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The power crunch in California eased slightly Monday after a nuclear power plant that was closed for repairs returned to service ahead of schedule, but officials declared a power alert by late afternoon and asked some commercial customers to cut back on their use. 

Another day of cool temperatures in the Northwest meant less electricity would be available when the state needed it most – the evening peak hours of 5 p.m. to 7 p.m., said Ed Riley, director of grid operations at the California Independent System Operator. 

“We’re expecting to import approximately 400 megawatts at the peak. We need that number to be about 3,500 megawatts,” Riley said. 

The ISO declared a Stage Two alert at 5 p.m., and asked some commercial “interruptible” customers to cut back on power use. Those customers pay lower rates in return for a loss of service when power reserves dip below 5 percent. 

Southern California had enough resources Monday, Riley said, but Northern California still faced shortages. 

“A lot of extra generation came online in the south over the weekend, but it doesn’t really help the north much” because the transmission lines are only capable of shipping limited amounts of power across the state, he said. 

The situation in Southern California eased due to the speedy repair of the Diablo Canyon nuclear power plant near San Luis Obispo. The return of Diablo Canyon, which generates enough power to run about 2 million homes, will help grid officials during the next week of cool weather and continued scant supplies, said Jim Detmers, managing director of operations for the ISO. 

The power shortage also was helped by the closure of a major Northwest electricity customer, Kaiser Aluminum Corp. The company agreed to close its smelting plant in Mead, Wash., for 10 months and resold the electricity it had committed to purchase. 

The temporary shutdown of the Kaiser Aluminum smelter will free up  

190 megawatts of power for the Bonneville Power Administration, which paid  

$52 million to repurchase the  

December allotments. 

“The power we had been using was worth far more on the open market than it was in making aluminum,” said Scott Lamb, spokesman for Kaiser. “We also recognized that there is a need for this power and by selling it back, we are enabling that power to be available.” 

The price reflects what’s happening in the electricity market, Lamb said. Kaiser’s commitment of 190 megawatts per month for January through September of next year is also for sale, Lamb said. 

But the overall problem– demand that is consistently greater than supply –isn’t going away anytime soon, Detmers said. 

“It’s been some time since there has been significant generation construction,” Detmers said. 

There is also a “very large, looming financial problem that will have to be addressed,” Detmers said. “We’ve got a power flow problem, and we’ve got a cash flow problem. We are paying out an enormous amount.” 

The ISO usually pays about $5 million a day for power, but on Thursday, when power reserves dipped below 1 1/2 percent and grid officials nearly ordered rotating blackouts, the grid paid $81 million to keep the electrons flowing, officials said. 

The bill for that isn’t being passed on to customers yet because most of the major utilities — Southern California Edison and Pacific Gas and Electric Co. — haven’t fully transitioned into the deregulated market and are still operating under rate caps. 

PG&E officials said Monday they’ve accrued a debt of $4.6 billion as of the end of November, due to soaring wholesale costs. With no way to pass that increase on to customers, the company’s credit rating could suffer, PG&E spokesman Greg Pruett said. 

“Our ability to continue to go out into the market and buy power at these extraordinary rates is because of the financial institutions that loan us money continue to see us as a good investment,” said Pruett. 

California in 1996 approved a phased-in deregulation of the electricity market. The goal was to obtain lower prices for consumers through competition on the open market. 

The law required the monopoly utilities, which had been regulated for decades, to sell off their generating assets. When that transition is completed — by March 2002 — they can operate without a rate freeze and buy open-market power. 

The first utility to complete deregulation was San Diego Gas and Electric Co., with 1.2 million customers. The utility, its rate cap removed, passed its wholesale costs onto its customers. Bills there doubled and tripled. 

PG&E and SoCal Edison still have a rate freeze. Both companies have sought permission — thus far, unsuccessfully — from state and federal authorities to lift the rate cap. 

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On the Net: 

The California Independent System Operator Web site is www.caiso.com