Power failures
'a wake-up call'
Jul 30, 2006 - Contra Costa Times, Walnut Creek,
Calif.
Author(s): Rick Jurgens
Jul. 30--When it comes to electricity problems, Californians thought
they had seen it all.
Just five years ago, wholesale power prices soared and rolling
blackouts became a painful fact of life.
But after former Gov. Gray Davis opened the state treasury to buy
power, and a recession slowed consumption, the crisis passed.
Electricity issues receded into the background.
Until last week. Statewide electricity outages again sent politicians
and the public scrambling to find out what happened. Like the proverbial
generals who prepare to fight the last war but are never ready for the
next one, many of those seeking answers focused on whether what happened
was a replay of the crisis of 2000- 01.
It wasn't.
During that earlier episode, a witch's brew of physical shortages,
financial pressures and market manipulation choked off power supplies.
This time around, the mainline power system stood up through the heat
wave; problems occurred only with the local distribution network.
Yet squeaking through this crisis offers no assurance that the
state's power supplies and grid will be ready for the next test. "I
think this is a big wake-up call for everybody," said Jan Smutny- Jones,
executive director of the California Independent Energy Producers
Association.
Those who hear that call will find that a prescription for action
includes more power plants, more conservation and more certainty.
That last item might prove to be the toughest. California now relies
on a mix of competitive markets and regulated utility monopolies that
was cobbled together to end its last crisis.
So far, that system hasn't encouraged many investors to open their
checkbooks and add more capacity, while conservation efforts have
lagged.
Even the state Public Utilities Commission, the main architect of the
current setup, recently worried that the status quo seemed to be a
"recipe for stalemate and, ultimately, scarcity."
Some action is in the works. Last week, the PUC ordered utilities to
prepare for an "urgent need" for at least 3,900 megawatts of new power
plant capacity by 2009.
That should set things in motion, Smutny-Jones said. "There is a lot
of pent-up interest in both building and modernizing power plants in
California," he said.
Severin Borenstein, director of the UC Energy Institute, said that
although more capacity is needed, the recent episode -- in which total
statewide electricity demand soared above forecasts -- shows that rates
need to be adjusted so consumers pay more when electricity use peaks.
Some consumer advocates remain wary of proposals to allow that. "To
the extent we are regulated, we have a more robust system," said Mindy
Spatt, a spokeswoman for the Utility Reform Network. "If we want to
avoid the peak demand issues coming up, the way to do it is by making
air conditioner use more efficient," she added.
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