California governor declares state of emergency in electricity crisis

More blackouts possible Thursday morning

Experts fear California will face another power crisis Thursday morning, when thermostats are moved up, coffee makers started and offices switch on copiers and computers. That surge in power usage could drop electrical reserves down enough to cause blackouts around 7 a.m. PST (10 a.m. EST).

California's Independent System Operator (ISO) expects to receive less electricity from other states or Canada on Thursday than it did Wednesday, which means that blackouts, if they occur, would range statewide from near the Oregon border to San Diego.

Jim Detmer, managing director of ISO operations, said if the blackouts were reinstituted later in the day, "it will be a statewide event." He said, "The situation is very serious, extremely serious."

State power authorities are buying electricity literally by the hour. Power officials found a "small parcel of additional electricity" on Wednesday afternoon, enabling them to temporarily halt the first rolling blackouts ordered during California's protracted power crisis.

"Now we find ourselves in the situation where we are having to conserve a little bit over the afternoon so that we can mitigate the sharp peak we will get around 5 o'clock when people start going home and turning on the electricity," said Terry Winter, president and CEO of California's Independent System Operator (ISO), the state's power manager.

Wednesday's rolling blackouts, which began at 11:30 a.m. PST (2:30 p.m. EST) and lasted until 1:40 p.m. PST (4:40 p.m. EST), temporarily cut off power to at least 200,000 customers, including Apple Computer in the Bay area and parts of Silicon Valley.

Pacific Gas & Electric had received an order to cut off power to 500,000 customers, but the blackouts were stopped before that many clients were affected.

The extra power came from an unidentified company in the Pacific Northwest, which power officials described as "an angel on our shoulder."

Winter warned, however, that Thursday could bring more darkened hours.

"I hate to say this, but I think if people don't start to conserve and really make a concerted effort to not use power, we are right back in the same situation tomorrow," Winter said.

Warnings and security

Earlier, neighborhoods on the Pacific Gas and Electric system were darkened one by one, including parts of Santa Cruz, Capitola, San Jose, Cupertino, Oakland, Burlingame, San Francisco and Richmond. The Internet company Yahoo! was also alerted that it would lose power.

Automated teller machines in downtown San Francisco shut down, and at least two students were trapped in an elevator that stopped between floors at the Hastings School of Law.

Sherman Lau, working at S&S Groceries on Grant Street, said the power suddenly shut off about noon, pulling the plug on everything from food freezers and cash registers to the machines used to sell lottery tickets.

"I'm worried about my ice cream and milk," Lau said, adding that business had dropped sharply since the lights went out.

The blackouts cut off all electricity to homes, schools, businesses, factories, ATMs and even streetlights and traffic signals.

Authorities posted police at some intersections to help control traffic.

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 PG&E, whose territory stretches from Oregon to Bakersfield, 500 miles away.

Many parts of the state were unaffected. Los Angeles, for example, generates its own power and is not part of the state's power grid.

Why checkerboard blackouts?

Each block -- clusters of electronic circuits that may or may not be geographically linked -- is darkened for an hour to an hour and a half. The next block is then turned off before the power is restored to the first block, a process that could take up to an additional 30 minutes.

The blackouts, if they resume, may last through 9 p.m. PST (midnight EST) and as many as seven power blocks may be affected. The ISO is endeavoring to spread them through the PG&E system as widely as possible, to balance the system and reduce strain on any one region's electricity capacity.

The ISO issued a Stage 3 alert early Wednesday -- the third one in less than a week. The advisory comes amid cooler-than-normal temperatures in the state, which boosts demand for power.

A Stage 3 alert means electricity reserves have fallen below 1.5 percent and rolling blackouts are a possibility.

The state avoided rolling blackouts Tuesday after huge state pumps that move water from Northern California to the south were turned off temporarily, conserving enough electricity to power 600,000 homes, said Kellan Fluckiger, the ISO's chief operating officer.

Scrounging for electricity

Despite several close calls in recent weeks, Wednesday marked the first time the ISO, the keeper of the grid, failed to scrounge up enough electricity from around the country to avoid scattered outages.

The power crunch comes because neighboring states including Washington and Oregon, which supply California with hydroelectric power, are reluctant to sell it due to low water levels and demands in their own states.

In addition, with PG&E and SoCal Edison possibly facing bankruptcy, power vendors are reluctant to sell to them. The credit situation of PG&E is deteriorating, according to CNNfn, with their debt downgraded to "junk status" on Tuesday.

"We are trying to manage the picture here today, but we've come to the end of the road here as far as supply within California and out-of-state resources go," said Jim Detmers, ISO managing director of operations.

He added that the ISO was too busy trying to supply power to find out whether suppliers were ignoring a federal order to sell to California.

Detmers said another problem was that several power plants that were expected to return to full operation Wednesday after repairs did not.

Lawmakers consider fix-it plan

California has struggled for months with the effects of deregulating its electricity market. Under the plan, utilities had to sell their power plants and buy electricity on the open market -- an approach that was supposed to lead to lower rates.

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 on February 2.

PG&E, which serves 14 million people, had just $500 million in cash left as of January 10 and faces bills of $1 billion due next month.

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.

While demand has remained high, supplies are strapped. No new plants have been built in the state in recent years, and imports are tight because other states are fighting over the power.

In addition, spiraling prices for natural gas are forcing power plants to raise their prices. Most power plants are fired by natural gas.