 2001)

Rising electricity rates have prompted Stacey Swett to seriously consider
taking a step she finds somewhat distasteful: hanging a clothesline in her
back yard.
"I don't really like the looks of them, but you have to get past that; we
have a huge issue here with our SMUD bill," Swett said.
The California Energy Commission touts clotheslines as a nearly cost-free way
to conserve electricity. Statewide, clothes dryers burn about 1,000 megawatts
of electricity on a hot summer day, which could be enough to avert a blackout
on days when state power supplies are tight. An electric dryer costs about
$130 a year to run. A retractable clothesline will set you back about $14.99.
People appear to be getting the message. Hardware stores report a sharp rise
in clothesline sales since the energy crisis hit. People are "going back to
the old way of doing things," said Dave Haskin, owner of Broadway Hardware in
Sacramento.
But the old way of doing things doesn't sit so well in some newer
neighborhoods. Where Swett lives, in midtown, she can decide for herself
whether to take the plunge and pin up the bloomers. But in many newer
neighborhoods -- those governed by homeowners associations -- the practice is
not allowed.
Swett works for the management company that runs the homeowners association
for the gated, Pocket-area subdivision of Riverlake. In Riverlake, it is
against the rules to hang your laundry where your neighbors can glimpse it.
The same is true in Gold River, Rancho Murieta, Laguna West and Los Lagos,
the mansion-studded Granite Bay enclave where Sacramento Kings stars Chris
Webber and Jason Williams live.
"People think (clotheslines) are unsightly," said Dan Kocal, owner of the
Folsom-based Kocal Management Group. His company manages the homeowners
associations for 70 communities in the Sacramento region. Not one of them
allows clotheslines unless they are shielded from neighbors' views below the
fence line or behind a special enclosure.
When people buy into planned communities such as Gold River, Los Lagos or Sun
City, they agree to certain rules designed to keep the neighborhood looking
neat and uniform, Kocal said.
"You agree that you're only going to park in the garage, that you're not
going to hang out clothes and that you're not going to paint your house
purple," Kocal said.
Clotheslines that can be seen from neighboring yards are banned by virtually
all the 35,000 California subdivisions and condominium complexes governed by
homeowners associations, said Richard Monson, president of the Pasadena-based
California Association of Homeowners Associations.
"We choose to live in neighborhoods that don't hang these things out," Monson
said.
A few weeks ago, Monson was quoted as saying that the sight of hanging
laundry is "akin to graffiti in your neighborhood." Cartoonist Garry Trudeau
since has devoted an entire week of his Doonesbury strip to lampooning
neighborhoods that don't allow clothes to be hung out to dry.
Now, Monson chooses his words more carefully. "When we talk about areas of
communities that are less desirable, we often associate those with
undesirable items that are in proximity to the buildings," he said. He stands
by his assertion that the sight of clothes flapping in the breeze could knock
15 percent off property values.
Brian Rosebrock, a supervisor at the new Home Depot in Elk Grove, doesn't
understand the stigma. When he was growing up in a rural area outside New
York City, his mother always dried the family's clothes on the line.
Rosebrock, 40, still likes the smell of sun-dried clothes. He hangs his
jeans, socks, sheets and other cotton items in the back yard of his Rosemont
house.
"It's just laundry. Everybody is a little uptight here," he said of
Californians.
He may have a point. Bruce Hackett, professor emeritus of sociology at the
University of California, Davis, said Californians harbor more negative
attitudes toward clotheslines than do people in the Midwest, where line
drying is more of a tradition.
About 10 years ago, Hackett did a survey of 45 UC Davis students and 35
single-family households in Green Bay, Wis. At the time, some students living
in married housing on the UC Davis campus were upset that they had to walk to
an isolated, screened area next to the trash bins to hang their laundry.
"The housing office said clotheslines make the place look like a tenement,"
Hackett said.
The attitude in Wisconsin was markedly different.
"On wash day, there were just clotheslines everywhere, which is something you
don't find here," Hackett said. "One woman told me that when you move into a
new home it's not really your home until your clothesline is up and your
clothes are on it."
In the wake of student complaints, the university eventually changed the
policy to allow the use of retractable clothes lines in the housing area,
Hackett said.
Leaders of several Sacramento-area homeowners associations said they couldn't
think of any instance in which a homeowner has asked permission to hang a
clothesline or has gotten in trouble for using one.
"I don't know of anyone who has a clothesline," said David Brickell,
president of the Los Lagos Estates Homeowners Association. He said the Los
Lagos neighborhood is very concerned about the energy crisis and thus "would
certainly consider" allowing clotheslines.
To save energy, the subdivision has started turning off its entrance fountain
at night and is considering buying a smaller fountain pump.
Monson, head of the statewide association, argued that there are many ways to
conserve energy without resorting to the public airing of laundry. Wet
clothes can, for instance, be hung in the garage or the utility room, he
said.
"The issue is not clotheslines, the issue is conservation, and hom'eowners
don't have to hang their clothes out of doors," he said.
But some energy-conscious citizens think discouraging the use of outdoor
laundry lines is ridiculous, given the state's energy situation.
Jennifer Putnam, 41, recently purchased a large umbrella-style apparatus to
dry clothes in her Jackson back yard.
"We were standing outside by the (electric) meter at one point, two or three
months ago. My husband said, 'Look at how fast that thing is going around.' I
said, 'The only thing on is the dryer.' "
"During World War II, we had to do certain things," Putnam continued. "Now,
we're looking at a power crunch, we're looking at saving an economy in
California. That's critical. That's important. ? I really don't think Granite
Bay is going to turn into a slum because people put up things to dry their
clothes on."
The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or
mlvellinga@sacbee.com.

Dan Walters: One year later, we know it wasn't just a simple game of golf

(Published May 20, 2001)

California will mark -- but certainly not celebrate -- an anniversary this
week. It was exactly one year ago that a late spring heat wave swept over San
Diego, and as air conditioners began drawing heavy amounts of power, San
Diego Gas & Electric Co. began charging its customers high, market-oriented
rates for juice.
It was the beginning of the California energy crisis, or at least of public
and political awareness that something was wrong. And a year later, every
aspect of the crisis continues to grow worse. We are paying 10 times as much
for power as we were two years ago. We have amassed more than $20 billion in
private and public debt that will grow even with sharp increases in consumer
power rates. And we face potentially life-threatening summer blackouts.
Certainly the roots of the crisis extend much further than one year. They go
back to decisions in the 1970s to stop major power plant construction and
rely on conservation and alternative generating sources. And they include a
momentous decision in the mid-1990s to adopt a "deregulation" plan that was
an unworkable hybrid of open markets and price controls that left us at the
mercy of out-of-state generators. Of more currency is what was and wasn't
done in the last 12 months to fan that spark into a uncontrolled, and perhaps
uncontrollable, firestorm.
Gov. Gray Davis once said that he was approaching energy just as he plays
golf, "one hole at a time." Unfortunately for Davis, and for the state, it
was not a golf game, but one of three-dimensional, and perhaps
four-dimensional, chess. To manage the crisis effectively, the Democratic
governor needed the ability, either personally or through trusted aides, to
pull together its disparate elements into a cohesive whole.
The golfing approach was evident from the beginning, as Davis dealt with only
the most immediate aspects of the situation as they evolved, rather than
embracing it wholly and actively. Private and public energy experts warned
that what was happening in San Diego was a harbinger of a larger crisis and
proposed that the 1996 "deregulation" be suspended, that rates be raised
slightly and that private utilities be given broad authority to enter into
long-term supply contracts to stabilize the market. But Davis and his
handpicked state Public Utilities Commission president, Loretta Lynch,
stalled for time.
Less than a month after the crisis first surfaced, the PUC voted 3-2 to
authorize long-term supply contracts at about 5 cents a kilowatt-hour --
slightly higher than wholesale prices had been, but ridiculously cheap by
contemporary standards. Publicly owned utilities saw the looming price
escalation and quickly locked up long-term supplies, but Lynch denounced the
commission action as "a wrong turn" that could lead to higher consumer bills,
and within days it was scuttled in legislation signed by Davis.
Rather than face the issue comprehensively and proactively, Davis, Lynch and
the Legislature opted for an expedient fix in San Diego, rolling back retail
rates without addressing either supply or cost issues. Within weeks, private
utilities were beginning to take on billions of dollars in debt as wholesale
costs skyrocketed.
Last summer's failure to act was compounded by other errors of judgment. It's
clear now, for example, that it was a mistake for the state to continue
buying power at sky-high rates when the utilities had exhausted their credit.
Having a new deep pocket encouraged the generators to charge whatever the
market would bear.
A year after he could have nipped the crisis in the bud, but didn't, Davis is
busily rewriting history and blaming others, principally Republicans, for the
dilemma. But the governor cannot, or should not, escape the responsibility
for approaching this very complex situation like a game of golf, or like some
routine political dispute, and thus failing to apply the aggressive and
sophisticated managerial touch that this crisis demanded from the onset.
As Gen. George McClellan discovered at the Battle of Antietam during the
Civil War, the unwillingness to take risk often leads to greater carnage.
The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.com
.

Daniel Weintraub: Energy crisis sapping California's confidence

(Published May 22, 2001)

California's energy crisis is becoming a crisis of confidence. As electricity
rates rise and blackouts mount, residents are losing faith in their
government's ability to deal with the one issue underlying this crisis and
almost everything else that happens in the state -- population growth.
Energy and growth, in fact, are intertwined in the minds of everyday
Californians to an extent not yet reflected in the debate inside the Capitol,
according to the results of a new poll from the Public Policy Institute of
California.
More than three-quarters of those surveyed statewide said they believe
population growth contributed to the electricity shortage. And even if the
energy crisis fades, people expect other problems associated with growth to
worsen.
The crisis, in other words, has only heightened a sense that many people
already had, a feeling that California's famous quality of life is threatened
by rapid growth and our failure to provide the public works and services
needed to make growth tolerable.
For the first time since the mid-1990s, more people say the state is headed
in the wrong direction (48 percent) than in the right direction (44 percent).
And 56 percent said they expect bad economic times in the year ahead. That's
a quick decline from January, when a majority said they thought the state was
on the right track and 62 percent expected good economic times ahead.
"There is some deep-seated anxiety about the way government works, the way we
plan for the future, the way we make law, the way big decisions are made by
the governor and the Legislature," said Mark Baldassare, a Public Policy
Institute researcher who conducted the poll. "People didn't have a great deal
of confidence in local and state government to begin with, and now they have
even less."
Asked to cite the most important problem facing the state, 43 percent named
energy. But fully one-quarter of those surveyed said growth or related
problems -- the environment, housing, and transportation -- were on the top
of their list. Just 6 percent named schools as the top problem, a big drop
from a year ago, and the same number cited the economy. Other perennial
favorites -- crime, health care, taxes -- barely registered on the scale.
By a wide margin, Californians view growth as inevitable, but that doesn't
mean they have to like it. More than 8 in 10 said the state's anticipated
climb from 34 million people to 45 million by 2020 will make California a
less desirable place to live.
Six in 10 said traffic congestion is already a big problem in their
community, and 23 percent said it was somewhat of a problem. Nearly
three-quarters said the availability of housing was a problem. Sixty-four
percent said air pollution was a problem, and 61 percent complained about the
lack of opportunity for well-paying jobs.
The poll's respondents were conflicted about how best to deal with these
problems. A large majority favored local control rather than letting the
state taking a more active role in guiding growth and development. Yet an
astounding 89 percent said local governments in a region should work together
rather than each city and county deciding growth issues on its own.
But in a reflection of their lack of confidence in government, 63 percent
said local citizens should make growth decisions by voting on ballot
initiatives, while 35 percent said it would be better for local officials to
make those calls after thorough planning reviews and public hearings. A
little more than half -- 51 percent -- said they would vote today for an
initiative to slow the pace of development in their community even if it
meant having less economic growth.
What does all this mean for the political world? It's been clear for months
that the energy crisis was sapping Gov. Gray Davis' popularity in the state,
and this poll confirms that trend. Six in 10 say they disapprove of the way
Davis has handled the energy crisis, and his overall approval rating has
slipped to 46 percent, from 63 percent in January.
Conventional wisdom has been that if Davis could somehow find his way through
the energy crisis, he still could cruise to re-election. But that may no
longer be the case. Sixty-seven percent of residents say the crisis has made
them less confident in the state government's ability to plan for the future.
Gone is the optimism Californians once had that growth would produce a more
vibrant economy and make life better for us all.
Californians have a vaguely uneasy feeling that things are slipping out of
control, that no one really has a grip on where this state is going and how
we are going to get there. The energy crisis is only the most vivid example
of our failure to cope with change. People are worried. Davis should be, too.

