dbf - Speaking of continuous uptime, I've been surprised at all the election talk on the thread. How come nobody's talking about what will happen to Intel when California goes on the Iraqi method of power rationing since the state is quickly running out of juice...
Regards,
John <ggg>
Richardson Orders Emergency Action
As California Power Crunch Worsens
A WSJ.COM News Roundup
SACRAMENTO, Calif. -- U.S. Energy Secretary Bill Richardson ordered Northwest generators to sell electricity to California utilities Wednesday after state regulators warned that low power supplies could force rolling blackouts.
The warning came from the Independent System Operator, keeper of California's power grid. It said that electricity supplies were so perilously low that it might declare a Stage 3 power emergency for only the second time ever. At Stage 3, the grid can impose blackouts.
Mr. Richardson said at a Washington news conference that 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-generating associations send more power to California.
California has been caught in a power crunch over the past several days, in part because of cold weather in the Pacific Northwest -- where California buys much of its power -- and the shutdown of some generating plants for maintenance.
At the news conference in Washington, Gov. Gray Davis and Sen. Dianne Feinstein (D., Calif.) 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. Record wholesale power prices followed.
The problem became especially acute when about a dozen suppliers began demanding cash before selling power to California, Kellan Fluckiger, the ISO's chief operating officer, said Wednesday.
"The credit limits of utilities and what markets are willing to sell us have been reached and surpassed in many cases," Mr. Fluckiger said. "There are questions about utility solvency. That has come to a head today."
He said officials may have to interrupt power to as many as four million customers Wednesday afternoon and early evening, when people come home from work and power demand hits a peak.
An unprecedented Stage 3 emergency was issued on Thursday, meaning reserves had fallen below 1.5%. But the state fended off rolling outages by turning off two power-sucking water pumps.
This time, Mr. Fluckiger said any blackouts would probably last about an hour to 90 minutes and occur mostly in Northern California. "It's a fairly bleak picture," he said. "This thing will not change unless something is done to alleviate the credit situation."
A Stage 1 alert was declared Wednesday morning, meaning power reserves were below 7% and all power users are asked to conserve. Stage 1 and Stage 2 emergencies, in which power reserves fall below 5% and large commercial customers can be forced to shut down, have become routine this month, but last Thursday's Stage 3 was the only time the threat of blackouts loomed.
Contributing to the problem is a shortage of water to power hydroelectric generators in the Northwest and California, Mr. Fluckiger said. "We have reservoirs so low that we have people standing by them watching the situation to make sure it does not go below safe limits," he said.
The power crunch over the past few months has been blamed in part on electricity deregulation. 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.
At the same time, wholesale power costs have been soaring, in large part because of skyrocketing prices for natural gas. Wall Street is worried about utilities' financial health, and on Tuesday, a consumer group urged the state to seize and run the strapped $20 billion electricity system.
California's two largest utilities, Pacific Gas & Electric Corp. and Southern California Edison Co., are near bankruptcy due to skyrocketing wholesale power costs. The head of Edison International Inc., Southern California Edison Co.'s parent company, said Wednesday that the state should end its experiment with deregulation of the power market.
John E. Bryson said Southern California Edison won't be able to recover $3.5 billion in losses related to power purchases and continue serving its retail customers unless deregulation is scrapped and the firm is allowed to re-enter the power-generation business. Power suppliers were required to get out of the power-generation business as part of deregulation.
"To fund the $3.5 billion deficit and to finance the additional procurement of electricity, Edison has had to borrow huge sums of money in the commercial markets," Mr. Bryson said in a prepared statement. "This situation is not sustainable. The new market structure is broken and must be discarded." |
