- The Washington Times - Friday, December 8, 2000

SACRAMENTO, Calif. California edged toward an unprecedented energy crisis yesterday as hundreds of companies were ordered to cut back on electricity use and officials warned of the possibility of rolling blackouts.
"We are really hurting today. The state is scrambling to find energy," said Pat Dorinson, spokesman for the California Independent System Operator, a state power agency.
The power crunch which hit before winter had even begun has been blamed on cold weather in the Northwest, the shutdown of some power plants for repairs, and the effects of utility deregulation in California.
With supplies of electricity running perilously low, California officials declared a Stage Two emergency at 4 a.m. yesterday. It was the fourth such declaration in as many days and the eighth in three weeks.
Under the Stage Two emergency, hundreds of companies that had signed "interruptible" service contracts in exchange for huge rebates were ordered to reduce or shut down their power. Others awaited notification to do likewise.
Computer-chip manufacturer Intel stood ready to turn off 50 percent of the lights at its 6,500-employee installation in Folsom.
"If that's not enough, we'll take the lights down 100 percent and work in the dark," Intel spokesman Bill Mueller said.
Officials said the crisis could elevate to a Stage Three later in the day, which would trigger forced outages. Rolling blackouts would last about an hour in any given area and could affect hundreds of thousands of homes and businesses across the state.
A Stage Two emergency is declared when power reserves fall or are expected to fall below 5 percent. California has never before had a statewide Stage Three emergency, which is declared when reserves fall below 1.5 percent.
The alerts are the latest in a series of problems to bedevil California's deregulated electricity system.
The phased-in deregulation of California's $20 billion electrical power industry was supposed to lower prices by creating greater competition. But demand for electricity has outstripped supply, in part because of a growing population and a booming high-tech economy.
Electricity is also in short supply because energy companies held off building new power plants while deregulation was in the planning stages. In addition, deregulation has forced utilities to sell off their power-generating assets, such as dams and plants, and import electricity from neighboring states, where power demand is high right now because of a cold snap.
Earlier this week, energy companies and state officials asked Californians to delay turning on their Christmas lights until well after nightfall and to keep thermostats set at 68 degrees. After lighting the Christmas tree at the state Capitol, Gov. Gray Davis quickly pulled the plug to conserve energy.
California inspectors have begun surprise inspections of power plants that have closed for repairs to see whether the shutdowns were deliberate attempts to drive up costs.
Shutdowns were part of the reason that one-quarter of the system's capacity was down on Wednesday by 11,000 megawatts, enough to supply 11 million homes. Of that amount, state officials said, 4,000 megawatts were from plant breakdowns.

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