The Bee's Daniel Weintraub can be reached at (916) 321-1914 or at
dweintraub@sacbee.com.

Panel pulls the plug on county utility plan

Backers blame SDG&E for bill's demise in Assembly committee
By Bill Ainsworth
UNION-TRIBUNE STAFF WRITER
May 22, 2001
SACRAMENTO -- An Assembly committee yesterday thwarted a bipartisan effort to
ease the way for San Diego County to form a municipal utility district that
backers say would bring residents cheaper and more reliable power.
Proponents of the plan said San Diego Gas & Electric and its parent company,
Sempra, engineered a political power play that ensured defeat of the
proposal. The utility was the main opponent.
"Their lobbyists just got on this thing and killed it," said Bill Horn,
chairman of the San Diego County Board of Supervisors, who attended
yesterday's hearing before the Assembly Utilities and Commerce Committee.
"They did a tremendous disservice to residents of San Diego County."

But a lobbyist for Sempra told the committee that forming a municipal utility
wouldn't solve the energy crisis because it would do nothing to increase the
supply of electricity.
"We're not in the middle of a utility crisis," said lobbyist Cindy Howell.
"It's a generation crisis."
The bill, which would have applied only to San Diego County, had strong
bipartisan support from local officials, including state Sens. Steve Peace,
D-El Cajon, and Dede Alpert, D-Coronado, who took the unusual step of
personally testifying before an Assembly committee.

But the proposal earned just three of the 10 votes needed to clear the
committee. All of the votes came from Republicans.
The bill's author, Assemblyman Mark Wyland, R-Escondido, blasted the
stockholder-owned utility company for opposing the bill.
"They simply don't want a threat to their ability to make as much money as
they can on the backs of San Diego ratepayers," he said.
Proponents say forming a public utility would allow residents to tap cheaper
sources of power, especially future hydroelectric power planned by the San
Diego County Water Authority.
They argue that controlling some power plants could reduce the county's
dependence on expensive electricity now purchased by SDG&E on the wholesale
market. That, in turn, could lead to lower utility bills.
During the current energy crisis, communities with publicly owned power,
including Los Angeles and Sacramento, have paid much lower energy bills than
communities served by investor-owned utilities.
But current state law makes it difficult to create a local municipal utility
because it requires a majority of voters to endorse the plan in an election
in which at least two-thirds of registered voters turn out.
As a practical matter, that means approval likely would occur only during a
presidential election when voter interest is high.
Peace said the current law was written for a reason: to protect privately
owned utilities.
"The law was written on purpose by this Legislature to make it almost
impossible to form a municipal utility district," he said.
Wyland's legislation, Assembly Bill 206, would have changed the law to allow
majority-vote approval in the new district, without regard to how many voters
turn out.
A proposal to create a municipal utility would have to go through months of
local hearings before it could be placed on the ballot. Wyland said he didn't
expect the new agency to replace SDG&E but merely to give residents more
options over the long term.
Initially, Sempra opposed the bill because it would have given the new public
agency the power of eminent domain to take over transmission lines and other
facilities owned by SDG&E.
At the hearing yesterday, Wyland offered to strip eminent domain power from
the new agency.
But Howell, the Sempra representative, still opposed the plan and argued that
there is no reason to change the voting requirement in the current law.
Forming a utility district, she said, is a significant step that should
require high voter turnout.
The bill also drew opposition from unionized employees of Sempra.
Committee chairman Rod Wright, D-Los Angeles, voted against the bill, saying
it was vague and that San Diego legislators should get a better idea of what
they want to do.
He left open the possibility that he would support a proposal to allow the
county to buy power but not to form its own utility.
Wright, widely considered an ally of the privately owned utilities, received
$16,500 last year in contributions from Sempra, according to the Secretary of
State's Web site.
Other members of the committee objected to the proposed structure of the new
utility, which would be governed by a nine-member board of two supervisors,
two San Diego City Council members, three council members from county cities
and two public members.
The proposal seemed to turn the political parties' positions on public power
upside down.
The measure failed to win any votes from Democrats, who enthusiastically
endorsed a new state power authority that allows California to finance, buy
and seize power plants.
But the plan was supported by three Republicans, including Assemblymen Jay La
Suer of La Mesa, David Kelley of Idyllwild and Bill Leonard of Rancho
Cucamonga. Republicans opposed the state power authority, with some calling
it socialism.
Wyland said he may try to resurrect the proposal later in the year.

Business customers criticize proposed 29% SDG&E rate hike

By Craig D. Rose
UNION-TRIBUNE STAFF WRITER
May 22, 2001
SDG&E's commercial customers are attacking the prospect of paying an average
of 29 percent more to cover the state's soaring cost of buying electricity.
At a California Public Utilities Commission hearing in San Diego yesterday,
some business customers also noted the irony that only in February did they
win the same rate freeze as residential customers.
"We need rates we can depend on," said John Roberts, who owns an irrigation
products business in San Marcos.
SDG&E customers were the first to bear the brunt of deregulation, and the
utility's residential ratepayers were the first to win a reprieve when the
state capped rates at 6.5 cents per kilowatt-hour.
The SDG&E cap is expected to end for all customers in the coming weeks as the
commission moves to increase SDG&E's rates to levels now paid by customers of
PG&E and Edison, which are about 3 cents per kilowatt-hour higher.
Yesterday's hearing, however, was for commercial rates.
Roberts said his San Marcos-based irrigation products company has withstood a
tripling of power costs over the past year, while having to cut the cost of
its products because of competition, he said.
Roberts added that socking businesses with high costs in order to spare
residential electricity customers from expected rate hikes could be
counterproductive.
"If businesses leave the state, they'll be without jobs, and a $30 savings on
their power bills won't mean much," Roberts said.
The hearing at the County Administration Building was attended by about 30
people. An additional hearing is scheduled at 7 p.m. today in the Community
Rooms at the Oceanside Civic Center, 330 N. Coast Highway.
Larger crowds are expected for hearings on residential rate increases. Dates
for those hearings have not been set.

State sends $533.2 million to company, part of April bill

By Ed Mendel
UNION-TRIBUNE STAFF WRITER
May 22, 2001
SACRAMENTO -- One of the biggest single checks ever issued by the state of
California, $533.2 million, went to an Atlanta-based firm Friday for power
purchased for California utility customers during a single month, April.
Mirant, formerly Southern Energy, says more than half of the power came from
three plants in the San Francisco Bay Area that it purchased from Pacific Gas
and Electric for $801 million under a failed deregulation plan.
State Treasurer Kathleen Connell, who displayed a blown-up copy of the check
at a news conference yesterday, said she thinks the state has failed to
obtain enough cheap long-term power contracts and will have to borrow more
than the $13.4 billion planned.
Connell, an elected official who issues state checks, said the power bills
she had paid by last Thursday, totaling $5.1 billion, provide no basis for
assuming that the price of electricity "is dropping and that it will continue
to drop through the summer."
But a consultant for Gov. Gray Davis said the state, which has more long-term
contracts than Connell has seen, is on track to control power costs with the
aid of conservation and that it plans to meet its goals without additional
borrowing.
"I think the public should have confidence that this is not a rosy scenario,"
said Joseph Fichera of Saber Partners, a Davis consultant. "It's the expected
scenario."
The state plans to issue a bond of up to $13.4 billion in late August that
will repay the general-fund taxpayer money used for power purchases, about $7
billion so far. The bond will be paid off over 15 years by utility customers.
Davis has declined to reveal details of state spending for power, arguing
that the information would be used by power suppliers to submit higher bids.
A group of newspapers and Republican legislators have filed lawsuits to force
disclosure.
Connell said she has received 25 contracts from 17 power suppliers. She
declined to release details of the contracts, saying they are complicated and
have varying prices.
Connell said the check for $533,181,235 issued to Mirant Friday is one of the
largest she has written since taking office in 1995.
"This purchase was made entirely at spot-market prices," Connell said, "even
though the Department of Water Resources (the state agency that purchases
power) has an executed long-term contract with this company."
Mirant said in a statement that, at the request of the state, its marketing
arm gave the state a "helping hand" by buying power from suppliers not
willing to sell to the state and then reselling the power to the state.
"We've done the state a tremendous service in purchasing power on its
behalf," said Randy Harrison, Mirant's Western chief executive officer, "and
it's wrong for the transactions to be misinterpreted and skewed in a negative
light."
Mirant said its subsidiaries generated 1.377 million megawatt-hours in April,
while its marketing arm purchased enough additional electricity to boost the
total sold to the state during the month to 2.077 million megawatt-hours.
The firm said the power was sold for an average of $256.87 per megawatt-hour.
That's below the $346 average that the state expects to pay on the expensive
spot market during the second quarter of this year, from April through June.
But it's well above the average price of $69 per megawatt-hour said to have
been obtained in the first round of long-term contracts negotiated by the
state.
Mirant purchased three power plants from PG&E capable of producing 3,000
megawatts during a controversial part of deregulation. The state Public
Utilities Commission ordered utilities to sell off at least half of their
fossil-fuel power plants without requiring the purchasers to provide low-cost
power to California.
The utilities sold nearly two dozen major power plants capable of producing
more than 20,000 megawatts. The largest group of plants, 4,700 megawatts,
went to AES Corp. of Virginia. Three Texas firms purchased plants producing
7,000 megawatts.
The power supply situation in California remained sound enough yesterday to
ward off blackouts, although temperatures are on the rise throughout the
state. More heat means more air conditioning, and a greater strain on the
system.
But starting next month, the state's electricity grid managers plan to
provide businesses and consumers with better forecasts of potential rolling
blackouts.
The California Independent System Operator will post on its Web site "power
warnings" when there is at least a 50 percent chance that rolling blackouts
might be required during the next 24 hours. The ISO will issue a "power
watch" when less-critical shortages are anticipated in advance of high demand
days.
The agency also plans to give a 30-minute warning before it orders utilities
to cut power to customers, posting information about probable interruptions
on its Web site. Its Web site address is http://www.caiso.com
"There have been a number of requests from businesses and consumers alike
that would like more advance notice and to be able to plan better. That's
what we are trying to do," ISO spokeswoman Lorie O'Donley said.
O'Donley said many details about how notifications will occur still have to
be worked out, including whether e-mails or pagers might be used.
In other developments in the electricity crisis:
?About 1.5 million compact fluorescent light bulbs will be distributed to
375,000 households as part of the "Power Walk" program that began during the
weekend. Members of the California Conservation Corps are going door-to-door
in parts of some cities to distribute the bulbs as part of a $20 million
conservation program.
?Republican legislative leaders sent Davis a letter criticizing the governor
for using taxpayer funds to hire two aides to former Vice President Al Gore
as communication consultants for $30,000 a month. The Republicans said Mark
Fabiani and Chris Lehane operate "a partisan, cut-throat political
communications firm."
?The state Auditor General said in a report on energy deregulation that the
state is not meeting some of its goals for conservation and for building new
power plants. The auditor also said the PUC does not have a process for
quickly approving new transmission lines. The state has been importing about
20 percent of its power.
Staff writer Karen Kucher contributed to this report.

