SOUTHLAND’S FIRST ROTATING OUTAGES PROMPT CHARGES OF PRICE-FIXING, COLLUSION

The Daily News of Los Angeles

Rolling power blackouts hit Southern California for the first time Monday as critics claimed the shortage was engineered by electricity generators to hold the state hostage.

At noon Monday, the California Independent System Operator ordered blackouts to Southern California Edison customers in Beverly Hills, Santa Monica, the Antelope and Santa Clarita valleys and many other communities.

The one-hour blackouts – driven by high demand for air conditioning and sharply reduced production – continued throughout much of the afternoon and evening, affecting almost 1 million residents in 141 cities across the state.

“California is experiencing a rolling blackmail,” said Doug Heller, spokesman for the Santa Monica-based Foundation for Taxpayer and Consumer Rights, which released its “Special Report: The Manufactured Energy Crisis” an hour after the blackouts began.

“The profiteering and price gouging that California has experienced in the last couple months is the direct result of the foolish deregulation scheme that has allowed Texas energy companies to control our energy market. Today’s blackouts are no different than the threats of a terrorist demanding a massive ransom.”

The electricity shortfall blamed for the blackouts was less than one-tenth of the state’s generating capacity that was out of service Monday for maintenance and other reasons.

Los Angeles, Burbank and Glendale, among the few cities with their own generating capacity independent of the state grid, escaped the blackouts.

But much of the rest of the region and the state suffered through an afternoon and evening of rotating outages as Californians found themselves working in darkened offices and standing over half-cooked steaks.

The blackouts jammed intersections, darkened shopping malls, closed stores, deleted computer files, killed grocery freezers and put hundreds of law enforcement officials and emergency personnel on red alert.

The blackouts – the first in California since January and the worst yet – were widely seen as a preview of what the state faces in the heat of summer when energy demand reaches super-peak levels.

U.S. Energy Secretary Spencer Abraham warned in Washington, D.C., that the problem could spread as the nation faces its worst energy crisis since the 1970s.

U.S. Rep. Elton Gallegly, R-Oxnard, stranded more than an hour at his Oxnard high-rise office by Monday’s blackouts, called for an intensified investigation of possible price-fixing and collusion by power generators.

“The concern I have is whether or not the free enterprise system is working, not collusion between a small group of energy companies with a wink and a nod,” he said.

Officials of the Independent Power Producers Association did not return phone calls.

While warm temperatures in Southern California were blamed for part of the shortage Monday, more than 11,500 megawatts of power generation was out of service for maintenance and repairs.

By midmorning, an additional 1,000 megawatts went out of service as two Laughlin, Nev., generators went down. That is enough electricity to meet one-third of the state’s needs on a normal day and represents more than triple normal maintenance losses.

The blackouts were needed by grid operators to reduce consumption by 800 megawatts – a fraction of what was out of service – to keep the system functioning. One thousand megawatts is enough to power 1 million homes.

At least half the state’s independent wind, solar and biomass generators known as qualified facilities was withheld because of financial concerns about payment. That alone cost the state 3,000 megawatts of power.

Cogeneration plant operators owed tens of millions of dollars by Pacific Gas and Electric and Southern California Edison claim they can’t afford to keep operating.

But state Assemblyman Fred Keeley, D-Santa Cruz, who has played a lead role in writing energy crisis legislation, said Monday’s outages appeared to be due to a “sickout” because the generators were not being paid.

Imports of hydroelectric power from the Pacific Northwest also were down sharply because of low water supplies due to near-drought conditions.

Consumer advocates noted that energy demand in California grew 4 percent since last year but the shortages have been so severe that peak power prices increased between 200 percent and 3,200 percent.

The bill for buying power in the open market soared past $4 billion, and Gov. Gray Davis had to ask the Legislature to authorize an additional $500 million in taxpayer money to pay for electricity for the state’s 24 million private utility customers.