Plants shut for pollution return to ease shortage

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Oakland Tribune

SACRAMENTO — More than half the electricity generation plants shut down because they reached annual air pollution limits were back in operation Friday, easing the unexpected pre-winter supply crisis.

The electricity industry applauded creative deals struck with alarmed state energy and air quality officials to get the units running again.

But consumer and environmental groups decried the hasty arrangements as a sacrifice of environmental protections, triggered by corporate attempts to profit from the crisis and a failed state government effort to deregulate the electricity industry.

“This should not be a choice between our environment and our lights going on,” said Doug Heller, a spokesman for the Foundation for Taxpayer and Consumer Rights.

On Thursday evening, authorities declared an unprecedented Stage Three electricity alert, barely avoiding rolling blackouts across the state as the power grid strained under cold weather demands, diversion of electricity elsewhere and plants idled for maintenance or by emission caps.

The Independent System Operator, which controls California’s power grid, put the state on Stage Two alert Friday, when reserves fell below 5 percent, again forcing widespread conservation steps.

However, ISO spokesman Patrick Dorinson said he expected California to squeak through the day and weekend without returning to Stage Three.

“We’re looking toward Monday, though,” when many businesses resume work and colder weather is expected, said ISO spokeswoman Lorie O’Donley.

At the same time, the ISO appealed to federal officials to relax the cap on wholesale electricity prices and take other complex actions aimed at fostering sales to California to ease the supply shortage.

Late Thursday, Gov. Gray Davis, angered that the ISO acted without consulting him, asked the agency to rescind its request. Davis spokesman Steve Maviglio said the governor instead wants tough rate caps that he believes will help control high prices.

However, there was growing evidence that some California power generators were sending electricity out of state to realize higher prices per megawatt available in energy-starved areas — like the Pacific Northwest — without price caps.

The latest supply shortfall, developing at an unusual time of year, comes as state and federal officials are already struggling with an underlying supply and price crisis brought on by the state’s 1996 deregulation of the electricity industry.

The new competitive market was supposed to lower prices to consumers but escalating energy costs caused market prices to skyrocket. California utilities, with few power plants of their own, have been forced to pay high rates for wholesale electricity and scramble for supplies.

Though California’s electricity reserve remained dangerously low, authorities credited the restart of idled plants Friday with easing the strain on the power grid.

Some 17 generation units that could produce 2,500 megawatts — enough to supply 2.5 million homes — were not operating Thursday because they had reached their air pollution limits for the year.

ISO spokeswoman Stephanie McCorkle said that by Friday that figure was more than halved as plants that produce 1,300 megawatts resumed operation — an amount equal to about 4 percent of Thursday’s peak demand.

Though state air quality officials are working to restart the rest of the plants, state Sen. Tom McClintock, R-Northridge, sent the governor a letter urging Davis to take direct action.

“Power plants capable of producing more than the power needed to run our family Christmas lights are sitting idle due to bureaucratic red tape,” McClintock said. “With a stroke of his pen the governor can turn this red tape into more holiday cheer for the children of California.”

There was no immediate response from the governor’s office.

Much of the recovered generation capacity stemmed from a deal worked out between the South Coast Air Management Quality District and AES Corp. to restart its plant near Long Beach.

District spokesman Sam Atwood described the complicated agreement as an attempt to balance power needs with protection of the environment. The deal extends deadlines for plant improvements to reduce emissions while continuing to assess penalties for the company’s failure to comply with regulations.

Jan Smutney-Jones, a spokesman for the Independent Energy Producers, hailed the effort to restart the plants as good for the industry and California.

But environmental and consumer groups denounced the effort.

Mindy Spatt, of the Utility Reform Network, said the “sacrifice of pollution control” will come to be known as “one of deregulation’s biggest failures.”

“We wouldn’t have seen this happening in a regulated industry,” she said.

Heller, whose foundation is threatening a ballot initiative addressing the crisis, said Californians are “going to be sacrificing our environmental concerns to solve this crisis, when in fact the real source of the problem is greedy power plants.”

“The problem is that we’ve got plants that were brought down for the purposes of profit, not because of concerns about pollution or maintenance. They were brought down to tighten the market in order to watch prices rise to exorbitant levels,” he said.

Industry officials deny the accusation, which is under investigation by state inspectors.


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