75% say power woes 'very serious'

By John Marelius
UNION-TRIBUNE STAFF WRITER
May 22, 2001
The overwhelming majority of Californians now regard the state's electricity
crisis as a serious problem, but say they have not yet been greatly
inconvenienced by it, a new Field Poll has found.
The nonpartisan statewide survey found that while people believe the
electricity problem is real, they believe it stems more from an attempt by
energy companies to drive rates up than from an actual shortage.
They are also far more worried about soaring electricity bills than the
threat of blackouts.
And Californians offered contradictory views as to whether electricity
conservation can head off blackouts this summer. They believe all electricity
consumers -- residents, businesses and government -- can reduce their usage
enough to avert blackouts. But they also say they already have cut back their
own usage about as much as they can.
In January, the Field Poll surveyed public attitudes about the growing
electricity crisis. At the time, 58 percent characterized the situation as
"very serious." Now, the percentage of the population that considers the
situation "very serious" has grown to 75 percent.
Californians also hold a rather cynical view of the crisis. Thirty-six
percent say they believe it is the consequence of an electricity shortage,
but 59 percent say it was caused by energy companies seeking to increase
profits.
The Field Poll is based on telephone interviews with 1,015 California adults
conducted between May 11 and Sunday. According to statistical theory, the
poll would be accurate 95 percent of the time within a margin of error of 3.2
percentage points.
So far, the ill effects of the electricity crisis are ones Californians seem
to be willing to live with. But they worry that will not be the case much
longer.
Eleven percent said they had been inconvenienced "a great deal" by blackouts.
But looking toward the summer, 34 percent said they expected blackouts to be
a major inconvenience.
Likewise, 19 percent said the electricity rate increases averaging 10 percent
that have taken effect have been a very serious problem for them. If rates
were to go up another 10 percent, 36 percent would regard that as a serious
problem.
Opinion is divided over the merits of recent rate increases approved by the
state Public Utilities Commission. Forty-one percent called them justified
and 52 percent called them unjustified.
"It's not overwhelmingly panned, which I suppose is about as well as could be
expected on an issue like this," said Mark DiCamillo, associate director of
the Field Poll. "It's almost like a tax increase. The public doesn't want it;
it's just whether they think it's justified or not."
Looking ahead, 28 percent say blackouts are the greatest threat posed by the
electricity crisis. But more than twice as many, 67 percent, say they are
more concerned about escalating electricity bills.
By a significant ratio, 61 percent to 34 percent, Californians believe
additional conservation measures by all electricity users can eliminate the
need for summer blackouts.
But when it comes to their own electricity consumption, they say they already
have cut back significantly and can't do much more.
Californians say they have reduced their household electricity usage by an
average of 8 percent. They said they could cut back by another 4 percent in
their homes without causing serious problems.
"If the state is looking and the governor is looking for redoubled efforts,
it's going to be painful because the public thinks we can do a little bit
more, but not a lot," said DiCamillo.

Governor told to try seizure in power war

By Philip J. LaVelle
UNION-TRIBUNE STAFF WRITER
May 19, 2001
A major San Diego business group urged Gov. Gray Davis yesterday to take
emergency steps in the energy crisis, including seizing power plants -- an
action the governor said may be in the cards.
Davis met over lunch for nearly two hours with members of the San Diego
Building Owners and Managers Association, overseers of about 250 commercial
properties here.
The meeting, at the University Club at Symphony Towers downtown, was closed
to the media.

In remarks to reporters later, Davis repeated his hard line against
out-of-state energy producers, relating a threat made to a dozen power
executives in a private meeting May 9.

"I told the generators face to face, as close as I am to you .?.?.
'Gentlemen, you are going to lose your plants, and I'm going to sign a
windfall-profits tax, unless you help us get through this summer without
blackouts and without staggering prices.'?"
Davis also said he told them: "You know you've been ripping us off, acting in
a predatory manner. If you do it this summer, you leave me no choice but to
take your plants and sign a windfall-profits tax. So the ball is in your
court, gentlemen."
Building association executive Craig Benedetto said the group had "a frank
exchange" with Davis. "We want to do our fair share (on conservation), but
we're also concerned about the supply side," he said. The group "strongly
urged him to use his emergency powers to do whatever is necessary, including
seizing plants."
Association President Cybele Thompson said Davis asked for a string of
conservation measures. Yet some cannot be implemented without state
intervention, she said. For example, Davis urged that air-conditioning
thermostats be set at 78 degrees, but "a lot of our leases don't permit it,"
she said.
While in San Diego, Davis received an honorary doctor of science degree from
Scripps Research Institute.

Head of PUC unveils evidence of power plant manipulation

ASSOCIATED PRESS
May 19, 2001
LOS ANGELES ) The head of the California Public Utilities Commission provided
a state Senate committee with evidence showing three power generators reduced
electricity production and then benefited from the resulting high prices.
While testifying before the committee Friday, PUC President Loretta Lynch
displayed charts that tracked electricity prices and power generation at
three plants on a single day last November.
According to the graphs, after the plants reduced production during the
middle of the day, the state was forced to declare two separate power
emergencies which indicate electricity reserves had fallen seriously low.
After the shortfall in supply helped cause a spike in prices, the companies
operating the three plants suddenly increased their electricity production to
almost full capacity, allowing them to capitalize on the much higher rates.
"We certainly see a pattern," Lynch told the committee, which is
investigating alleged manipulation of the state's wholesale power market by
energy suppliers. "Many generators are playing on their experience and
playing, to an extent, California."
Maintenance records reviewed by investigators show that there were no valid
reasons for the plants to cut back production, Lynch said.
She would not identify the power plants involved, however, Lynch did say that
they are owned by at least two companies.
Sen. Joseph Dunn, who heads the special committee investigating alleged
market manipulation, said Lynch's testimony, on its face, is "very damning."
He said his committee has uncovered additional preliminary evidence showing
that several power companies have allegedly engaged in similar behavior.
During a break in Friday's hearing, a spokeswoman for a trade group of major
power suppliers told the Los Angeles Times that there have been no
coordinated efforts to shrink supplies to increase profits.
"There has been no collusion," said Jean Muoz of the Independent Energy
Producers Association.
The PUC and state Atty. Gen. Bill Lockyer are jointly investigating the
exorbitant wholesale power prices that have cost California billions and
brought major utilities to financial ruin.

State to Issue Warnings of Power Outages
Electricity: Cal-ISO says it will try to give residents and businesses
24-hour notice of probable blackouts.

By MIGUEL BUSTILLO and NANCY VOGEL, Times Staff Writers

?????Californians will hear an expanded forecast on their morning commutes
this summer, courtesy of the energy crisis: "The 405 Freeway is jammed,
there's a slim chance of showers, and oh, by the way, there's a 50%
likelihood of blackouts."
?????By the end of this month, the California Independent System Operator,
the agency that manages the state's power grid, expects to issue 24-hour
forecasts generally detailing when and where blackouts can be expected.
?????It is also piecing together a high-tech system to give businesses,
government officials and the public at least a half-hour notice of a probable
blackout in their area.
?????Just how those notices will be issued remains somewhat up in the air,
but Cal-ISO is talking with private companies capable of notifying more than
10,000 customers a minute via fax and phone, and millions a minute via
wireless communications such as pagers.
?????Cal-ISO assembled the plan after complaints from businesses,
particularly those in the Silicon Valley, that last-minute blackouts were
costing California millions. The plan also responds to growing political
pressure for the public to be kept informed of the barrage of outages that is
expected to darken the state this summer because of insufficient supplies of
electricity.
?????If Californians' electricity use pattern is similar to last year's,
Cal-ISO has projected, the state could suffer 34 days of blackouts, making
increased notification crucial.
?????With a shortage of hydroelectric power imports from the drought-stricken
Pacific Northwest, and no new power plants coming online until July, the
agency calculates that there will be a supply-demand gap in June of 3,700
megawatts--enough power to supply 2.8 million homes. A national utility
industry group painted a more dire scenario last week when it predicted that
California will experience up to 260 hours of blackouts this summer.
?????"The weather report and traffic report are good analogies; people know
they are not 100% accurate, but if [a blackout] really means a lot to them,
they will check in," said Mike Florio of the Utility Reform Network, who
serves on the Cal-ISO board.
?????Details remain sketchy, and the programs may be altered when the board
meets Thursday. But a Web page called "Today's Outlook" on the agency's
Internet site, www.caiso.com, will be created to illustrate, hour by hour,
how much electricity is available during a 24-hour period and whether there
is a predicted surplus or shortfall.
?????Media outreach will be expanded to provide news bulletins on electricity
conditions a day in advance. They will not only include demand projections
and the effects of weather, but they also will define the level of emergency
that is expected.
?????A "power watch" will be sounded during stage 1 and stage 2 shortages,
and a more serious "power warning" if there is a 50-50 chance of a stage 3,
which often results in blackouts. (Stage 1 emergencies occur when power
reserves drop below 7%, stage 2 5% and stage 3 1.5%.)
?????Most important, Cal-ISO is pledging to provide 30-minute notice of
probable blackouts to people in the areas served by Pacific Gas & Electric,
Southern California Edison and San Diego Gas & Electric, among others. In
addition to giving the warnings on the Internet and through the mass media,
Cal-ISO will sound alarms to select e-mail addresses and pager numbers on
"blast lists," or massive computer databases that it will assemble.
?????"The technology is there. This is a war California is in, and we should
be deploying high-tech solutions," said Carl Guardino of the Silicon Valley
Manufacturing Group, the Cal-ISO board member who had been pushing hardest
for better notification. "Every time California goes black, the economy sees
red."
?????Guardino said that businesses and public agencies are now receiving just
two- to six-minute warnings before blackouts, not nearly enough to react.
?????"A two-minute warning may be sufficient in a football game, but it is
insufficient to protect California businesses and the public," he said.
?????Though businesses and government agencies are expected to make the most
of the warnings, Florio said residents also will benefit.
?????"It will be more of a challenge to get the information to individual
homeowners, but if someone works at home, and sets it up to get an e-mail
notice, they can take advantage," he said.
?????In other energy news Monday, the woman in charge of paying California's
power bills warned that a $13.4-billion bond issue to cover electricity
purchases will be insufficient and that the state will have to borrow $4
billion more before it runs out of cash in February.
?????Calling a news conference in the capital, state Controller Kathleen
Connell questioned the key assumptions underpinning Gov. Gray Davis'
financial plan for overcoming the energy crisis. The plan assumes the $13.4
billion in bond sales will repay state coffers for electricity purchases and
cover future power buys for the next two years.
?????Connell's opinion is notable because, as the state's chief check writer,
the independently elected Democrat is privy to information about the prices
the state is paying for electricity bought on the spot market and through
long-term contracts--data that Davis has largely kept secret.
?????Davis' advisors and Department of Finance officials dispute Connell's
warnings.

Businesses May Seek Blackout Exemption
Energy: PUC will accept new applications, which would be granted only to
minimize danger to public health and safety.

By NANCY RIVERA BROOKS, Times Staff Writer

?????The San Francisco Giants want one, and so presumably do most other
California businesses: an exemption from the rolling blackouts that experts
say are all but certain this summer.
?????But whether operating on a baseball diamond or in more mundane venues
far from the bright lights of pro sports, few businesses will be granted such
waivers--and then only to minimize threats to public health and safety--under
a process detailed Monday by the California Public Utilities Commission.
?????"It would be nice in a perfect world if we could exempt everyone who
asks from rolling blackouts. Unfortunately, we can't do that," Commissioner
Carl A. Wood said in announcing the procedure for applying for blackout
exemptions.
?????The PUC already exempts a fairly lengthy list of those whose services
are needed to protect public health and safety, including fire and police
stations and acute-care hospitals.
?????Energy experts are predicting blackouts this year ranging from a total
of 20 hours at the most optimistic to 200 hours or more, based on such
factors as historic patterns of electricity usage, forecasts for hot weather
and expectations of diminished hydroelectric imports from out of state.
?????Any new business exemptions, which would start no sooner than August,
would be granted only to minimize danger to public health and safety.
?????That means a business would not be granted an exemption from outages
just because it fears revenue loss, Wood said at a Los Angeles news
conference.
?????Residential customers will be unable to apply for the exemptions.
Nevertheless, many already enjoy blackout protection by quirk of location--if
they share a circuit with an exempt customer--or if they are customers of the
Los Angeles Department of Water and Power and municipal utilities such as
those in Glendale and Burbank that do not rely on the statewide power grid
for electricity.
?????The PUC can approve only a limited number of blackout exemptions, Wood
said, because to maintain system reliability, a pool of customers
representing at least 40% of total system load must be available for rolling
power outages.
?????Statewide, about 50% of system load is exempt from blackouts in the
territories served by the three big investor-owned utilities: Edison
International's Southern California Edison, PG&E Corp.'s Pacific Gas &
Electric and Sempra Energy's San Diego Gas & Electric.
?????"This is not an exercise in determining who is most affected
economically by rolling blackouts. Everyone is affected economically by
rolling blackouts," Wood said.
?????The PUC has set up a Web site, www.rotating-outages.com, and toll-free
number, (888) 741-1106, for businesses seeking information and applications.
The deadline to apply is 5 p.m. June 1.
?????Completed applications will be reviewed by an engineering consulting
firm, Exponent Inc. of Menlo Park, Calif., which will develop a priority list
based on risk to public health and safety.
?????Only businesses that have applied would be considered for exemptions,
Wood said, explaining that the commission will not excuse entire industries.
?????The PUC is expected to vote on the exemptions by Aug. 2.
?????Wood said several companies already have applied, including the
operators of Pacific Bell Park in San Francisco, home of the Giants major
league baseball team.

