Federal Judge Keeps Calif. Lights On
S A C R A M E N T O, Calif., Feb. 8, 2001 -- Power-starved California enjoyed yet
another reprieve after a federal judge ordered one of the state's
biggest suppliers to keep the electricity flowing — at least for
another day.
U.S. District Judge Frank C. Damrell Jr. said Wednesday histemporary restraining order would remain in effect until he ruleson whether Reliant Energy Services Inc. must continue supplyingpower to California utilities. A decision was expected this afternoon.
The Houston-based company is responsible for about 9 percent ofCalifornia's energy. The state's power managers say stopping theflow could cause a domino effect resulting in even worse blackoutsthan those that darkened parts of California two days last month.
"Not only could it result in rolling blackouts, but completelyuncontrolled blackouts," said Norma Formanek, an attorney for theCalifornia Independent System Operator, which controls most of thestate's power grid.
Reliant officials fear they might never be paid for the powerthey're supplying and accuse the ISO of overstating the potentialimpact.
"The ISO has grossly, grossly exaggerated the nature of theproblem," said Reliant attorney Terry Houlihan.
A Plan for Self-Reliance
Reliant wants the state to stand behind the power purchases,noting that California's two biggest utilities, Southern CaliforniaEdison and Pacific Gas & Electric Co., have said they are $12.7billion in debt and near bankrupt.
Gov. Gray Davis is unwilling to do that because he believesReliant wants to drive up prices by locking the state into purchases on the costly spot power market, Davis spokesman Steve Maviglio said.
As the judge took the arguments under consideration, stateofficials continued to seek a permanent solution to the crisis thatis costing California tens of millions of dollars a day.
The crisis has been blamed on a variety of factors, includinglimited hydroelectric supplies, transmission line troubles andaging power plants taken out of service for maintenance andrepairs. The state has been under a Stage 3 alert — signaling powerreserves at 1.5 percent or less — for a record 24 consecutive days.
Davis was expected to unveil a plan today for expeditingconstruction of new power plants. Officials also were movingforward on the transmission-line problem, announcing that the ISOhad approved a multimillion-dollar plan to ease an energybottleneck blamed in part for last month's rolling blackouts inNorthern California.
The major conduits that move power between the northern andsouthern ends of the state narrow to just two 500,000-volt linesalong an 80-mile section of Northern California.
PG&E has put off expanding that section for years, saying thesystem's importance would fade as new power plants opened inNorthern California. Last week, it told the ISO it would expand theroute, and the ISO's director of grid planning agreed Wednesday toa proposal to spend as much as $300 million over five yearscompleting the expansion.
Looking for Long-Term Solutions
Davis and other lawmakers, meanwhile, continued to struggle tofind a solution to the $40 million to $50 million the state hasbeen forced to spend daily since January to buy power on theexpensive spot market while its biggest utilities are out of cash.
The administration is negotiating long-term power contracts thatwould have California spend an estimated $10 billion to providereliable, affordable power to nearly 9 million customers of Edisonand PG&E.
San Jose-based Calpine Corp. has reached a 10-year contract withthe state worth about $4.6 billion. The contract starts in Octoberand will provide a constant block of power, starting with 200megawatts and rising by January 2004 to 1,000 megawatts — enough topower 1 million homes.
Lawmakers also are working on a proposal to acquire PG&E's andEdison's transmission lines.
Edison CEO John Bryson said Wednesday the utility would bewilling to consider such a proposal but would expect to be paid"fair value" for the lines, which was estimated at about $3 billion.