Summer energy problems possible;

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Southern California has ‘worst’ situation in U.S.

The San Diego Union-Tribune

SAN FRANCISCO, CA — California and federal energy officials warned yesterday that the electricity system in Southern California faces hard times this summer, especially if the weather is unusually hot, and next summer may be even rougher.

The southern half of the state has “the worst electricity supply situation in the entire country,” Joseph Kelliher, a member of the Federal Energy Regulatory Commission, told an electricity conference in San Francisco.

Electricity assessments from California agencies this year concluded that the state should be able to avoid brownouts or blackouts this summer, unless it experiences an extraordinarily hot summer or suffers the loss of key transmission lines or power plants.

San Diego Gas & Electric officials have also said they expect electricity supplies to be adequate this summer.

FERC Chairman Pat Wood, however, reflected on the chaotic blackout days of the California energy crisis in 2000-2001 and expressed disappointment at the level of progress.

“I thought we would be further along after four years,” Wood said. “It’s a bit disheartening looking again at a potentially tight summer, maybe two.”

A California consumer advocate said Wood and FERC should bear significant blame for the crisis and the lack of progress since it ended.

“Pat Wood and FERC have stood in the way of California getting back money from the energy companies that robbed us,” said Doug Heller of the Foundation for Taxpayer and Consumer Rights in Santa Monica, referring to the billions in refunds California has been demanding that federal regulators order from electricity suppliers.

“If FERC had stopped the market manipulation during the energy crisis, we wouldn’t have had blackouts then and, unless there’s cheating, we won’t have blackouts this year.”

FERC officials joined the California Public Utilities Commission, grid operators and others yesterday to measure the electricity supply and demand outlook for the next two summers and explore ways to redesign the state’s power business to attract needed investments.

Southern California needs more transmission lines, efficient generating plants, and effective conservation and energy efficiency programs to relieve the strain on the regional grid, said Jim Detmers, vice president of grid operations for the Independent System Operator. The ISO runs most of the state’s grid.

Transmission congestion in Southern California and statewide is costing consumers about $1 billion a year.

Electricity demand is growing by 3 percent to 4 percent a year, paced by population growth and residential construction in California’s hot inland valleys, triggering high use of air conditioners, Detmers said.

While the state is building new plants, it is also retiring older, inefficient stations, leaving a net addition of about 8,600 megawatts since 2001, less than grid operators now prefer for a reserve margin.

California usually can count on summer hydropower supplies from the Pacific Northwest, but a string of drought years in the Northwest combined with rising demand there is limiting imports, said Jeff Wright, a FERC energy analyst.

So California will have to look to electricity imports from Nevada, Arizona and Baja California, to help out, he said.

A very hot summer could leave a shortage of about 1,700 megawatts, or electricity for about 1 million homes, in Southern California and a statewide shortage of 800 megawatts, according to an ISO forecast.

The outlook for summer 2006 is more demand, zero net gain in new generation, and few transmission upgrades to get more imports. Most relief will not come until 2007-2008, the forecast said.

FERC’s Wood said the commission “remains committed” to what he called the “three R’s” for California: adequate electricity resources, restitution for electricity overcharges in 2000-2001, and rebuilding the marketplace and establishing clear regulations.

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