Legislators Set to Sue Federal Energy Agency
Power: Lawmakers try a new idea: a lawsuit arguing that blackouts pose danger
to people, law enforcement and even water supply

By DAN MORAIN, Times Staff Writer

?????SACRAMENTO--Legislative Democrats today will sue federal energy
regulators, charging that their inaction threatens elderly people in nursing
homes, children in day care centers, law enforcement and its ability to fight
crime, and the state's drinking water supplies.
?????Rather than focus on record wholesale energy costs, the lawsuit takes a
new tack, homing in on the threat to health and safety posed by California's
energy crisis and the blackouts likely this summer.
?????A draft of the suit seeks to force the Federal Energy Regulatory
Commission to set "just and reasonable" wholesale power rates as a way of
ending the crisis before blackouts occur. The action is being filed by
veteran trial attorney Joe Cotchett on behalf of Senate President Pro Tem
John Burton (D-San Francisco), Assembly Speaker Bob Hertzberg (D-Sherman
Oaks), and the city of Oakland.
?????"A crisis of unprecedented dimensions is already taking shape in
California," the draft says. "The public health, safety and welfare of the
state's 34 million residents is in jeopardy due to the tragic consequences of
rolling blackouts and punitive prices."

?????Suit Says Blackouts Pose Threats
?????Until now, most California officials, including Gov. Gray Davis, have
been urging that the regulatory commission cap wholesale power prices as a
way of limiting costs to the state, which has spent more than $6 billion
buying electricity since January.
?????In the lawsuit, Cotchett will be arguing that while higher bills will
stretch the budgets of people on fixed incomes, frail elderly people "are
left to wonder if their oxygen tanks, drip IVs, dialysis machines and
electricity-powered therapeutic beds will respond when they are needed."
?????"Rolling blackouts represent more than just an annoyance for the men,
women and children with disabilities," the suit says. "They represent an
imminent threat to life, health and independence."
?????Cotchett said the suit will be filed in the U.S. 9th Circuit Court of
Appeals in San Francisco, bypassing the federal trial court. Cotchett said
the circuit court has direct jurisdiction over FERC.
?????Joining Cotchett will be Clark Kelso, a professor at McGeorge Law School
in Sacramento who briefly was insurance commissioner last year after Chuck
Quackenbush resigned. Kelso said he initially was skeptical that lawmakers
had legal standing to sue. But after Cotchett spoke with him, Kelso said he
became convinced the suit had merit.
?????"Let's face it," said Kelso, a Republican, "this is the single most
important issue that the state faces for the next six months."

?????Watching the Water Supply
?????The suit cites warnings from governmental agencies about the
implications of blackouts, including one the state Department of Health
Services issued earlier this month to public water agencies statewide. The
warning contains a sample notice that local water authorities should give to
consumers.
?????"If the water looks cloudy or dirty," the warning says, "you should not
drink it." The warning suggests that if people are concerned about water
quality, they can boil it or add "eight drops of household bleach to one
gallon of water, and let it sit for 30 minutes."
?????Most water agencies have back-up generators. But the suit says that "if
an agency's water treatment facilities are hit by a power outage, a two-hour
blackout can result in two-day interruptions in providing safe drinking water
because of time needed to bring equipment back online and flush potentially
contaminated water from the system."

California will forecast blackouts and warn the public
JENNIFER COLEMAN, Associated Press Writer
Tuesday, May 22, 2001
,2001 Associated Press
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/22/state1
651EDT7299.DTL&type=news
(05-22) 00:05 PDT (AP) --
Eds.: PMs.
SACRAMENTO, Calif. (AP) -- The operator of California's electricity grid is
offering a partial answer to a major consumer complaint, planning to give the
public a half-hour's warning before shutting off the lights.
Beginning May 30, the Independent System Operator also plans to issue
warnings similar to weather advisories 24 hours before expected blackouts.
Up to now, the agency has refused to give more than a few minutes' warning,
saying it did not want to alarm people when there was still a chance that a
last-minute purchase of power could stave off blackouts. The utilities have
also resisted giving warnings, saying they did not want to tip off burglars
and other criminals.
"Definitely, it's a good idea," said Shirley Starr, a racetrack employee in
the Los Angeles suburb of Rosemead. "If I know it's going to happen, I won't
defrost the refrigerator or something."
Like some business customers and consumer groups, she wondered if 30 minutes
warning would be enough.
"A lot of people, if they are at work, a half hour isn't going to do any
good," Starr said.
"I think it should be more than 30 minutes," said George Aguilar, an animal
control officer in El Monte. "It should be at least eight hours."
Californians have been warned that rolling blackouts could be a regular
feature this summer. The state's power system, crippled by a botched effort
at deregulation, has been unable to produce or buy enough electricity to
power air conditioners on hot days.
The rolling blackouts move from neighborhood to neighborhood in a sequence
that is determined by the utilities and is difficult or impossible for the
public to predict. The outages last 60 to 90 minutes and then skip to another
neighborhood.
Because of the lack of notice, the six days of rolling blackouts to hit the
state so far this year have led to pileups at intersections suddenly left
without stoplights, trapped people in elevators, and caused business losses
by bringing production lines to a halt. People with home medical equipment
like oxygen fret they that they will be cut off without warning.
The new plan by the ISO borrows from the language of weather forecasters: It
will issue a "power watch" or "power warning" that will give notice the grid
could be headed toward blackouts.
The ISO will issue 30-minute warning to the media and others before any
blackouts actually begin. However, the ISO will not say what neighborhoods
will be hit.
"It's better than no notice," said John Handley of California Independent
Grocers.
He said stores could use the warning to rush customers through checkout and
even move items to cold storage if necessary.
"Once the power goes out, we can't ring anyone up," Handley said.
Many small factories have production lines that cannot be interrupted without
risk to an entire lot of whatever they produce, said Brad Ward, president and
chief executive of the Small Manufacturers Association of California.
For example, a manufacturer might be using acid to etch something on a piece
of metal. If power is shut off suddenly, the acid might not be removed in
time and the piece would be ruined.
"This is really, really good news," Ward said.
The ISO said it also is looking into high-tech ways it can get word of an
impending blackout quickly to homeowners and businesses through mass e-mails,
faxes, automated phone calls and pager messages.
On the Net:
California Independent System Operator: www.caiso.com
,2001 Associated Press ?

Developments in California's energy crisis
The Associated Press
Tuesday, May 22, 2001
,2001 Associated Press
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/22/state0
347EDT7321.DTL&type=news
(05-22) 00:47 PDT (AP) --
Developments in California's energy crisis:
MONDAY:
* No power alerts as reserves stay above 7 percent.
* State power grid operators say they'll soon be giving residents and
businesses 30 minutes notice before they order rolling blackouts. The
Independent System Operator will also be issuing a daily energy forecast with
projected supply and demand, and the likelihood of blackouts. Several
lawmakers say they'll introduce plans that would give Californians even more
notice of blackouts -- from one day to one month.
* The state auditor releases a report on the state's energy crisis, saying
previous estimates that the state could avoid blackouts this summer are
overly optimistic. The Bureau of State Audits also criticized the California
Public Utilities Commission, saying the commission hasn't responded to the
crisis by expediting transmission line project.
* Gov. Gray Davis is in Chicago, speaking with city officials there about
blackout procedures.
* Davis' energy advisers say that the state is meeting its energy goals,
despite doubts raised by Controller Kathleen Connell and other critics.
Connell questioned whether the state can buy enough electricity cheap enough
to avoid borrowing more than the $13.4 billion approved by state lawmakers.
But Davis adviser Joe Fichera says the state has signed more long-term power
contracts that will help keep prices low.
* Davis' office announces that an eighth "peaker" power plant has been
licensed. The 135-megawatt plant in Gilroy is expected to be online by the
end of September. The California Energy Commission says that more than 10,000
megawatts of new electricity since April 1999.
* The California Energy Commission also announces increased rebates for
renewable energy systems -- such as solar panels, fuel cells or small wind
generation. Rebates of up to 50 percent on the system are available for
residential, commercial, industrial or agricultural users.
* Republican legislative leaders criticize Davis for spending tax money on a
political communications firm that previously advised Vice President Al Gore.
Davis is hiring Gore's former press secretary and deputy campaign manager for
six months at $30,000 a month to coordinate the governor's communications on
energy issues. Senate GOP Leader Jim Brulte and Assembly Republican Leader
Dave Cox say Davis should pay them with campaign funds, not taxpayers' money.
* Shares of Edison International closed at $11.23, down 51 cents. PG&E Corp.
dropped 48 cents to close at $11.16.
WHAT'S NEXT:
* Davis' representatives continue negotiating with Sempra, the parent company
of San Diego Gas and Electric Co., to buy the utility's transmission lines.
* Davis is scheduled to sign a bill Tuesday that would expedite power plant
siting.
* Republican Assemblyman Mike Briggs plans to introduce a bill that would
allow people to know a month ahead if they will be affected by rolling
blackouts.
THE PROBLEM:
High demand, high wholesale energy costs, transmission glitches and a tight
supply worsened by scarce hydroelectric power in the Northwest and
maintenance at aging California power plants are all factors in California's
electricity crisis.
Edison and PG&E say they've lost nearly $14 billion since June to high
wholesale prices the state's electricity deregulation law bars them from
passing on to consumers. PG&E, saying it hasn't received the help it needs
from regulators or state lawmakers, filed for federal bankruptcy protection
April 6.
Electricity and natural gas suppliers, scared off by the two companies' poor
credit ratings, are refusing to sell to them, leading the state in January to
start buying power for the utilities' nearly 9 million residential and
business customers. The state is also buying power for a third investor-owned
utility, San Diego Gas & Electric, which is in better financial shape than
much larger Edison and PG&E but also struggling with high wholesale power
costs.
The Public Utilities Commission has approved average rate increases of 36
percent for residential customers and 38 percent for commercial customers,
and hikes of up to 49 percent for industrial customers and 15 or 20 percent
for agricultural customers to help finance the state's multibillion-dollar
power buys.
,2001 Associated Press ?

How blackout warning plan works
The Associated Press
Tuesday, May 22, 2001
,2001 Associated Press
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/22/state0
347EDT7320.DTL&type=news
(05-22) 00:47 PDT (AP) --
Details of plan by California Independent System Operator to warn of
impending blackouts:
* When demand is high, ISO will issue forecasts 24 hours in advance giving
projections of peak demand, supply and weather outlook. Notice will be given
to the media, emergency-services agencies and the utililities.
* A "Power Watch" will be issued when it is likely the grid will reach Stage
One, when the system is within 7 percent of running out of power, or Stage
Two, when the system is within 5 percent of running out of power.
* A "Power Warning will be issued when there is at least a 50 percent chance
of a Stage One alert -- when demand is within 11/2 percent of the available
supply.
* 30 minutes before ordering the utility companies to trigger rolling
blackouts, the ISO will put out a "notice of probable load interruption."
Notice goes to media and utilities, and is posted on the agency's Web site,
www.caiso.com. If power is found, or if the warning prompts enough
conservation, blackouts can still be avoided.
* Plan takes effect May 30.
How utilities tell customers which areas will be blacked out:
* Pacific Gas & Electric bills presently show customers which outage "block"
they are in. Blocks are blacked out in a specific order that customers can
find on company's Web site. PG&E typically gives the block numbers in
announcing a rolling blackout.
* Southern California Edison plans to start a similar system of informing
customers their "outage group number" by June 3.
* PG&E has pager, e-mail and automated telephone notification systems for big
power users and residential customers on life-support equipment.
,2001 Associated Press ?

GILROY
Davis licenses 8th emergency power plant

Tuesday, May 22, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
NL188945.DTL&type=news
Gov. Gray Davis announced yesterday the licensing of the eighth power plant
-- a 135-megawatt site designed to meet summer demand -- under a 21-day
emergency review he ordered three months ago.
Calpine Corp. plans to build the plant -- consisting of three 45-megawatt
gas-fired turbines -- next to the firm's existing cogeneration power plant in
Gilroy. The plant should be producing electricity no later than Sept. 30.
Calpine has guaranteed the annual sale of 2,000 hours of generation from the
"peaker" project under contract to the California Department of Water
Resources.
To swiftly beef up the state's power production during the peak summer
demand, Davis signed the February order directing the California Energy
Commission to expedite review of the peaker plants -- small, temporary,
simple- cycle generators that can be quickly put into operation. The eight
plants licensed so far will add a total of 636 megawatts to the grid this
summer.

