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Why the state can't keep up with the
demand for energy --even in
December
David Lazarus, Chronicle Staff Writer
Thursday, December 7, 2000
The lights were deliberately dimmed at Santa Clara's
Intel Corp. yesterday as California officials once again
warned that the state's power supply had dipped to
dangerously low levels.
Intel is one of dozens of Bay Area companies that had
voluntarily agreed to help conserve electricity during
shortages -- in the summertime.
"This comes as a surprise," said Mark Pettinger, a
spokesman for the chipmaker. "The voluntary
reduction program was designed for the summer load
only."
Unusually cold weather, reductions in power from
out-of-state generators, a spike in natural gas prices
and plants shut down for maintenance have combined
to place new strains on California's power grid.
The state's energy crisis is not simply a factor of too
many fluorescent bulbs and air conditioners running in
the hot summer months -- the cause, officials had
said, for much of the state's power woes.
Residents now are being asked for the first time to cut
back on Christmas lights, making it painfully clear that
California is unable to find sufficient power to meet its
needs at any time of the year.
And the situation is likely to grow worse before
construction of new plants helps to relieve the
situation several years down the road.
"Californians should be very concerned," said Jim
Detmers, managing director of operations for the
Independent System Operator, the nonprofit agency
that oversees the state's power grid. "This issue is
very large."
The ISO issued its third power warning in as many
days yesterday as California's power reserves fell
below 5 percent of load on the system, a so- called
Stage 2 emergency.
Power cuts were initiated for select industrial
customers that have agreed to power reductions in
return for discounted rates at other times of the year.
The state came close Tuesday to its first Stage 3
emergency, in which rolling blackouts are
implemented in entire neighborhoods to ease demand
on the power grid.
There is a strong possibility that a Stage 3 emergency
could be called this weekend, when a cold snap
throughout the West Coast is expected to cause
temperatures to drop more than 10 degrees below
normal, Detmers said.
"The last thing I want to deal with is the family of
somebody who gets killed in an intersection because
the traffic lights have stopped during a blackout," he
said.
So why is California still feeling the pinch in what
should be a period of low power demand?
The answer, not surprisingly, is complex. A number of
factors have conspired to keep the supply of available
electricity from meeting ever- increasing demand.
Some of these things could have been avoided with
better planning. Others are just bad luck.
"It's a problem," said Ron Low, a spokesman for
Pacific Gas and Electric Co.
"We're asking customers to conserve energy as much
as possible."
The bottom line is that not enough power is being
generated in California to meet the state's energy
needs. No new plants have been constructed in the
past 10 years.
For this reason, California draws about 25 percent of
its juice from out-of- state generators, which leaves
Californians vulnerable to cutbacks in supplies when
those generators cannot or will not allow power to
flow freely.
An unusually dry summer in Oregon and Washington
has reduced generating capacity at hydroelectric dams
in the two states. With cold weather now boosting
electricity demand in the Pacific Northwest, generators
in the region are unable to produce enough power to
also meet California's needs.
Then there is the complication of out-of-state
generators' simply declining to sell their output to
California utilities.
On Tuesday, for example, prices in California's
wholesale power market reached their price cap of
$250 per megawatt hour. Yet while that amount is
eight times the level of a year ago, it's still not top
dollar for power companies looking to maximize
profits.
In the Northwest, utilities were willing to pony up as
much as $1,200 per megawatt hour, which caused a
significant amount of electricity to be channeled up
north instead of into California's grid.
Bob Finkelstein, staff attorney for The Utility Reform
Network in San Francisco, acknowledged that there
was nothing unethical about power companies seeking
out the highest bidders. But he also said "there might
be a conspiratorial edge to it."
Finkelstein believes that by snubbing California, power
companies are sending an implicit message to the
state's political and regulatory officials.
"They're saying, 'You better not try to re-regulate
generation,' " he said.
Whether that is indeed the case, power companies
have made no secret of their desire for California's
wholesale price caps to be lifted and have argued that
any return to strict regulation of the energy industry
will only deter construction of much-needed new
plants.
The state's electricity market was deregulated in
1996. The idea at the time was that an increase in
competition would inevitably lead to lower prices.
As it turned out, competition has remained limited.
And in San Diego, the first California city to feel the
impact of unregulated power rates, average bills more
than doubled last summer.
Meanwhile, the state's power troubles have been
exacerbated by a surge in natural gas prices, which
have tripled in the past year. Most electricity plants
now run on natural gas and become exponentially
more expensive to operate when fuel costs increase.
The U.S. Department of Energy said in a report
yesterday that soaring natural gas prices and
unusually chilly weather would cause average heating
bills nationwide to jump by 40 percent this winter.
PG&E is estimating that heating bills for its customers
this month will increase 50 percent to about $77 from
$50 a year ago.
"The situation in California is characterized by low gas
storage, gas pipeline bottlenecks, continuing cold
weather, high demand and low hydro and nuclear
generating capacity," the Energy Department said.
"These supply problems are following on last
summer's supply problems with no end in sight."
At the same time, a number of plants have been taken
offline for routine maintenance. Such repairs have to
be done at some point, and power companies
traditionally have looked to the fall and winter months
as the time of lowest demand.
No longer. With demand remaining fairly constant on a
year-round basis, if not steadily increasing, each
maintenance cycle only makes a bad problem even
worse.
According to the ISO, about 10 percent of California's
generation capacity is now offline for repairs, which
prompted the agency Tuesday to ask consumers to go
easy on the Christmas lights this year.
The ISO's Detmers said the state's difficulties would
continue well into next year as shivery temperatures
push the power grid to its limits. And then, just when
people may think they're through the worst of it,
summer is around the corner.
Detmers remembers how bad things got this year
when chronic shortages maintained a threat of
blackouts statewide.
"Next summer," he said, "is going to be just as tough."
Power Pitfalls
--Demand for power has increased considerably over
the past decade, while no new electricity plants have
been built.
-- The fall is traditionally a low demand time for
electricity, so many generators have taken their plants
offline for repairs.
-- A number of plants have suffered forced power
reductions because of malfunctions, breakdowns or
other problems.
-- Natural gas, which fuels most electricity plants, is
becoming increasingly costly, making it less
economical for plants to produce power.
-- Power from sources outside the state, including the
Pacific Northwest, where California can buy excess
power to meet demand, is drying up because of needs
elsewhere.
How the Power Grid Works
California's power system is divided into four distinct
operating sectors -- generators, transmitters,
distributors and end users. Electricity is the one
commodity that cannot be stored, so the system
depends on a network that makes it available for use
as soon as it is delivered.
Generator: Any type of energy source.
Transformer: Boosts voltage for transmission.
Outlet: Underground feeder lines run to the customer
through steel or concrete conduits.
Distribution lines: Above ground or below ground.
Substation: Reduces voltage for public distribution.
Too much power can melt lines, and too little can
cause brownouts. A power failure in one part of the
grid can cascade, causing ripple effects in other parts
of the grid. |
