Energy Experts Belie Davis’ Rosy Prediction

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Summer expected to be crunch time

The San Francisco Chronicle

Gov. Gray Davis‘ optimistic assessment that California may be on the “back side” of its energy crisis flies in the face of what many energy companies and other experts predict.

California’s real test will come this summer when electricity usage sharply increases, and unless everything breaks the way Davis hopes, predictions are that large chunks of the state will be in the dark.

“We’re not on the back side of this crisis. This problem is far, far bigger than the governor is suggesting,” said Gary Ackerman, executive director for the Western Power Trading Forum in Menlo Park.

“To characterize the problem that way shows a recklessness that feeds on the popular notion we don’t have an energy crisis. We do. We have a very serious one that’s going to hit us as temperatures and loads go up,” Ackerman said.

The Democratic governor’s comments were made Monday in Washington, D.C., during an East Coast visit aimed at getting Washington and Wall Street support for his energy plan.

He admitted more hard work is needed, but said the state is on the “back side of the crisis” because lawmakers have passed bills needed to help lower electricity prices.

“Does that mean we’re home free?” Davis asked yesterday. “No.”

But he again repeated that the state is on the back side of the crisis.

That is contrary to predictions by the Independent System Operator, which oversees the state’s power market.

On any given day in June, the ISO estimates, the state will fall 6,815 megawatts short of demand. That would put nearly 7 million homes in the dark, if it happens.

In July, the expected shortage is 4,685 megawatts. In August, it’s 5,297 megawatts. That’s if California has a normal summer. If it’s hotter than normal, the shortage grows.

The ISO’s estimates tend to be conservative and do not include Davis’ conservation goal.

But even if a 10 percent reduction were achieved in June that would save roughly 5,000 megawatts, the state would still be short 1,800 megawatts.

And there are other variables.

Depending on the snowpack and reservoir levels, hydroelectric plants may not be able to run at full bore, which would also worsen the situation.

“That is something the governor cannot spin his way out of,” said Sen. Tom McClintock, R-Northridge.

Davis said a combination of new power plants and energy conservation will help the state get through this summer.

The clock is running. The ISO predicts shortages of 3,030 megawatts in May — just two months away.

“The real electricity crisis is going to be this summer, and I don’t think we’ve made enough progress there,” said Severin Borenstein, director of the University of California Energy Institute.

California won’t be able to build its way out of the energy crisis by quickly approving and building new power plants, Borenstein said.

The ISO’s demand estimates already factor in the new power plants set to come online this summer.

“Unless we have a very mild summer and have lots of rainfall between then and now,” Borenstein said, “we are going to face some serious shortages.”

Like Davis, Borenstein says California needs to do more to conserve energy. Unlike Davis, he favors raising prices on big power consumers to give them an incentive to cut back.

But the Democratic governor may be sending Californians a mixed message.

By telling them the worst is over, he could undercut his plan by making people believe more conservation is unnecessary.

Excluding what lies ahead, there are also plenty of energy issues left unresolved right now.

Although Davis has reached a tentative deal with Southern California Edison on purchasing its share of the state’s transmission system for $2.7 billion — no such deal exists with either Pacific Gas & Electric or San Diego Gas & Electric.

Some alternative energy producers, like co-generation plants, are shutting down because the cash-poor utilities haven’t paid them for several months. No cash means no fuel to run the turbines that make the juice.

Generators like Duke Energy and Reliant Energy aren’t convinced the crisis has passed.

For starters, both companies are owed in excess of $700 million for electricity bought by PG&E and Edison but never paid for.

“There are a lot of issues still out there such as how much power your state will require this summer, whether there is enough generation on the ground or available commercially to handle the load if there is a significant spike in demand,” said Richard Wheatley, a Reliant spokesman.

Harvey Rosenfield, head of the Foundation for Taxpayer and Consumer Rights, has a slightly different take on whether the worst is over.

“We’ve said all along it’s a crisis inspired by the greed of the utilities and the energy companies,” Rosenfield said.

“Now that taxpayers are paying $1 billion every three weeks to buy electricity and the ratepayers are going to pay between $13 billion and $20 billion, the companies are happy and the crisis is over. What more could they want?”

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