Blackouts Hobble Calif. for 2nd Day
Generating Plant Breakdowns Cited

California Power Cut Off
Sub shop cook Jay Ahn makes a cold ham and cheese sandwich in Palo Alto, Calif. during a rolling blackout. The shop specializes in hot baked sub sandwiches. (AP)

By William Booth and Rene Sanchez
Washington Post Staff Writers
Thursday, January 19, 2001; Page A01

LOS ANGELES, Jan. 18 -- California was smacked today with a second bout of rolling blackouts that were more extensive and disruptive than the first, even as the state government itself struggled mightily to buy enough power to keep the lights on.

The power outages struck central and Northern California this morning and ended around noon, affecting about 1.5 million customers in a patchwork that covered almost two-thirds of the state. The immediate cause was the breakdown of three large power plants in California and elsewhere in the West. Further blackouts appeared less likely for this evening, with the repair of the broken plants.

But the desperation of the past few days and the stabs at immediate fixes by the governor and the Legislature have obscured the fact that California's long-range energy future promises almost certain electricity shortfalls, more rolling blackouts and steep price increases.

In essence, many officials have begun to conclude that the state's hunger for electricity has outstripped its supplies, particularly as the rest of the West increases its need for power, making the other states less able to help California.

Kellan Fluckiger, the chief executive of the California Independent System Operator, which manages the state's power grid, said today that even if all the broken power plants in the state are repaired and all the hydroelectric generators have enough water to spin their turbines, "the likelihood remains high" that California will be battered by blackouts this summer.

Today's outages were deeper and more widespread than those on Wednesday, affecting three times as many customers. The rolling blackouts cut power in big cities and small towns, from the Oregon border in the north and the Bay Area to Bakersfield in central California.

Hardest hit were the customers of Pacific Gas & Electric, one of two California utility companies that are teetering on the edge of bankruptcy.

Sacramento and San Francisco again suffered a series of hour-long blackouts, which moved from neighborhood to neighborhood. The sporadic nature of the blackouts, and the lack of warning, increased the frustration of residents and businesses. Schools were closed; ATMs went down; and intersections were again filled with officers forced to direct traffic.

As the blackouts began to make the energy crisis real, state and local officials said they were warning those dependent on electricity for life-supporting medical equipment to have alternative power supplies ready. Fire department officials said a few dozen people got stuck in elevators.

In San Francisco, the city attorney, Louise Renne, plans to file a lawsuit claiming that the wholesale power producers were manipulating the markets to rip off consumers -- a charge the suppliers deny.

"It just suddenly went dark," said Shawn Lynch, corporate marketing manager at Knowledge Beginnings in Marin County, just north of San Francisco. "We didn't know what to do with ourselves. We just all gathered in the company's kitchen."

"I was in the middle of a presentation" when the two-hour outage began, said Lynch. He noted that the energy crisis reminded him about one golden rule of working on a computer: "I will remember to save my work constantly."

Today's blackouts came after Gov. Gray Davis (D) declared a state of emergency Wednesday night, which authorized the state government to buy power and sell it to the struggling utilities.

Davis's move seemed to soothe, at least temporarily, some of the wholesale power suppliers that have been wary of selling electricity to California's largest utilities because of their dire financial straits.

By demanding overdue payments immediately, the power companies could drive the debt-ridden utilities into instant bankruptcy -- and plunge the state deeper into crisis.

But after weeks of harsh verbal feuding -- Davis has denounced the wholesale energy companies as "pirates" -- the governor and the power suppliers sounded more willing, in the aftermath of the blackouts, to strike a temporary compromise to keep power flowing around the state.

Gary Ackerman of the Western Power Trading Forum, which represents several dozen of the wholesale energy companies that supply California with power, today called the emergency declaration by Davis "a good step."

Still, Ackerman stressed that many companies are still wary of dealing with the California utilities because they fear they might never get paid. "A lot of them still want to sit on the fence and see what happens in the next few days," he said.

President-elect Bush, who has ruled out federal intervention to control electricity prices, discouraged any notion of a U.S. bailout to ease the energy crisis, saying today that California officials must "correct the law that has caused some of this to happen."

He also dismissed the federal price caps sought by Davis, and instead proposed relaxing the pollution rules that he said keep the state's power plants from running at full speed.

California, most experts now agree, finds itself in a power crisis because it only partially deregulated its energy markets. It allowed wholesale prices for power to rise, but it kept price caps in place for the utility companies, which deliver the power to customers. The wholesalers have made a mint; the utility companies are broke.

But the state took a significant turn away from deregulation today when Davis signed into law another measure the Legislature just passed at top speed in hopes of easing the crisis. The measure blocks utility companies from selling the power plants they still own in the state and forces them to sell the electricity generated there to California consumers at reasonable rates. Davis called the decision the first of what could be many moves "to take back control" of the power produced in California.

To alleviate the immediate shortfalls in energy brought about by wary sellers, Davis also urged state lawmakers today to shift money -- at least several hundred million dollars -- to California's Department of Water Resources so that it can buy enough power from generating companies at least for the next week.

The department was chosen as the state's broker because it is responsible for pumping water through the state's network of canals and, thus, routinely buys limited amounts of power to operate its system.

By late afternoon, in what became another frantic and confusing day in Sacramento, lawmakers were still rushing to craft such a bill -- or to send another emergency measure, passed by the State Assembly Tuesday night, to the governor's desk. It appeared unlikely that any action would be taken until Friday.

Some lawmakers said that despite the pressure from Davis, they were reluctant to essentially sign a blank, open-ended check either to keep the utilities afloat or to keep power flowing. "If we are going to bleed so much money in this," said one legislative official, "we want an endgame. Otherwise, where does it stop?"

But the Legislature may have no choice but to act in haste. "We know we have an emergency," said Paul Hefner, an aide to Assembly Speaker Robert M. Hertzberg (D). "We have to do whatever it takes to keep the lights on."

The day began with another Stage Three alert, which meant that power reserves had fallen seriously low, to 1.5 percent of demand. Managers of the state's electric grid spent the day buying power hour-by-hour on the spot market to keep the system going.

The state power managers predicted that today their peak demand would be about 30,800 megawatts of electricity. A megawatt is enough to serve about 1,000 homes. On Wednesday night, the power managers said they were about 18,000 megawatts short for today. It is believed to be the largest shortfall ever, and it set in motion another panicky day of scrambling to buy power on the spot market.

The immediate problem was the temporary failure of two power plants in California and another one elsewhere in the West. The breakdowns were accompanied by a loss in hydroelectric power throughout the state and the Pacific Northwest, where many rivers and reservoirs are suffering from low water levels because of scant rain and snow.

Special correspondent Liz Garone contributed to this report.

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