Features

California struck by second day of blackouts

The Associated Press
Friday January 19, 2001

SACRAMENTO — The lights went out in nearly 2 million California homes and businesses Thursday in a second straight day of blackouts as state lawmakers struggled to find a way out of the deepening crisis. 

The blackouts began about 10 a.m. and stretched from the Bakersfield area of central California to Oregon, 500 miles away. The rolling outages lasted about two hours. 

Power managers said they expected to have enough power to avoid more blackouts at night, though more problems were possible Friday. 

Meanwhile, lawmakers considered a stopgap $400 million rescue plan in which the state would buy power on the open market and provide it to strapped utilities at little cost. The Senate Energy Committee approved it 10-7; the full Senate was expected to consider it Thursday evening. 

Gov. Gray Davis said he hoped to have the proposal, which would assure power over the next few days, on his desk by late evening. 

“It would be enormously helpful and it would save the state money, if I could sign a bill by late tonight,” Davis said. 

Hospitals and airports were exempt from the outages. And home-care patients who rely on electrically powered medical equipment because of lung disease or other ailments usually have batteries or backup generators. 

Utilities refused to disclose which areas were blacked out, but the effects were obvious: Traffic lights went out for a second day across the San Francisco Bay area, causing fender-benders in Palo Alto.  

Computer screens went dark, heaters and bank machines were silent and lights went out in classrooms. 

The power outage in Sun City Lincoln Hills, a retirement community near Sacramento, prompted Jim Datzman, 62, and his wife, Sandy, 59, to take their two grandsons to a community playground.  

The 2-year-old twins, Corbin and Quinn, had been watching Barney on television when the power went out. 

“We saw a lot of our neighbors lifting our garages up manually, which of course isn’t too good for seniors,” Datzman said. 

With no end to the crisis in sight, Californians began stocking up on flashlights, candles and firewood. Stores were swamped with calls from businesses looking for generators. 

The Independent System Operator, keeper of the state power grid, said the latest blackouts were caused by a loss of thousands of megawatts from the Northwest, where hydroelectric dams are low on water. One megawatt is enough to power 1,000 homes. 

The first mandatory blackouts came Wednesday, also in northern and central California. Northern California has faced the outages first because of a transmission-line bottleneck that makes it harder for the northern part of the state to bring in power. Southern California has been spared from rolling blackouts so far. 

On Wednesday, Davis declared a state of emergency and ordered the state Water Resources Department to temporarily buy up to $1 billion in power from wholesalers and provide it to the state’s two largest utilities, Pacific Gas & Electric Co. and Southern California Edison. Both are short on power and in deep financial trouble. 

Davis made no mention of making the utilities pay for the power. That means the cost could fall on the taxpayers. 

In the Legislature, meanwhile, lawmakers tried to work out longer-term solutions under which the state would buy even larger amounts of power for up to five years.  

Many lawmakers were concerned about whether the state would get its money back from the utilities. 

“We are in a terrible situation,” said Sen. Debra Bowen, who heads the Senate energy committee. 

The emergency action didn’t help the utilities’ standing in the financial community, where the companies have become pariahs. 

The state’s move “stops the bleeding, but these companies have lost so much blood that it’s going to take a lot to pump them back up again,” said Richard Cortright, an analyst for Standard & Poor’s, which has downgraded the utilities’ credit ratings to junk status. 

The governor signed legislation Thursday afternoon overhauling the ISO board to remove those with a direct stake in buying and selling power. Instead, the governor will appoint a five-member board. 

Davis also signed a second piece of legislation that would roll back California’s deregulation by dropping a requirement that utilities sell their power plants. 

The crisis is blamed in part on the Northwest’s limited supplies of hydroelectric power and California’s deregulation of its electricity industry. 

Under the plan, utilities were forced to sell their power plants and buy electricity on the open market, an approach that was supposed to lead to lower rates. But wholesale prices for electricity have soared and rate caps imposed under deregulation have prevented utilities from passing on those costs to customers. 

PG&E and SoCal Edison estimate they have lost more than $11 billion. They have both defaulted on millions in dollars in bills and lender payments and have warned that they are sliding toward bankruptcy. 

SoCal Edison was forced to buy power outside the state Power Exchange on Thursday after missing a deadline for paying $215 million to cover the utility’s unpaid bills. 

That forced the exchange to seize Edison’s forward contracts as collateral to cover the debt. The utility must post collateral before it can return to the market, exchange spokesman Jesus Arredondo said. 

Edison spokesman Kevin Kelley declined to comment on the move: “Things are too much in flux,” he said. 

Arredondo would not say where SoCal Edison bought its power Thursday. When asked what the utility could do were it unable to post collateral, Arredondo said, “Go shopping for energy somewhere else.” 

The utility was expected to be able to obtain power through the state, although it has not yet done so, said Davis spokesman Steve Maviglio. 

PG&E has also warned that it may have to cut off the supply of natural gas to customers that include power plants. Suppliers are threatening to stop dealing with the cash-starved utility for fear they won’t be paid. 

The stock market appeared a little more hopeful about the utilities’ outlook as the stocks of their corporate parents edged up Thursday. PG&E Corp.’s shares gained 12 1/2 cents to close at $9.75 and Edison International’s shares rose 12 1/2 cents to close at $9. 

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On the Net: 

California Independent System Operator: http://www.caiso.com