Subject: LA Times Article: "Forecast Brighter but Electricity Price Soars"
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Date: Wed, 13 Dec 2000 09:43:00 -0800 (PST)

Forecast Brighter but Electricity Price Soars 
Utility: Northwest sends more power to California, but disruption from Utah 
prompts Stage 2 alert. 
By NANCY RIVERA BROOKS, Times Staff Writer
Los Angeles Times - Wednesday, December 13, 2000

?????Day 9 of California's electricity emergency promised an improving supply 
picture both within the state and through more imports from the Pacific 
Northwest, which on Tuesday continued to dodge the expected hit from an 
Arctic cold front. 
?????But a disruption in supplies from Utah late in the day ended up pushing 
California's power grid into a Stage 2 emergency. 
?????Meanwhile, California electricity prices continued to set records, a 
growing toll that consumer advocates worry will eventually come out of 
customers' pockets. 
?????"This is extraordinary," said Doug Heller, consumer advocate with the 
Foundation for Taxpayer and Consumer Rights in Santa Monica. "This is the 
harbinger of a recession to come." 
?????The average price of electricity sold Tuesday on the California Power 
Exchange for use today was $1,182.02 per megawatt-hour. Each day since a 
price cap of $250 per megawatt-hour was loosened Friday, a new record has 
been reached in the state's primary market for electricity. 
?????If that price were sustained for a month and consumers were no longer 
protected by the current rate freeze, the average monthly residential bill 
would jump to $620, Heller said. In December 1999, when wholesale prices were 
about $30 per megawatt-hour, the average residential bill for a Southern 
California Edison customer was $50. 
?????The so-called soft price cap, which requires power generators to detail 
the costs behind the price bid, is like one proposed by the Federal Energy 
Regulatory Commission, said Kellan Fluckiger, chief operating officer for the 
California Independent System Operator, which balances electricity supply and 
demand on the power grid serving 75% of the state. The move was intended to 
keep electricity from fleeing the state for higher prices elsewhere in the 
region and to help Cal-ISO run a more orderly market, he said. 
?????It is too early to tell whether the first aim was successful, Fluckiger 
said, but he added that the new cap has made life more predictable at 
Cal-ISO, where last week dozens of operators were making frantic last-minute 
calls to fill gaps in the energy supply to ward off blackouts. Those 
operators now can devote more time to running the grid. 
?????Electricity demand in California peaked at slightly more than 33,000 
megawatts Tuesday; about 8,500 megawatts of in-state power remained 
unavailable because power plants were undergoing maintenance. Electricity 
reserves fell to less than 5% late in the day when some power facilities in 
Utah suddenly tripped offline, cutting imports from the Southwest by 1,200 
megawatts. Cal-ISO then declared its 30th Stage 2 alert of the year. 
?????Customers of the Los Angeles Department of Water and Power are 
unaffected by the power emergencies. In fact, the city-owned utility just 
brought two idled plants back online to help supply the Cal-ISO grid, selling 
nearly 300 megawatts Tuesday at cost, said General Manager S. David Freeman. 
?????"We're doing our best to be a good neighbor," he said. 
?????Cal-ISO had hoped to avoid declaring a Stage 2 emergency, which often 
requires power interruptions to some big electricity users, but a bigger 
supply from the Pacific Northwest kept the more serious emergency at bay for 
most of the day. The most serious of all, a Stage 3 emergency, was declared 
Thursday, when the grid was within 1.5% of running out of power, but the 
state narrowly averted rolling blackouts. 
?????The expected Arctic cold front, which had Pacific Northwest utilities 
warning of the possibility of the region's first-ever Stage 2 emergency, 
"wimped out on us," said Ed Mosey, spokesman for the Bonneville Power 
Administration, which markets power from several federal dams. Temperatures 
were close to normal in parts of the region, and "we're at Stage Nothing 
now," Mosey said. 
?????The outlook improves for later in the week because some power plants 
that were offline should be repaired, returning as much as 1,500 megawatts of 
electricity in the state, Fluckiger of Cal-ISO said. One megawatt is enough 
to power about 1,000 homes. 
?????In the last few days, several power plants that had reached their 
air-pollution limits, particularly in Southern California, were returned to 
operation through agreements with the South Coast Air Quality Management 
District. 
?????As a result, Southern California has excess power, but it can't send it 
to electron-starved Northern California because of constraints on the key 
transmission link between the halves of the state, Fluckiger said. 
????? 
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