More Rolling Blackouts in Heat-Stricken California

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The New York Times

In a preview of summer trouble, a heat wave combined with the sudden failure of two large power generators prompted hours of rotating blackouts today from San Francisco to Beverly Hills. The blackouts were the first since January and the longest yet, affecting at least a million customers from noon into the rush hour, officials said.

Even as Energy Secretary Spencer Abraham warned in Washington that the nation faced the worst energy supply crisis since the oil embargoes and gas station lines of the 1970’s, Californians once again found themselves working in darkened offices, standing over half-cooked lunchtime steaks, closing stores and creeping warily through crowded city intersections without working traffic lights.

“I had one guy who almost wiped me out,” on the road, said Debbie Cain, who works in the office at Folsom High School, east of Sacramento, where teachers used megaphones, not bells, to change classes. “He hadn’t caught on yet.”

The blackouts, lasting up to two hours each and the first to occur in some 140 cities in Southern California, were the latest fallout from the state’s ill-fated experiment with the partial deregulation of its electricity market, which let wholesale prices float while capping retail rates.

That has left the state’s two major investor-owned utilities on the verge of bankruptcy and unable to pay suppliers, including smaller generators that use natural gas or solar power, wind and wood waste products to generate more than a quarter of the total daily electricity needs of some 30,000 megawatts, or enough to power roughly 30 million households.

As a result, in recent weeks, the small generators themselves have been unable to buy fuel and have shut down about half their capacity, or 3,100 megawatts, officials said, while a bill to help them remains stalled in the State Legislature.

At the same time, plants that have been operating without a break for months have been taken out of operation for maintenance or repairs, reducing supplies by an additional 12,000 megawatts, and imported power supplies from the Pacific Northwest are running well below typical levels because of low rainfall and hydroelectric supplies there.

“This just demonstrates that we’re operating at very tight margins,” said Patrick Dorinson, a spokesman for the California Independent System Operator, the agency that was set up to manage the state’s power grid after deregulation. “It’s clearly the worst day we’ve ever had in California.”

Officials said the immediate cause of the hastily ordered blackouts was the midmorning failure of the two power generators after a transformer fire at a plant on the California-Nevada border, coupled with a greater demand for air-conditioning as a result of unseasonably high temperatures, which climbed to 87 in downtown Los Angeles today.

But electricity grid operators warned that intense conservation efforts were still needed, especially during peak evening hours of demand, and that another round of blackouts was possible.

In Beverly Hills, where palm-lined streets are synonymous with California’s wealth, the Police Department had fielded some 200 calls by midafternoon from residents shocked to lose power without notice.

“They call us to tell us their power went down,” said Lt. Ed Kreins, the department’s media liaison. “And then they ask when it’s coming back on. It’s the same thing that happens during earthquakes; people call us just to say, ‘We had an earthquake.’ ”

Not even the state’s Public Utilities Commission, which regulates the utilities, was spared. Harriet Burt, deputy chief of staff to the president, Loretta Lynch, told The Associated Press that she had a battery-powered lantern and planned to keep working in the commission’s San Francisco headquarters.

“I think we’ll just carry on as everybody else does,” she said.

Jerry Stephens, owner of Sunset Sewing and Vacuum in San Francisco, said he was demonstrating a sewing machine when the power failed.

“I guess it’s a big deal, because I sell sewing machines and vacuums and I can’t show or repair either,” he said. “We usually sell eight vacuums; today I sold two. So I’m down six vacuum sales so far.”

The managers of the state’s power grid issue a so-called Stage 3 alert whenever electricity reserves fall to within 1.5 percent of capacity, and then implement blackouts as needed to spread the power around and keep the entire grid from crashing and plunging not only California but much of the West into darkness.

The last forced blackouts were ordered on Jan. 17 and 18. Since then, Gov. Gray Davis and the Legislature have struggled to get a grip on the crisis, and the state has already spent close to $3 billion to buy power on behalf of the investor-owned utilities Southern California Edison and Pacific Gas and Electric, whose financial troubles left them effectively shut out of the spot market.

Mr. Davis told lawmakers today that he would need an additional $500 million in 10 days for the short-term buying of power, bringing the total power spending to $4.2 billion.

The state stepped in to buy power for Southern California Edison and Pacific Gas and Electric in January, when the two utilities’ credit was severely downgraded.

At the same time, the state has begun negotiating long-term contracts to buy power at more favorable prices, to be financed through some $10 billion in state revenue bonds. Other measures are pending in Sacramento to help the utilities restructure some $13 billion in debt by having the state buy their power transmission lines, and the crisis had seemed to ease a bit as warmer temperatures lowered demand for heat, and three weeks passed without full-scale power alerts.

Mr. Davis, whose early handling of the crisis was criticized as not forceful enough, has taken to sounding an upbeat tone in recent weeks, as public opinion polls continue to show him with relatively high approval ratings and with voters more inclined to blame the utilities or out-of-state power generators for fomenting a crisis in order to raise rates.

As it is, consumers are facing anticipated rate increases of close to 20 percent by next year, when earlier caps on rates will be lifted.

Today, a prominent advocacy group, the Foundation for Taxpayer and Consumer Rights in Santa Monica, Calif., issued a report contending that the power shortages were not caused by increased demand and a shortage of new power plants but were artificially created by price-gouging power-generating companies.

The utilities and power generators have consistently denied such accusations, but the Federal Energy Regulatory Commission has determined that some power sales in January and February were priced too high. The commission ordered the generators to refund some $124 million in charges.

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