PAY UP: Rate increases to hit more users than first reported, PUC says
David Lazarus, Chronicle Staff Writer
Tuesday, May 22, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N27807.DTL&type=news

State regulators admitted yesterday that almost two-thirds of Northern
California power customers will be hit with higher electricity rates,
contradicting an earlier claim that half of all consumers would be untouched
by rising bills.
Meanwhile, officials and utility executives said bills could go even higher
if lawmakers try to reduce the number of households suffering rate hikes. A
preliminary vote on the matter by the state Senate Energy Committee is
scheduled for today.
In adopting the biggest rate increase in California history, the Public
Utilities Commission told consumers that half of all residential ratepayers
would be unaffected by higher bills.
This is roughly the case for customers of Southern California Edison, but
Pacific Gas and Electric Co. said yesterday that at least 65 percent of its
residential customers will experience higher bills as of June 1.
"I never had a great deal of confidence that 50 percent of people would be
exempt from rate increases," said PUC member Carl Wood. "I was surprised by
the 50 percent number."
Nevertheless, Wood was one of three Democratic appointees on the five- member
commission who voted in favor of the rate plan, which included a tiered
system under which the heaviest power users would face the steepest increases
in monthly bills.
Residential customers who can stay within 130 percent of so-called baseline
usage would experience no rate increases.
"We've been sold a false bill of goods," said Medea Benjamin, head of the San
Francisco consumer advocacy group Global Exchange. "The PUC made a huge point
of saying that half of all people would be unaffected. They can't promise one
thing and then do something else."
RUSH JOB
Regulators admit they were in a hurry to get a rate system adopted in time
for PG&E and Edison to begin collecting the higher fees in their June bills.
For this reason, they went ahead with last week's vote even though it was
apparent that less than half of all residential ratepayers would be able to
stay within 130 percent of baseline, as outlined by the tiered system.
"If we wanted to do it perfectly, we would never have gotten it done," Wood
said. "We can't get the baseline adjusted before the end of the summer, even
at an accelerated pace."
Because electricity rates have been linked to baseline usage, this once-
esoteric calculation has taken center stage in California's energy mess.
BASELINE USAGE
The baseline usage figure -- included on PG&E bills -- was devised nearly 20
years ago to define the amount of fuel "necessary to supply a significant
portion of the reasonable energy needs of the average residential customer,"
according to the Public Utilities Code.
It includes several variables, such as climate, time of year and type of
fuel.
However, the last time regulators tabulated baseline numbers was in 1994,
meaning that the figures on most people's bills no longer reflect actual
power consumption.
"This was pre-computers, pre-Internet and pre- a lot of other things that are
now in the house," said Richard Bilas, a Republican PUC member who opposed
last week's rate hike.
The average baseline for most households is about 250 kilowatt hours per
month, according to the 1994 numbers. To be exempt from rate hikes, a
household thus would need to use no more than 325 kilowatt hours.
However, regulators and utilities now say that actual power usage for the
typical home is at least 500 kilowatt hours per month -- well above most
people's baseline amounts.
"It's not possible to stay within 130 percent of that," Bilas said. "I know I
can't do it."
NEW BASELINE CRITERION
With regulators set to begin re-examining baseline numbers Thursday, the
Senate Energy Committee is seeking ways to make the tabulation more equitable
by adding a new criterion to the figure: household size.
Now, a family of five with computers, electronic games and almost round-the-
clock power consumption would have the same baseline as the bachelor living
next door who is rarely home.
That disparity would be addressed by a bill to be submitted today by Sen.
Jackie Speier, D-Hillsborough, who wants household size to be a factor in
determining baseline, with the baseline limit rising in proportion to the
number of people in the residence.
"Baseline is a totally unfair measure of the number of people in a
household," she said. "Families are severely impacted."
Robert Herrell, Speier's staff director, said state authorities would rely on
"self-certification" for each household to accurately report its number of
occupants -- essentially, the honor system.
"The last thing you want to do is create baseline police," he said.
"Hopefully, people wouldn't game the system."
But Akbar Jazayeri, director of revenue and tariffs for Southern California
Edison, said that even if regulators succeed in adjusting baseline figures to
better reflect household size and usage levels, this only would increase the
number of ratepayers who can stay within 130 percent of revised limits.
"That means more people would be exempt from rate increases," Jazayeri
observed. "There would be less revenue from ratepayers, so you would have to
get other people to make up for it."
In other words, another rate increase.
"We'll need another rate increase if we mess around with baseline," warned
the PUC's Bilas.

E-mail David Lazarus at dlazarus@sfchronicle.com.
Who uses how much
Most PG&E residential customers do not stay within 130 percent of baseline
power usage, which means they will be subject to a rate increase.
-- Customers as a  percentage of baseline use
   Up to 130%       35%
   Up to 200%       23%
   Up to 300%       22%
   More than 300%   20%
Source: PG&E
Chronicle Graphic

Energy crisis not real, state's residents say
But poll results show most expect more blackouts
Carla Marinucci, Chronicle Political Writer
Tuesday, May 22, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N175993.DTL&type=news

The overwhelming majority of Californians say the state's power crisis is
"very serious" and blame the big energy companies for creating and
manipulating shortages, results of a new Field Poll show.
"In the public's view . . . this is a manufactured crisis -- not a real
crisis," Mark DiCamillo, director of the statewide Field Poll, said
yesterday. "That cynicism permeates a lot of things. . . . The public is not
sold on the explanations as to why we're in the crisis we're in."
The poll results, released yesterday after a year of energy woes, underscore
Californians' increasing concerns about the energy crisis and their growing
list of personal conservation efforts to deal with it. The poll of 1, 015
California adults was conducted May 11 to Sunday.
CONSUMPTION, CONSERVATION
In what may be the first such tally of statewide conservation efforts,
California residents said they reduced their power consumption by an average
of 8 percent -- an effort motivated by the energy crisis.
The new poll results also dramatized that Californians are "very attentive"
to news reports and information about the energy crisis as a way of bracing
themselves for the effects of increased rates and power outages.
But so far, it is not the politicians who are the object of their wrath -- it
is big energy, DiCamillo said.
"They're the bad guys," he said. "But (in the public's view) no one has been
able to stop them. No one is winning this."
The findings of the latest Field poll:
-- Three quarters of the Californians polled deemed the energy crisis "very
serious," and 20 percent said "somewhat serious" -- compared with just 5
percent who said they didn't see it as a problem. That is similar to a
California Public Policy Institute survey released Monday that showed 82
percent of those polled believe the energy crunch is a "big problem."
-- Despite the widespread media coverage of the effects of blackouts, many
Californians said they were not personally inconvenienced, the poll results
showed. Just 11 percent reported being inconvenienced "a great deal" by
blackouts, and another 16 percent say they have been affected "some" by the
problems, compared with 16 percent who said they'd had "a little"
inconvenience, and 11 percent who said "none." Almost half said they had not
experienced a blackout at all.
-- One-third said they expected to be inconvenienced "a great deal" by
blackouts during this coming summer, the poll showed.
-- Only 1 in 5 residents say rate increases have so far created serious
problems for them -- and nearly half say they haven't been affected at all,
the poll showed. But most Californians say they are fully aware new rate
increases have been passed by the Public Utilities Commission, and "you can
see the pain level goes up fairly dramatically," said DiCamillo. "They're
bracing themselves for the worst."
WHAT LIES AHEAD
DiCamillo said the poll results confirm how deeply Californians fear what may
lie ahead in the energy arena.
"Up to this point, (rate increases and blackouts haven't) really touched a
strong nerve, but they really feel it's coming," he said. "They don't know
how it will affect them. . . . They're looking at the politicians as if
they're impotent in the face of these changes."
The Field Poll has a margin of error of plus or minus 3.2 percentage points.
Tell us what you think -- What are your suggestions for saving energy? Send
your best tips to Energy Desk, San Francisco Chronicle, 901 Mission St., San
Francisco, CA 94103; or put your ideas in an energy-efficient e-mail to
energysaver@sfchronicle.com.

E-mail Carla Marinucci at cmarinucci@sfchronicle.com
Field Poll
 Californians' reactions to energy crisis
   More than half of Californians surveyed this month by the Field Poll say
the energy crisis is more a product of the energy companies' efforts to drive
up rates than a real shortage. Despite that view, 85 percent say they're
trying to conserve energy.
-- Which is closer to your view - that the current electricity shortage is
real or is an attempt by energy companies to increase rates?
               Attempt to increase rates   Real shortage  No opinion
May survey             59%                     36%           5%
January survey         57%                     36%           7%
May survey results by household income:
  Less than $20,000    54%                     37%           9%
 $20,000 to $40,000    62%                     34%           4%
 $40,000 to $60,000    59%                     36%           5%
 $60,000 to $80,000    57%                     37%           6%
  More than $80,000    55%                     42%           3%
-- Degree to which residents say they have cut back on electricity usage
since
the start of energy crisis: Percentage of residents who . . .
Have not been able to conserve   15%
Have cut back electricity use (median percentage cutback 8%):
    5%            17%
   10%            25%
   15%            14%
   20%            13%
   More than 20%  11%
.
Can't estimate % of savings 5%
The results are based on a telephone survey conducted May 11 to 20 by the
Field Institute. The survey of 1,015 California adults was completed in
English and Spanish using random digit dialing methods. This poll has a
margin
of error of plus or minus 3.2 percentage points.
Chronicle Graphic

Power plant 'ramping' to be probed
State senators also expected to file suit, charging federal regulators with
failing to ensure fair rates Christian Berthelsen, Chronicle Staff Writer
Tuesday, May 22, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N151793.DTL&type=news
State legislators said yesterday that they will investigate charges power
companies manipulated electricity prices by repeatedly ramping the output of
their plants up and down and creating artificial shortages.
Sen. Joe Dunn, D-Santa Ana (Orange County), who heads a special committee
reviewing energy prices, called the "ramping" allegations, first disclosed in
The Chronicle on Sunday, "outrageous acts of manipulation."
Dunn said that even if the practices did not violate current law, legislation
could be drafted to make such acts illegal in the future.
"We're looking at it, yes, from the point of view of civil or criminal
statutes that may exist but also whether legislation should be introduced to
render it a violation for future such acts."
Dunn's committee already has been investigating charges that power generators
"gamed" the wholesale energy market to boost their profits.
The Chronicle reported Sunday that power companies used a complex tactic to
alter the output of their plants, sometimes several times within an hour.
Sources who work in the plants said the ploy enabled the companies to drive
up the prices they receive for electricity. The firms avoided detection by
still meeting the terms of their contracts, which required them to supply a
certain amount of power each hour. The sources said the tactic greatly
contributed to deteriorating physical conditions at the plants, leading to
the record level of outages now plaguing California plants.
The senate committee, which convened in March after The Chronicle reported
that power companies had overstated the growth in demand for electricity in
California, has obtained confidential bidding and generation data for power-
generating companies. Dunn said the data will be analyzed to determine which
plants employed the ramping tactic. He added that the issue would be examined
in a public hearing in the coming weeks.
Meanwhile, pressure continued to mount on generating companies that drove
electricity supplies through the roof during the past year.
Sources said the California Public Utilities Commission, which is
investigating allegedly unnecessary plant shutdowns, has narrowed its focus.
It is targeting several plants that had no apparent defects yet went offline
during periods when prices were rising because of limited electricity
supplies.
Commissioner Jeff Brown said the names of these plants are under court seal.
However, Dow Jones reported yesterday that one of them was a San Diego-area
plant co-owned by Dynegy Inc. of Houston and NRG Inc. of Minneapolis. Another
was a Pittsburg plant owned by Mirant Corp. of Atlanta. The companies denied
the allegations.
On another front, Sen. John Burton, D-San Francisco, and Assembly Speaker
Robert Hertzberg, D-Sherman Oaks (Los Angeles County), were expected to file
a lawsuit this morning against the Federal Energy Regulatory Committee for
failing to carry out its stated duty of ensuring "just and reasonable"
electricity rates.
"Their central failing is that they don't follow the law," Burton said in an
interview. "Either they're letting their friends within the industry or their
ideology get in the way of their public responsibility."
The California attorney general's office also is pressing forward with an
investigation into the practices of wholesale power companies.

