SACRAMENTO — Energy Secretary Bill Richardson ordered Northwest generators to sell electricity to power-strapped California utilities Wednesday, a move that appeared to avert the immediate threat of rolling blackouts.
The announcement came as state regulators warned blackouts were imminent due to power shortages within California and an inability to buy more electricity from the Northwest.
The warning came from the Independent System Operator, keeper of California’s power grid. It said electricity supplies were so perilously low it might declare a Stage 3 power emergency for the second time in a week. At Stage 3, the grid can impose blackouts.
Richardson said he was using emergency powers to force wholesalers to sell power to California at a price he deemed fair. He said he would also request that two large Pacific Northwest power marketing agencies generate more power to send to California.
“Our objective is to keep the lights on in California through this emergency situation,” Richardson said.
ISO officials said the threat of blackouts appeared to be averted after the Bonneville Power Administration diverted 1,500 megawatts to California and some suppliers that balked at selling power to utilities in the state relented.
“We don’t think we are going to have rolling blackouts today so we can all breathe a sigh of relief,” said Kellan Fluckiger, the ISO’s chief operating officer. “Things also look better for the rest of the week.”
The ISO was on the phone literally “hunting for megawatts,” spokeswoman Stephanie McCorkle said.
About a dozen suppliers were demanding cash before selling power to California due to concerns about the utilities’ solvency, Fluckiger said.
California’s two largest utilities, Pacific Gas and Electric and Southern California Edison, are near bankruptcy due to skyrocketing wholesale power costs, Gov. Gray Davis and Sen. Dianne Feinstein, said at a Washington, D.C., news conference with Richardson.
Davis and Feinstein asked federal regulators to set a regional price cap on wholesale electricity to prevent the high prices that have plagued California.
On Friday, the Federal Energy Regulatory Commission lifted price caps in California, a move Davis opposed.
Record wholesale power prices followed, and PG&E warned it was going broke.
On Wednesday, Richardson called for talks involving all the major players, including state and federal regulators and utilities. PG&E Chief Executive Officer Robert Glynn Jr. praised Richardson’s action and said his utility would participate in any such meeting.
The ISO’s Fluckiger warned earlier Wednesday that officials might have to interrupt power to about a million customers Wednesday afternoon and increase the blackouts to cover up to 4 million customers in late afternoon and early evening, when people came home from work and power demand hit a peak.
“The credit limits of utilities and what markets are willing to sell us have been reached and surpassed in many cases,” Fluckiger said.
“There are questions about utility solvency. That has come to a head today.”
Utilities would decide who would face blackouts, he said. They try to avoid areas with essential services such as hospitals, Fluckiger said.
Southern California Edison was optimistic blackouts wouldn’t occur in its territory, which includes metropolitan Los Angeles but not the city, spokesman Steve Hansen said.
An unprecedented Stage 3 emergency was issued last Thursday, meaning reserves had fallen below 1 1/2 percent. In that case, the state fended off the threat of rolling outages by turning off two power-sucking water pumps on the Delta.
Blackouts, if used, would probably last about an hour to 90 minutes and occur mostly in Northern California due to transmission limitations there, Fluckiger said.
California’s power market has been hit for months by tight supplies and price spikes. Electricity deregulation, cold weather and rising power costs have been blamed for the state’s most recent problems.
California approved a phased-in deregulation of the electricity market in 1996 to try to lower prices for consumers through competition, but so far it has led to higher energy prices.
The Northwest, heavily dependent on hydroelectric power, has faced low water tables and had to import electricity from California and other states.
Gas-fired generators could be brought on line to ease the situation but natural gas prices are so high they would not cover the operating costs, Fluckiger said.
“Requests have been made to operate those facilities and then have the utilities pay for those excess gas costs,” he said. “The utilities have not been able to do so. They have requested permission from the PUC to be able to pass those costs through to customers.”
Wholesale power costs have been soaring, due in large part to skyrocketing prices for natural gas. Wall Street is worried about utilities’ economic health, and on Tuesday, a consumer group urged the state to seize and run the strapped $20 billion electricity system.
A Stage 2 alert was declared Wednesday afternoon, meaning power reserves fell below 5 percent and some customers, mainly businesses, can be asked to reduce power use in exchange for lower rates. A Stage 1 alert was in effect Wednesday morning, meaning power reserves were below 7 percent and all power users were asked to conserve.
Stage 1 and 2 emergencies have become routine this month, but last Thursday’s Stage 3 marked the first time the threat of blackouts loomed.
On the Net:
Independent System Operator: http://www.caiso.com/
EDITOR’S NOTE: Associated Press writers Bart Jansen in Washington and Don Thompson in Folsom, Calif., contributed to this report.