All is Not well in Wellsville
PG&E is Paying out $1 Million Per hour to 'Import' elect...
For Us power hungry Californians.....
Christmas lights are Blazing out here.......
Tim
Energy Chief Steps In
U.S. Energy Chief Steps In, Keeps Lights
On in California
Chronicle Staff Writers
Thursday, December 14, 2000
California narrowly averted an unprecedented
electricity crisis yesterday,
including widespread rolling blackouts, only after the
U.S. energy secretary exercised emergency authority
and ordered 12 generating companies to sell power to
California.
The generators, many based outside California, had
refused to sell electricity to utilities such as Pacific Gas
and Electric Co. because they feared they would not
be paid.
"Our objective is to keep the lights on," said Energy
Secretary Bill Richardson.
California's electricity problems had been marginally
improving in recent days. Many generators returned to
operation and put more power into the marketplace,
and imports from other regions increased.
But a severe cold front in the northwest on
Wednesday dropped imports from there to virtually
zero.
When the 12 power companies balked later yesterday
morning, officials who manage the state's electricity
grid feared that by 1 p.m. they would be short of
power by about 1,000 megawatts -- enough juice to
power 1 million homes.
Officials estimated that by the peak demand period of
5 p.m. to 7 p.m., they would have a shortfall of 3,000
megawatts -- or 3 million homes. Had that occurred, it
would have been the largest shortfall ever because of
limited supply, officials of the California Independent
System Operator said.
The ISO yesterday declared a Stage 2 power
emergency, meaning that demand for electricity rose
to within 5 percent of the actual supply. It was the
30th Stage 2 alert the ISO has called since May.
ELECTED OFFICIALS WORRIED
Gov. Gray Davis and U.S. Sen. Dianne Feinstein
expressed dismay that rising electricity prices were
harming the state's economy.
Feinstein said growers were worried they would not
be able to protect citrus orchards from freezes if there
were no electricity. She also said she had received
letters from workers who were laid off because their
employers could not afford higher electricity costs.
In addition, Feinstein worried about the fallout if
energy prices bankrupt California's two largest
utilities, PG&E and Southern California Edison.
"They employ 100,000 people in the state," she said.
"It would have a dramatic ripple effect on the
economy."
In other developments Wednesday:
-- John Bryson, the chief executive of Edison
International, called for the full-scale re-regulation of
California's electricity system;
-- Standard & Poors warned it might downgrade
PG&E's and Edison's creditworthiness, making it more
difficult and expensive for them to borrow money;
-- The president of the California Public Utilities
Commission, Loretta Lynch, reversed its stance and
said it would consider raising retail electricity rates
and ending rate freezes even though they were frozen
by law under deregulation, taking note of the
companies' precarious financial stability.
Richardson's order, announced after noon on the West
Coast, and other emergency measures helped avert
what otherwise would have been rolling blackouts
throughout the state affecting millions of households.
The order, combined with other emergency measures,
succeeded in drawing about 5,000 more megawatts of
power into the state to cover peak demand, the ISO
said.
GENERATORS FEAR CREDIT RISK
The power companies that generate electricity and
sell it to California had refused to do so earlier in the
day out of fears that the state's investor- owned
utilities -- PG&E and Southern California Edison --
would not be able to pay their bills.
Wholesale power costs have risen to unseen levels in
California in recent weeks as supply has tightened,
from $30 in July 1999 to more than $1,400 per
megawatt hour for power delivered during peak times
on Wednesday. As a result, the utilities have piled on
billions of dollars in debt to continue paying the bills.
In fact, PG&E has warned it may soon run out of
money and the ability to secure more credit to
continue buying power.
Davis, who was in Washington to plead California's
case with officials of the Federal Energy Regulatory
Commission, tried to put public pressure on FERC
officials to help repair the dysfunctional California
market.
"Because of the extraordinarily high prices being
charged our utilities, bankruptcy is a distinct
possibility," said Davis, appearing at a news
conference with Richardson and Feinstein. "The lights
will go off if FERC does not act."
FERC ACTION EXPECTED
Feinstein and Davis asked FERC to establish an
immediate region-wide wholesale price cap to prevent
generators from playing states off one another to get
the highest price for their electricity.
They also asked FERC to mandate long-term contracts
between privately owned electricity generators and
utilities that would prevent price fluctuations.
FERC is expected to issue a final order addressing
California's electricity crisis tomorrow.
James Hoecker, FERC's chairman, who has taken
much of the wrath from Davis and other officials, said
he could not comment on what action the board would
take.
"As you can see, FERC is a small agency with a large
responsibility," he said. "I believe that the commission
is going to take strong action soon. I want to assure
people that FERC will be part of the solution, not part
of the problem."
It was a day of dubious firsts. Secretary Richardson,
speaking at a news conference in Washington, said he
had never before enacted emergency authority,
granted under the Federal Power Act, and added that
it had been used extremely rarely in the past.
He also said he would determine a fair rate at which
the generators would sell power to California, rather
than the astronomical prices for which it has been
going in the last few days.
The 12 Tight-Fisted Power GeneratorsThe following
companies were identified by the Davis administration
yesterday as having refused to supply California with
more power unless they received cash payments in
advance or other guarantees they would be paid: |
