- The Washington Times - Thursday, January 18, 2001

SACRAMENTO, Calif. Gov. Gray Davis has declared a state of emergency because of the California power crisis.
Mr. Davis also said late last night that he's calling on lawmakers to pass legislation to give the state the authority and the resources "to keep the lights on in California."
In his announcement, Mr. Davis said he had instructed the state's Department of Water Resources to buy power to keep the lights on in California for the next week to 10 days, while his administration tries to resolve the energy crisis.
Earlier yesterday, the state cut off power to hundreds of thousands of residents in the first rolling blackouts imposed during its electricity crisis and the first mandatory blackouts since World War II.
Lights blinked off about noon in parts of San Francisco, Sacramento and San Jose, as well as other sections of Silicon Valley.
No major problems were reported, but the outages knocked out TV stations, automated teller machines and traffic lights across the San Francisco Bay area, backing up traffic and forcing college professors to hold class in dim classrooms. Police officers directed traffic, and store owners turned to pocket calculators.
The rotating, hour-long blackouts in northern and central parts of the state were halted in the afternoon. A second wave of blackouts in the evening was averted as the power supply met demands.
Los Angeles was considered safe because it has its own utility.
Utilities avoided cutting power to essential services such as hospitals and airports. Citing security reasons, they declined to identify exactly which areas lost power.
"If you knew power was out in certain areas, you'd also know that alarms were out and security cameras were out," said Ron Low, spokesman for Pacific Gas & Electric Co., whose territory stretches from Oregon to Bakersfield, 500 miles away.
Those affected in the first wave of blackouts included 200,000 to 500,000 PG&E; customers in the San Francisco area, and thousands more in Sacramento, Modesto and Turlock.
Despite several close calls in recent weeks, it was the first time the Independent System Operator (ISO), the keeper of the grid, failed to scrounge up enough electricity to avoid scattered outages.
Jim Detmers, ISO managing director of operations, said several power plants that were expected to return to full operation yesterday after repairs did not.
He also said out-of-state power suppliers were not selling badly needed electricity to California because the state's two largest utilities were on the verge of bankruptcy.
Energy Secretary Bill Richardson extended an emergency order requiring power suppliers to sell electricity to California until midnight Tuesday.
"The order makes it clear we have the power to enforce the order should we find that any suppliers haven't complied," said Matt Nerzig, a Richardson spokesman. "We wouldn't be making it clear if we hadn't heard reports that this might be happening."
The state also implemented its plan to cut power 5 percent by scaling back use in state offices and shutting down huge pumps that send water from Northern California to the south.
California has struggled for months with the effects of deregulating its electricity market. Under the plan, private utilities had to sell their power plants and buy electricity on the open market an approach that was supposed to lead to lower rates.
But PG&E; and the state's other major utility, Southern California Edison Co., have lost at least $10 billion because of soaring wholesale prices for electricity and because rate caps imposed under deregulation have prevented them from passing on those costs to customers.
State lawmakers are scrambling to find a fix. The Assembly approved a plan Tuesday under which the state would buy electricity from wholesalers and sell it to struggling utilities at about one-fifth the going market rate. The measure now moves to the Senate.
The help cannot come too soon.
SoCal Edison, which serves 11 million people, said it cannot pay $596 million in bills due now and will run out of cash Feb. 2. PG&E;, which serves 14 million people, told shareholders that lenders have refused to provide the remaining $912 million available under its credit lines.
The lenders cited Standard & Poor's action to downgrade the credit ratings of SoCal Edison and PG&E; to junk-bond status.
Stripped of its financial lifeline, PG&E; could be suspended Friday from the California Power Exchange a crucial energy source. PG&E; is seeking more time to pay its bills and keep electricity flowing to Northern California, utility spokesman Shawn Cooper said.
Wholesale power prices have risen dramatically since June, in part because of a hot summer and a cold winter. In 1999, they averaged perhaps 3.5 cents a kilowatt. Now they are running about 30 cents, or far higher.
After the blackouts began, Vic Parrish, chief executive for Energy Northwest, a 13-utility public power consortium based in Richland, Wash., said the industry had failed.
"We as an agency and an industry are socially and morally obligated to make sure people have safe power day and night," he said. "Right now, there are handicapped people sitting alone in the dark in California, wondering if the lights will ever come on again. If there's one person like that, we haven't done our … job."


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