Subject: SF Chron Article: "Neighbors In a Power Struggle
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Date: Wed, 13 Dec 2000 05:18:00 -0800 (PST)

Neighbors In a Power Struggle
State, Northwest trade blame for energy woes 
David Lazarus, Chronicle Staff Writer
Wednesday,?December 13, 2000 
,2000 San Francisco Chronicle 
California officials have blamed the state's energy woes in part on the 
Pacific Northwest's not having enough extra power to share. 
But in Oregon and Washington, they're blaming California for not coming 
through on a decades-old bargain to supply much-needed electricity in the 
winter in return for the Northwest's juice in the summer. 
If the current power shortages worsen, consumers throughout the West Coast 
face an increasing likelihood of blackouts. 
Until now, California and the Pacific Northwest have enjoyed a mutually 
beneficial power-sharing arrangement whereby shortfalls in one area are made 
up for by surpluses in the other. 
"We've had a traditional reliance on California in the winter," said Dulcy 
Mahar, a spokeswoman for the Bonneville Power Administration in Portland, 
Ore., 
which sells power produced by federal dams in the region. "Without 
California's electricity, we've had to take some extraordinary steps." 
Chief among those steps is tapping into dam reservoirs that, in a normal 
year, would be used to generate power next summer. 
As a result, the risk is growing day by day that the Northwest will be unable 
to help meet California's surging energy demand in the months ahead, when 
millions of air conditioners are added to the state's already strained 
electricity system. 
"Next summer is going to be twice as bad as last summer," predicted Kellan 
Fluckiger, chief operating officer of the California Independent System 
Operator, which oversees the state's power network. 
"Each summer after that is going to get progressively worse until blackouts 
become a normal part of a hot summer afternoon," he said. 
The ISO called a Stage 2 power emergency at 5:10 p.m. yesterday as reserves 
fell once again to dangerously low levels. Power was cut to some voluntary 
users. 
Meanwhile, federal regulators agreed to consider a request from the 
California Power Exchange, which coordinates the state's wholesale power 
market, to restore price caps for electricity rates. A $250-per-megawatt 
limit was lifted by state officials last week. 
On Monday, wholesale power prices spiked as high as $900 and are expected to 
top $1,000 today. Last year at this time, electricity could be bought by 
utilities such as San Francisco's Pacific Gas & Electric Co. for a mere $45 
per megawatt. 
Against this backdrop, California and Pacific Northwest power agencies are 
scrambling to meet demand as a previously complementary relationship falls 
apart. 
"We never saw such a tight demand-supply situation," said John Harrison, a 
spokesman for the Northwest Power Planning Council, a four-state body charged 
with balancing energy production with environmental concerns. "The timing of 
this really caught us by surprise." 
California and the Northwest recognized years ago that power needs in the two 
regions are completely dissimilar. In California, demand for electricity 
soars in the summer, when all those air conditioners add to the state's 
already considerable energy load. 
In Oregon and Washington, demand climbs in the winter because nearly half of 
all homes are heated with electricity, a reflection of the region's 
historically dirt-cheap power prices. 
More than half of all power in Oregon, Washington, Idaho and western Montana 
comes from dams along the Columbia, Snake and other rivers. These include 28 
federally owned dams from which the Bonneville Power Administration sells 
electricity to customers basically at cost. 
For decades, the arrangement worked fine. California helped heat the 
Northwest in the winter, and the Northwest helped cool California in the 
summer. 
This year, however, everything changed. As California stumbled from one 
crisis to another amid a bungled effort to deregulate the power market, 
demand far outpaced available supply and a threat of blackouts has persisted 
since June. 
The state is now grappling with an unprecedented winter power shortage, 
caused in large part by an unusually high number of plants being down for 
scheduled and unscheduled maintenance or because they have exceeded annual 
pollution limits. 
Whereas California normally would be exporting power to other states at this 
time of year, it is now frantically hunting for out-of-state generators that 
can come through in a pinch. 
And without excess California energy supplies making their way across the 
border, power officials in the Northwest are struggling to find enough juice 
to keep homes warm as temperatures plunge this week about 10 degrees below 
normal. 
An arctic cold snap expected to hit last night will only make matters worse. 
According to official projections, the Northwest will come up short next 
month in meeting its power needs by more than 4,000 megawatts -- roughly the 
amount of electricity required to light up four cities the size of Portland. 
Exacerbating the situation is the fact that the region has faced an unusually 
dry winter so far. This has lowered reservoir levels behind dams and 
indicates a smaller-than-normal snowpack in the mountains, which would affect 
rivers in the spring. 
Mahar also said Bonneville and other power providers already were tapping 
into reservoirs to provide additional power through the winter. Unless the 
rain and snow arrive in full fury next month, Mahar said, this almost 
certainly will reduce the Northwest's ability to help meet California's 
energy needs in the summer. 
"Our reservoirs are like savings accounts," she said. "When we cash them out, 
we don't have enough left in the bank." 
Steve Johnson, executive director of the Washington Public Utility District 
Association, a Seattle trade group representing 28 regional utilities, said 
the shortfall in power from California would force the Northwest to improvise 
for weeks to come. 
"We're trying to buy energy every place we can find it," he said. 
Like many observers north of the border, Johnson is dismayed by California's 
efforts to deregulate the state's electricity market. "We think you made a 
terrible mess of it," he said. 
And now, he pointed out, California's troubles have become a headache for 
other states as well -- with no end to the problem in sight.