E-mail Christian Berthelsen at cberthelsen@sfchronicle.com.
Offline firms
   Reliant Energy had more outages during a 39-day period examined by The
Chronicle than any other power provider. Outage numbers were calculated by
multiplying the number of a company's generators that were either fully or
partially offline by the number of days they were out.
   Firm     Megawatts
   Reliant    319
   Southern   310
   AES        278
   Duke       261
   PG&E       249

Half-hour notice of blackouts planned
FAST ALERTS: Power grid operator may send voice, e-mail messages
Lynda Gledhill, Chronicle Sacramento Bureau
Tuesday, May 22, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N121634.DTL&type=news

Sacramento -- Californians will receive 30 minutes' warning that blackouts
may be imposed -- enough time, it is hoped, to get out of the elevator or
through a dangerous intersection, the state's power grid managers said
yesterday.
The California Independent System Operator also will provide a daily power
forecast 24 hours in advance so residents and businesses can plan for
blackouts the same way people prepare for severe storms.
"We want a system that is proactive," said Carl Guardino, an ISO board member
and president of the Silicon Valley Manufacturing Group. "When the last few
rolling blackouts hit there was as little as two minutes' warning. Two
minutes may be fine in a football game, but it's not fine for California's
economy or safety."
ISO officials also said they are examining high-tech ways of quickly
spreading the word about impending blackouts to homeowners and businesses
through mass e-mails, faxes, automated phone calls and pager messages.
The plan, detailed in a report issued yesterday, still falls far short of
other proposals being pushed in the Legislature. Lawmakers have suggested
scheduling blackout days months in advance and having California join with
other Western states to form a "buyer's cartel" that would refuse to pay for
power when prices become too high.
"It's not the report I was expecting, but 30 minutes of notice is certainly
better than two," said Sen. Debra Bowen, D-Marina del Ray. "No matter how you
slice it, this summer is going to be miserable. The question is whether we
want to have planned misery or unplanned misery."
A spokesman for the California Manufacturers and Technology Association,
which commissioned a recent report that found unplanned blackouts could cost
the state economy $21.8 billion, said the ISO policy changes will be a
tremendous help to many businesses.
"In this electrically unreliable world, any notification manufacturers can
get is good," said Gino DeCaro, a spokesman for the association. "While 30
minutes won't be enough for some, for most manufacturers it will be
sufficient. " The ISO will wait for guidance from the governor and lawmakers
regarding more complicated issues such as the creation of scheduled
blackouts, said Michael Florio, an ISO board member and official at The
Utility Reform Network.
"There are bigger public policy ramifications," Florio said.
The ideas will be discussed in greater detail at an ISO board meeting
Thursday. Stephanie McCorkle, an ISO spokeswoman, said the changes are just
updates of policies already in place.
WARNING OF 'PROBABLE' BLACKOUTS
The 30-minute advance-notification system, scheduled to go into effect early
next month, would warn of "probable" blackouts, including the amount of load
that will have to be curtailed in each service area.
Until now, the agency has refused to give more than a few minutes' warning,
saying it did not want to alarm people when there was still a chance that a
last-minute purchase of power could stave off blackouts. The utilities also
have resisted giving warnings, saying they did not want to tip off burglars
and other criminals.
The ISO also has been working to upgrade its Web site to provide the most
current information about how much electricity is being used and how much is
available. It will also establish a system this summer through which that
information can be sent in an hourly e-mail.
This information may make it easier for larger users of electricity to plan
their operations, said ISO spokeswoman Lorie O'Donley.
Also planned by the ISO is a "Power Watch/Power Warning" system that would
provide a 24-hour notice of high-demand days.
Under the two-tiered system, a "Power Watch" would be declared whenever a
Stage One or Stage Two alert is likely, while a "Power Warning" would be
issued whenever there is at least a 50 percent chance of a Stage Three alert.
With one report suggesting California may see as many as 700 hours of rolling
blackouts this summer, lawmakers are hard at work trying to find ways to make
the outages easier for power customers to cope with.
The idea of a buyer's cartel, the subject of a Capitol hearing today, would
have California -- in partnership with other states -- set a firm ceiling on
what it will pay power producers for electricity this summer -- and not one
dime more.
The idea, which has attracted the support of some key lawmakers and the
cautious interest of Gov. Gray Davis, could potentially curtail the
exorbitantly high prices the state has been paying for electricity.
The trade-off would be the likelihood of more frequent blackouts than if the
state continues to pay any price electricity sellers demand.
The maximum the state would pay would be set by a formula, based on such
things as the cost of natural gas. A reasonable profit for power producers
would be built in, supporters said.
DESIGNATING BLACKOUT DAYS
Meanwhile, Assemblyman Mike Briggs, R-Fresno, will introduce a bill today
that would require the state's utilities and Public Utilities Commission to
designate days for potential blackouts to each block.
For example, a customer located in Block 3 of Pacific Gas and Electric Co. 's
service area could be told in advance that power will be turned off June 5 if
blackouts are needed that day.
"Right now, every day is a potential blackout day," Briggs said. "This way
people would know when their potential days are."
On alert
-- When demand is high, the ISO will forecast peak demand, power supply and
weather 24 hours in advance.
-- A "power watch" will be issued when it is likely the grid will reach Stage
1 (system is within 7% of running out of power) or Stage 2 (system is within
5% of running out of power).
-- A "power warning" will be issued when there is at least a 50% chance of a
Stage 3 alert (demand is within 1.5% of supply).
Who calls a blackout?
Engineers in Folsom at the Independent System Operator keep watch on the
state's power consumption. When they determine that energy reserves have
dipped below 1.5 percent of available capacity, the ISO can order utilities
to start cutting juice. Officials said this week they would give 30 minutes'
notice before blackouts begin. The ISO tells the utilities exactly how much
power to cut.
Q: Who decides who gets blacked out and for how long?
A: That's up to the utilities. PG&E has divided its 4.5 million customers
into 14 blocks; each block is darkened for one to two hours at a time. The
blocks are defined by PG&E's network of circuits rather than by geography.
Thus, neighborhoods in San Francisco, Oakland and Pleasant Hill can be
blacked out simultaneously.
Q: How many users are blacked out at once?
A: Each of PG&E's 14
blocks represents about 550 megawatts of electricity. (A megawatt is enough
electricity to power 1,000 homes.) If PG&E is told to cut more than 550
megawatts, it can shut down two or more blocks at a time. PG&E also can black
out smaller portions within each block if the ISO's requirements are for less
than 550 megawatts.
Q: How is power shut off?
A: This is a straightforward matter of shutting off circuits in a power
substation by computer or sending a crew to flip the switches by hand.
Q: How many days of blackouts have we had this year and how many customers
have been affected?
A: A total of 3,035,000 customers have been blacked out in the six days of
rolling blackouts since Jan. 1, 2001.
Q: Which block of customers will be blacked out next?
A: Some or all customers in Block 1.
Q: How do I know what block I'm in?
A: Look for the words "Rotating Outage Block" followed by a number on your
bill. If it says Block 50, you share an electrical circuit with a hospital,
police station or other "essential service" that is normally exempt from
service cuts.
Q: What should I do when the lights go out?
A: Power experts advise:
-- Turn off all lights and appliances to prevent damage-causing power surges
when service is restored. Leave one light on to indicate when the electricity
is back.
-- Use caution when driving because traffic signals may be out. Treat all
intersections as a four-way stop.
-- To protect food, open refrigerator and freezer doors only when absolutely
necessary.
-- Keep a flashlight and radio with fresh batteries available. If you light
candles, observe the usual safety precautions.
-- If the lights go out, check with neighbors to determine if only your home
is affected. It may be a downed power line or some other problem, in which
case you should alert PG&E or your city electrical bureau.
-- When the power returns, turn on one appliance at a time to prevent power
surges.
-- Don't plug a generator into the wall; when the lights return, it can send
a high-voltage current through the system that can electrocute power workers.
-- Tell children who are home alone to remain calm, to turn off the TV and
computers, and not to use candles.
Sources: PG&E, Chronicle staff
Chronicle Graphic
E-mail Lynda Gledhill at lgledhill@sfchronicle.com.

Time-of-use power pricing may be the answer
Jane Bryant Quinn
Tuesday, May 22, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/B
U225334.DTL&type=news
Most of the rest of the country will soon be catching California's energy
disease. I don't mean blackouts and brownouts. I mean higher electricity
prices, which are all but inevitable.
Retail prices are regulated in most parts of the country. But when utilities
pay more for wholesale power, they have to pass it on. How much prices rise
will depend partly on whether we learn, again, to conserve.
Consumers bought into conservation after the energy shocks of the 1970s and
early '80s. We not only turned down thermostats and insulated the attic, we
embraced government intervention and technological change.
Federal energy standards brought forth more efficient refrigerators and air
conditioners. New building codes made homes and offices less expensive to
heat,
cool and light. Rebate programs helped people buy better lightbulbs and
appliances. Electricity use grew more slowly than the economy did.
But in the late '90s, with prosperity in full swing, demand began catching up
with supply. Consumers stopped worrying about their energy bills. High-tech
businesses gobbled megawatts for lunch.
Utilities and states -- California among them -- closed or scaled back their
conservation programs. We're all free-market maniacs now. The markets were
supposed to create efficiency, unaided.
But they haven't. So while we work out the problems and wait for new plants
to come online, we need to spread the available power around.
Energy conservation needs a big push. The Bush administration has blinders on
when it cuts conservation spending and downplays the need.
But a market-based question has also entered the conservation debate. Would
we save power if it were priced in a different way?
Most consumers don't realize that the wholesale price of power changes at
various times of day. Prices spike when demand is high, say on summer
afternoons, and fall at night when most offices have closed.
But most of us pay a constant price per hour, whether we use expensive hours
or cheap ones. So we have no incentive to conserve power during hours of high
demand.
Market-based pricing is intended to get you to think twice before using power
during those expensive peaks. There are three main approaches to this today:
CHANGING THE FIXED PRICE. Many utilities today charge more in the hot summer
months than in the winter months. Georgia Power goes further -- raising your
summer price as you use energy more. In the winter, your rate for extra
kilowatt-hours declines.
VOLUNTARY TIME-OF-USE PROGRAMS. You pay the most for power during weekday
hours and the least on weekends and overnight. Oregon will introduce a
statewide time-of-use program in October. Niagara Mohawk in Syracuse, N.Y.,
has 4,000 consumers on time-of-use.
Ahmad Faruqui of the industry's Electric Power Research Institute estimates
that a well-designed time-of-use program could cut residential peak demand by
about 2.5 percent. In California, that could reduce energy costs by 12
percent over the summer.
So far, however, these programs haven't persuaded many people to run their
washing machines at night. Saving $20 or $30 isn't worth the hassle, says
Mike O'Sheasy, Georgia Power's manager of product design.
REAL-TIME PRICING. Here, the utility varies your price per kilowatt-hour
during the day, as its own prices change. Using a "smart meter" and "smart
thermostat," you could program your water heater or air conditioner to turn
off automatically during times when power costs the most. Many businesses
already pay on real-time.
How consumers like real-time pricing remains to be seen. Georgia Power tried
it 12 years ago and dropped it.
But Gulf Power in Pensacola, Fla., rolled out newer technology last year and
thinks it has a hit. About 1,500 customers are already online with 400 more
on the waiting list, even though the smart meters cost them $4.53 a month.
"People like the control over their power bill," says Gulf's Margaret Neyman,
general manager of marketing. She says customers are saving 15 percent,
which more than covers their participation cost.
Puget Sound Energy in Bellevue, Wash., has enrolled more than 420,000
customers in a smart-meter program. They've been getting reports, showing
when they use power the most and what it costs to deliver.
This month, the utility started tying its smart meters to time-of-use
pricing. Customers pay less during night-time hours, all day Sundays and
holidays.
Consumer and environmental groups generally haven't supported market-based
pricing for homes. They blame high prices, in part, on market manipulation
and don't want the power sellers to profit from it.
They have a case. But blackouts and brownouts amount to a sales pitch for
suspending clean-air rules and reopening old, polluting plants. Greenies need
to support any power-saving plan that works.

The mouth that roared
Rob Morse
Monday, May 21, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/21/M
N77405.DTL&type=news
Last week I was watching the TV news and saw a frightening sight. An angry
Gray Davis was declaring war on Texas.
"We are literally in a war with energy companies who are price-gouging us,"
the governor said, shaking with something that looked an awful lot like
emotion. "Many of those companies are in Texas."
In typical Davis style, the governor is a little late in declaring war on
Texas. If he had been president in 1942, he would have spoken of that day of
infamy in 1941.
It also was a typical Davis half-measure. He didn't declare war on all of
Texas, just the Texans who poll badly in California.
Those would be George W. Bush and his friends and contributors who cut off
our power, robbed us, and then used us as an example of why the nation needs
holes punched in Alaska and hundreds of Homer Simpsons put in charge of
nuclear fuel rods.
Davis isn't the type to boldly declare unlimited war on all of Texas,
certainly not "Austin City Limits," chili and the Texans we love, like Willie
Nelson, Tommy Lee Jones, Charlotte Mailliard Shultz and Willie Brown.
But Davis had a Texas stereotype in mind as he spoke of the hardscrabble
hombres in Houston high-rises who are smart and mean and are holding us up
long-distance. Yep, it's as if Texas is saying to California, "Your money or
your lifestyle."
Davis said he would retaliate each month by naming a Texas corporation "pig
of the month."
Yeah, that'll hurt those guys at Reliant Energy and Enron.
Having Gray Davis on your side in a dustup with a bunch of Texans is like
having the head of the high school av crew on your side in a rumble with the
Crips.
Right now the gashouse gangsters in Houston are having a jeweler make 14-
karat gold pigs they can wear proudly in their lapels while they eat steak
and laugh at Californians deprived of their sushi because of the loss of
refrigeration. Texas kids will have bumper stickers on their fuel-
inefficient scooters saying, "My dad is a proud pig of the month in
California."
We have to do better than this pig of the month stuff. Slogans won't do when
you're fighting guys who are cutting off the electricity to read them by.
Texans have a better slogan, "Don't mess with Texas," and they're a tight
bunch who won't take kindly to Davis messing with any of their citizens, no
matter how rich.
How is Davis going to match "Don't mess with Texas"? Sorry, but "Californians
are people, too" won't cut it.
Long before Davis declared half-war on Texas, a couple of readers suggested
that California retaliate by cutting off the supplies of our products to
Texas,
specifically wine.
This, of course, is indication of Californians' isolation from mesquite
reality. There may be six guys in Texas who ever order wine with their
T-bones,
and they're all in Austin. The menus say, "One: red. Two: white. Three rose.
Please order by number." And they all might as well be from upstate New York.
If California were the world's only producer of beer and tequila, then we
might have a chance of beating Texas by cutting off the essentials of life.
There's only one way to defeat Texas short of an outright shooting war
pitting our kids armed by junk-gun manufacturers against their citizens with
concealed-carry permits. We have to declare an embargo on the one thing that
Texans really need from California -- entertainment.
Texans are shutting down our televisions and movie theaters, so we'll cut
them off from movies and TV shows made in California. Hey, they're all made
here. Until we get affordable power, it's no sitcoms and no J-Lo for them.
They won't even get Westerns, since those are shot in parts of California
blighted enough to look like Texas used to look. Nowadays much of Texas looks
like Beverly Hills, hold the hills.
We'll also embargo that branch of entertainment known as California itself.
At the border crossing into California on I-70, a heavily armed guard will
peer into each car and truck looking for pointy boots and ask, "Are you
carrying any fruit, vegetables or Texans?"
Should any Texans turn up, they'll be sent packing toward El Paso, never to
taste seared ahi, never to see the weirdos on the Sunset Strip, and never to
feel the natural air-conditioning they can never shut off in San Francisco.
They'll have to go to Florida if they want to see a guy in a mouse head.
There's a governor there who won't call them pigs.
Rob Morse's column appears Mondays, Wednesdays, Fridays and Sundays. His
e-mail address is rmorse@sfchronicle.com.

Blackout alerts, forecasts proposed
Posted at 10:03 p.m. PDT Monday, May 21, 2001
BY JOHN WOOLFOLK

Mercury News

Under pressure to give more notice before pulling the plug, California's
power grid managers Monday proposed issuing alerts a half-hour before
blackouts and forecasting the likelihood of outages a day in advance.
The Independent System Operator's proposal heartened business leaders who say
unexpected rolling blackouts have cost them millions of dollars.
But the proposal disappointed consumer advocates and some lawmakers who hoped
grid officials would consider their suggestion to schedule rolling blackouts
days or weeks in advance.
Grid officials compared their proposal to the weather forecasts that alert
Midwesterners to tornadoes, and cautioned that the predictions are subject to
change.
``It's akin to a severe storm watch and a severe storm warning,'' said Gregg
Fishman, spokesman for the ISO, which will consider the proposal Thursday.
``We try to give as much hard information as soon as we can. But there are
days where those things are going to change very quickly.''
Business leaders said a half-hour warning, even if it's a false alarm, would
be better than the two to six minutes they got during the last round of
rolling blackouts in April.
``We're happy with what the ISO is trying to do,'' said Gino DiCaro,
spokesman for the California Manufacturers and Technology Association. ``It's
making a bad situation a little better.''
But critics said the proposal changes little and, with frequent blackouts
expected this summer, urged the state to instead schedule them in advance.
``It's actually quite distressing and disappointing,'' said Michael Shames,
executive director of the Utility Consumers Action Network, which proposed
scheduling blackouts. ``If the public is looking for better information on
blackouts, they'll have to look elsewhere.''
State Sen. Debra Bowen, D-Redondo Beach, whose energy committee is
considering notification issues today, agreed.
``It's not the report I was expecting, but 30 minutes of notice is certainly
better than two,'' Bowen said.
The idea of scheduling blackouts is gaining ground among state lawmakers, who
say it would let people know when to expect outages and also force down
runaway power prices by dampening demand.
The grid operator didn't propose scheduled blackouts because lawmakers
haven't yet agreed on the concept.
``It's in the talking stage,'' Fishman said. ``There's nothing firm.''
Rolling blackouts, in which utilities cut power from one block of customers
for an hour or so and then move to the next block, protect the system from
total failure when demand threatens to overwhelm supplies. Systemwide failure
could take days to fix.
Bad summer forecast
Californians have had six days of rolling blackouts this year and will likely
see many more this summer, as power-guzzling air conditioners drive demand as
much as 3,700 megawatts over available supplies. A megawatt can power about
1,000 homes.
The ISO highlights the potential for blackouts through progressive emergency
stages. Stage 3, the highest level, indicates rolling blackouts are possible.
Grid managers alert utilities and public safety officials to conditions by
e-mail, pager, telephone, radio and Internet postings, and notify the public
through news broadcasts.
To date, two-thirds of consumers say they're more concerned about power
prices than rolling blackouts, according to a Field Poll released today. But
more than seven in 10 expect to be inconvenienced by the outages expected
this summer, the poll found.
``People in general are much more willing to tolerate blackouts if they know
they're going to happen,'' said Guy Phillips, energy aide to Assembly Speaker
Pro Tem Fred Keeley, D-Santa Cruz.
The nature of the electric system makes advance notice of blackouts
difficult, grid officials said. California is so short of power that weather
changes and power plant shutdowns can dramatically affect the outlook.
On Monday, the state avoided blackouts amid soaring temperatures because of
power imported from other states and cooler weather in Southern California,
said ISO spokeswoman Lorie O'Donley. That could change as Southern California
heats up today and Wednesday, but blackouts aren't expected, barring a sudden
plant failure or drop in imports, she said.
National Weather Service forecasters expect a high of 90 degrees in San Jose
today, with a low in the upper 50s tonight.
Under Monday's ISO proposal, grid managers would commit to issuing a
30-minute notice of ``probable interruptions,'' identifying the affected
utilities and how much power they must cut. It still would be up to the
utilities to determine which areas would be affected.
The ISO also would issue 24-hour grid advisories. If the ISO expects a Stage
1 or 2 emergency the next day, grid managers will issue a ``Power Watch.'' If
there is a 50 percent or greater chance of a Stage 3 emergency the next day,
the ISO will declare a ``Power Warning.''
In addition, the ISO would bolster the ``system conditions'' report on its
Web page by adding available supply figures. The report now lists only actual
and forecast demand. Customers also would be able to sign up for hourly
e-mail updates.
ISO officials also are looking into contracts with notification services
offering to alert customers to grid conditions by request through phones,
faxes, e-mails or pagers.
``We spent the last four months designing this with businesses for
businesses,'' said ISO board member Carl Guardino, who also heads the Silicon
Valley Manufacturing Group.
The blackouts that hit the Bay Area on June 14 cost Silicon Valley businesses
$100 million, Guardino said, adding that he expects the ISO to approve the
proposals by month's end.
`Chance to do something'
``Every time the lights go out, companies see red,'' Guardino said. ``Half an
hour actually gives you a chance to do something. You can deploy police
officers to intersections. You can power down assembly lines.''
Others say that's not enough.
``I want 30 days' warning,'' said Assemblyman Mike Briggs, R-Fresno, who
plans to introduce a bill today that would schedule each utility outage block
for a day when blackouts are possible.
That would help farmers, who must have power on specific days for water
delivery and crop processing, Briggs said.
State Sen. Dede Alpert, D-San Diego, has a bill scheduled for discussion
today calling for the state to set a ceiling on what it will pay for power
and to schedule outages the next day if there aren't enough sellers at that
price.
Guardino said the ISO isn't ruling out scheduled blackouts, but is concerned
that such an approach could result in unnecessary outages.
Assembly Speaker Robert Hertzberg, D-Van Nuys, believes the ISO proposal is a
good idea in any case.
``Doing everything we can to let people know what's likely to happen is
important,'' said Paul Hefner, a Hertzberg aide, ``whether or not we can go
forward with some sort of scheduled blackout.''

Blackout season may be heating up
Firms may seek PUC lights-out exemptions as more power comes on-line.
May 21, 2001
By KATE BERRY
The Orange County Register
A sizzling summer-like heat wave could threaten California with rolling
blackouts early this week, energy officials said.
The blackouts could hit even as regulators debate the pros and cons of
pre-scheduling blackouts.
In addition, the state Public Utilities Commission will accept applications
this week from businesses claiming they must be exempt from having their
lights go out.
Temperatures of over 100 degrees in the Central Valley and 90 degrees in the
Bay area are expected today. Southern California will bear the brunt of the
heat Tuesday, so energy demand could be diffused throughout the state.
"We do expect this upcoming heat wave to be brutal,'' said Stephanie
McCorkle, a spokeswoman for the California Independent System Operator, which
manages the state's electric grid. "But we can't say for sure we'll be able
to avoid blackouts.''
The good news is that the grid operator expects more than 3,000 megawatts of
power to be online this week, compared with two weeks ago, when California
endured modest blackouts for two straight days. Still, about 10,000 megawatts
of electricity, or one-quarter of the state's capacity, will be out of
service, McCorkle said.
The ISO plans to release a report today on how scheduled blackouts might
work. The report is a response to a bill sponsored by state Sen. Dede Alpert,
D-Coronado, that would allow the grid operator to refuse to buy power that is
considered too expensive and instead call for rolling blackouts.
The PUC, which has been besieged by consumer complaints, might begin hearings
into inequities in the "baseline'' allocation on residential utility bills.
Consumers are complaining that baseline, which guarantees a subsistence level
of electricity based on various climate regions throughout the state, is not
consistent with energy usage.

Cheney: Forget price caps, OPEC pressure
Vice president calls for more refineries and review of fuel-content rules.
May 21, 2001
By BRIGITTE GREENBERG
The Associated Press
WASHINGTON -- Capping electricity prices or pressuring OPEC to cut oil prices
will not solve U.S. energy problems, Vice President Dick Cheney said Sunday
in defending a Bush administration energy plan that stresses production over
conservation.
While Democrats want immediate relief for California's power crisis, there
were few encouraging words from Cheney, who led a task force that developed
the Bush plan.
"They got into trouble in California over a period of years, and it's going
to take two or three years to get out of it," Cheney told CBS' "Face the
Nation." "There are going to be blackouts this summer."
For the short term, the administration has approved Gov. Gray Davis' requests
to expedite permits for new power plants and has ordered federal offices in
the state to reduce energy consumption this summer by 10 percent.
Sen. Barbara Boxer, D-Calif., said she was appalled that President George W.
Bush is not considering price caps or investigating companies that she said
are charging exorbitant prices for electricity. She noted that both Cheney
and Bush are former oil company executives.
"It's really rather stunning because those of us who are living through this
have suggested many things," Boxer told CBS. "So the vice president sits very
coolly, and I admire his cool, but he really sounds like an oil man, not a
vice president charged with helping the people."
If dairy farmers sought as much profit as oil companies - in some cases 1,600
percent - a gallon of milk would cost $190, she said.
Cheney said the answer to long-term price stability lies in building more oil
refineries in the United States and in reviewing a system whereby different
states require different blends of fuel - some mixed with the corn additive
ethanol, for example - to meet clean-air standards.
Capping prices would not increase the supply of energy or reduce demand,
Cheney said.
"We get politicians who want to go out and blame somebody and allege there is
some kind of conspiracy, whether it's the oil companies or whoever it might
be, instead of dealing with the real issues," Cheney told NBC's "Meet the
Press."
He criticized Davis for what he called a "harebrained scheme" to use the
state's budget surplus to buy power.
Senate Majority Leader Trent Lott, R-Miss., said Congress should look into at
least temporarily suspending the federal gas tax, which is 18.4 cents per
gallon.
Cheney, however, said that would pose problems for the nation's highway trust
fund, which relies on that tax to build and maintain the country's
transportation infrastructure.
Describing himself as a "pretty good environmentalist," Cheney also responded
to criticism from some environmental groups that he did not meet with them
before issuing the energy plan because he is beholden to energy producers who
gave millions of dollars to the Bush campaign.
"I couldn't begin to sit down with all of those various groups. I didn't have
time," he said.

A nuclear rebirth?
Despite obstacles, it should be in the mix to help ease the electricity
crisis.
May 20, 2001
By John Seiler
The Orange County Register
With the lights and air conditioners set to go out in summer blackouts,
everyone is scrambling for more energy production. That's why nuclear power
is back - cleaner, safer and more efficient.
President Bush set the tone in his 163-page energy plan released Thursday,
calling nuclear power "a major component of our national energy policy." The
president wants to make it easier to license new plants and give $1.5 billion
in tax credits for purchasing nuclear plants to make it easier for industry
consolidation. And he wants to continue studying the construction of a
nuclear- waste site in Yucca Mountain, Nevada, a project that is crucial to
California.
But California faces hurdles. The state bans new nuclear construction until
the national nuclear-waste site is built and anyone who builds here has to
deal with legitimate concerns about earthquake safety and adequate water for
cooling. This state also is a major center for environmentalists who oppose
nuclear power.
Nevertheless, advances in technology, years of experience and other factors
should make nuclear energy a serious candidate for responding to
California's, and the nation's, energy needs. It's a good time to think
through the history and the potential of this powerful energy producer.
Nuclear accidents
The heyday of the American nuclear power program was the 1950s through 1979,
when the Three Mile Island meltdown in Pennsylvania led to an end to new
plans for nuclear power. "The Three Mile Island accident destroyed the
reactor, but the core itself remained confined. Radioactive gases were
vented, but there is no accepted evidence that this harmed the public,"
writes John McCarthy, a Stanford professor of computer sciences with an
extensive Web site on nuclear power:
www-formal.stanford.edu/jmc/progress/nuclear-faq.html.
The last American nuclear plant opened in 1996 at Watts Barr in Tennessee, 23
years after its construction was given the OK. No new plant construction has
been approved in America since 1977.
In 1986, the Chernobyl nuclear plant in the Soviet Union (now Ukraine)
exploded from high-pressure steam (not a nuclear explosion), spewing out
radiation and casting further doubts on the future of the American nuclear
program, although no American nuclear reactor ever had anything close to the
shoddy socialist design of the Chernobyl plant.
"At the end of 1998 there were 9,012 civilian power reactor years of
experience throughout the world, and Chernobyl is the only nuclear power
plant accident harming the public," McCarthy notes on his site. Put another
way, excluding Chernobyl, nuclear power plants have never harmed the public.
Irrational fears
Contributing to the anti-nuclear atmosphere were such films as 1979's "The
China Syndrome," starring Jane Fonda and 1983's "Silkwood," starring Meryl
Streep. And let's not forget one of the funnier skits on "Saturday Night
Live" in 1979, in which Dan Aykroyd played President Jimmy Carter, who
becomes irradiated touring "Two Mile Island" after an accident and grows into
The Amazing Colossal President.
In California, sentiment was set by then-Gov. Jerry Brown, whose chief of
staff was Gray Davis, now California's governor. "Well, it's not completely
clear to me what a reasonably scientific position is on nuclear power -
except to say that where there are other potentially less destructive
alternatives, it doesn't make much sense to rush to increase dependency on
nuclear power plants. In California there are alternatives such as
conservation, cogeneration combined cycle, geothermal and solar energy. In
the aggregate they make it possible to slow down the growing use of nuclear
power," Brown told biographer Orville Schell in Brown, published in 1978.
Foreign countries don't share America's phobia about nuclear power, which
provides 78 percent of France's electricity, compared to 20 percent in the
United States and 16 percent in California. America has 103 operating
reactors out of 435 worldwide.
Surfin' San Onofre
"You'd catch 'em surfin' at ... San Onofre," harmonized the Beach Boys in
"Surfin' USA." And the surfers still ride the waves right in front of the
nuclear power plant, which has been operated in complete safety since 1968.
The first nuclear reactor built was decommissioned in 1992 and is being
dismantled. The two remaining, newer reactors - the large cones visible as
you drive by on the I-5 freeway - are licensed to operate by the federal
Nuclear Regulatory Commission until 2022, spokesman Ray Golden told me, and
could be running until 2042 if an extension is granted.
Put another way, if the state had just three more nuclear sites the size of
the one in San Onofre, there would be no blackouts this summer. The state is
expected to be short 5,000 megawatts. San Onofre's two reactors together
produce 2,240 megawatts of power. (1,000 megawatts serves about 1 million
homes.)
California's only other nuclear plant is the Diablo Canyon facility, which
opened in 1985 and provides 2,190 megawatts of power.
Last Wednesday I toured the San Onofre plant. Bechtel workers were fixing one
turbine, on which an electrical circuit breaker had shorted out in February
and caused a fire. The turbine should be fixed by sometime in June, in time
for the summer energy crunch.
It should be noted that the turbine is not the reactor. The turbine rotates
and creates electricity the same as at any other kind of plant, so the fire
didn't come close to causing problems for the reactor.
The nuclear fuel the reactor uses costs about $30 million a year, Golden
said. That works out to a cost of "less than 3 cents a kilowatt hour," he
said, but couldn't be more specific because of company policy. That compares
to a cost of 3 cents to 4 cents a kilowatt hour for natural gas.
Regulatory hoops
Despite the safety and need for nuclear power, there are a number of hurdles
to building new plants, especially in California:
lWaste disposal. Currently, all American nuclear plants store their nuclear
wastes on site, such as the large concrete bunkers I saw at San Onofre. The
waste has to be stored for 10,000 years. They're awaiting the potential
development of the Yucca Mountain, Nevada, waste site, on which $7 billion
already has been spent for studies by the U.S. Department of Energy. The site
already was the location of 100 nuclear bomb tests.
The site will be ready "at the earliest in 10 years," Barbara Byron, nuclear
waste policy adviser for the California Energy Commission, told me.
In the meantime, California law stipulates that "no nuclear fission thermal
powerplant ... shall be permitted land use in the state" until the U.S.
government develops a "means for the disposal of high-level nuclear waste."
Another problem is that President Carter shut down America's only nuclear
waste processing plant in the late 1970s, which would have recycled most of
the waste, immensely relieving the problem. In March, Sen. Pete Domenici of
New Mexico introduced S. 472, the Nuclear Energy Electricity Supply Assurance
Act of 2001, which would develop a new waste reprocessing facility.
lEarthquakes. The state's unstable geology adds to the risk and cost of
building plants here.
lWater. The state's lack of water makes it difficult to site new plants.
Byron said nuclear plants use "two and a half times as much water as other
plants."
lIn a deregulated market, companies are less likely to pay the $2 billion to
$5 billion a new nuclear plant is estimated to cost, Byron said. How does
that compare? The Electric Power Supply Association told me that it's
difficult to estimate the cost of building and running a new plant, whether
it uses nuclear, natural gas or some other power. However, the costs of some
recent natural gas plants have ranged from $600,000 to $800,000 per megawatt
of installed power, or as much as $800 million for 1,000 megawatts of power.
And given that new natural-gas plants range from 50 to 1,500 megawatts,
there's more flexibility in designing and financing projects.
New technologies
But the technology keeps moving forward. One thing that should keep costs
down is standardized nuclear-plant designs, an idea that has kept prices
reasonable in France. In the past, each nuclear plant in America was
basically designed as a unique unit.
Since 1997, the Nuclear Regulatory Commission, which regulates all nuclear
plants in America, has approved three new advanced designs: The Advanced
Boiling Water Reactor design by GE Nuclear Energy, which generates 1,300
megawatts; the System 80+ design by Westinghouse (formerly ABB-Combustion
Engineering), which generates 1,300 megawatts and is similar to that used at
San Onofre; and the AP600 design by Westinghouse, which generates 600
megawatts.
"Nine other reactor designs have been submitted for NRC review, however only
two - the AP1000 and the Pebble Bed Module Reactor - are being actively
pursued at this time," the NRC reports on its Web site.
www.nrc.gov/OPA/gmo/tip/fsadvancedrx.html
The AP1000 is a more powerful version of the AP600. But the Pebble Bed design
is new and is called "politically correct" by those working on it, Andrew
Kadak told me; he's a professor at the Massachusetts Institute of Technology
in the nuclear engineering department. He said the new technology is
"high-efficiency, helium-cooled." It runs at lower temperatures than
traditional nuclear plants and "uses a different type of fuel. It produces
less energy per cubic meter. Essentially there's no chance for melting
because of the lower power density they generate. You could put them near
population centers because of their safety."Each plant would generate about
100 MW, or about one tenth of current plants. Construction planned for a
plant in South Africa will run $100 million. Even if the cost were double in
America, he said, "it's still very competitive for natural gas." The South
African plant will produce power at a cost about 1.6 cents to 2 cents per
kilowatt-hour, "about half what natural gas cost two years ago" when natural
gas prices were stable; the price comparison is even better today, since
natural gas prices have more than doubled.
Kadak said the concerns over emitting gasses into the environment, the high
cost of other fuels and a changing political climate make nukes feasible
again.
Kadak said that the Pebble Bed design can be up and running within four years
once a site is approved.
When will we go nuclear again?
"For the first time in a long time it looks like it might be starting up
again," Fred Smith told me about nuclear power construction; he's head of the
Competitive Enterprise Institute, a Washington think-tank that advances new
thinking on economic matters. "Sooner or later we will have a waste
facility," he said of the Yucca Mountain site. "The nuclear option is far
more viable than most people thought. The anti-nuclear campaign has passed
its peak. But it will take time. I think within the decade we'll have a new
nuclear plant. That wasn't true two years ago."
Moreover, natural gas - which will power most of the new plants coming online
in California - will continue to be scarce. "We haven't drilled for it,"
Smith said. "It's hard to transmit. We'll have to build more pipelines. It's
not easy to ship from abroad."
By contrast, nuclear power's fuel prices are almost constant.
What's short-circuiting the construction of nuclear power? The same thing
that has caused the electricity and other energy crises: politics. Even
though nuclear plants would alleviate concerns (real or imagined) about
global warming by reducing dependency on fossil fuels and coal,
environmentalists remain opposed, including the Sierra Club and the Green
Party.
The Sierra Club Web site includes several resolutions opposing nuclear power.
The 2000 Green Party platform called for "the early retirement of nuclear
power reactors as soon as possible (in no more than 5 years)."
Legislation
In the California Legislature, Assemblyman Bill Leonard of San Bernardino
introduced Assembly Bill 1492, which would have allowed the construction of
nuclear plants in California even without a national waste-disposal facility.
But it was amended only to allow a single nuclear plant owned by the state -
not a good idea. It then was made a two-year bill, meaning it won't be
considered until next January.
Sen. Tom McClintock of Simi Valley has sponsored Senate Joint Resolution 13,
a non-binding resolution that reads, "the Legislature ( hereby determines
that nuclear energy is a necessary source of electricity generation, with no
detrimental impact on its citizens and environment; and be it further
resolved that the Legislature of the State of California urges the United
States Secretary of Energy to expedite the review of the scientific data
regarding Yucca Mountain's suitability as a permanent federal repository for
high-level radioactive materials and make his recommendation to the president
this year."
"This is the first step in the debate," McClintock told me.
The second step will begin this summer when state and federal legislators
hear from citizens calling them in the dark during blackouts. That will
concentrate minds on the necessity of bringing back to America an electricity
source that is safe, cheap and almost unlimited. John Seiler is an Orange
County Register editorial writer.

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Mexico Seen As Medium-Term Solution To California Power Shortage

MEXICO CITY, May 21, 2001 (El Economista/Infolatina via COMTEX)  via NewsEdge
Corporation  - Increased
access to electric power generated in northwestern Mexico is the main
medium-term solution to the U.S. state of California's continuing power
shortage
currently envisioned by state authorities, according to a report in Mexican
financial daily El Economista. Michael Flores, California Gov. Gray Davis'
representative for relations with Mexico, said boosting electricity imports
from
the Mexican state of Baja California was regarded as a priority north of the
border. For geographical reasons, Baja California is not connected to the rest
of Mexico's national power grid, and, so, its excess supply cannot be diverted
to areas of Mexico that are plagued by power shortages. Baja California's and
California's transmission systems are linked, and Mexican state-owned power
utility the Federal Electricity Commission (CFE) has been exporting an average
50 megawatts per day to California since January. Flores said there currently
were plans to build new generation plants and expand existing ones in Baja
California specifically for the purpose of exporting electricity to
California.