Calif Lawmakers OK Emergency Action

Friday, January 19th 2001, 12:00 am

By: News On 6

SACRAMENTO, Calif. (AP) â€” California lawmakers scrambled to approve a $400 million rescue plan in a desperate bid to keep power flowing as the state's energy crisis begins reverberating through the economy, threatening everything from milk supplies to gasoline deliveries.

The bill, passed Thursday night, allows the state to buy power on the open market and provide it to cash-strapped utilities at little cost. Gov. Gray Davis was expected to sign the measure Friday.

The action followed a second straight day of rolling blackouts that stretched from the Bakersfield area of central California to Oregon, 500 miles away. Power was turned off for about two hours to more than 675,000 California homes and businesses Thursday.

``I have a brand new baby. I'm worried about lights and heat,'' said Roland Plukas, 33, of Santa Monica. ``I bought a flashlight yesterday, and I'm buying a bigger one today.''

The power problems shut down the state's main gasoline pipeline and forced farmers to dump milk because the dairy plants were operating on reduced hours.

Hospitals and airports were exempt from the outages. Utilities refused to disclose which areas were blacked out, but the effects were obvious: Traffic lights went out for a second day across the San Francisco Bay area. Computer screens went dark, heaters and bank machines were silent and lights went out in classrooms.

The measure approved by the Legislature is only expected to tide the state's energy-starved utilities over until a more permanent solution is found.

``It is in fact the best of a range of absolutely terrible options facing this body,'' Assemblywoman Sarah Reyes said before voting in favor of the bill. ``This is a Band-Aid we're going to put on a bleeding body.''

But with the energy crisis triggering rolling blackouts Wednesday and Thursday, legislators said they had little choice.

``We're troubled by what goes on in our state and we can only see it getting worse,'' Senate leader John Burton said.

The Independent System Operator, keeper of the state power grid, said the latest blackouts were caused by a loss of thousands of megawatts from the Northwest, where hydroelectric dams are low on water. One megawatt is enough to power 1,000 homes.

Southern California escaped the blackouts. That was in part because of quirks in the state's distribution system that causes power bottlenecks in the north, making it harder to deliver electricity there than to members of the power grid located in the south. Los Angeles has a separate system.

Kinder Morgan Energy couldn't pipe gasoline from major California refineries to terminals around the state for 12 hours Thursday, said spokesman Larry Pierce.

The company is one of hundreds that have agreements with the utilities that give them lower rates in return for allowing the power company to turn off the electricity during shortages.

The volatile situation soon could lead to long gas lines and higher prices at the pump, said Bill Greehey, chief executive officer of Valero Energy, which operates a Benicia refinery that produces about 10 percent of the state's gasoline supply.

``California is getting to the point where they are going to have a crisis that is a helluva lot bigger than the one it already has on its hands,'' Greehey said.

The exact number of people affected by the outages were difficult to determine. The ISO said the amount of megawatts taken out were enough to serve 1.5 million homes and businesses.

The power outage in Sun City Lincoln Hills, a retirement community near Sacramento, prompted Jim Datzman, 62, and his wife, Sandy, 59, to take their grandsons to a playground. The 2-year-old twins, Corbin and Quinn, were watching Barney on television when the power went out.

``We saw a lot of our neighbors lifting our garages up manually, which of course isn't too good for seniors,'' Datzman said.

With no end to the crisis in sight, Californians began stocking up on flashlights, candles and firewood. Stores were swamped with calls from businesses looking for generators.

``They're buying the same type of stuff as the Y2K scare,'' said Kerisha Jackson, a manager at a Lowe's home store in Torrance.

The crisis is blamed in part on the Northwest's limited supplies of hydroelectric power and California's deregulation of its electricity industry.

Under the plan, utilities were forced to sell their power plants and buy electricity on the open market, an approach that was supposed to lead to lower rates. But wholesale prices for electricity have soared and rate caps imposed under deregulation have prevented utilities from passing on those costs to customers.

Pacific Gas & Electric Co. and Southern California Edison estimate they have lost more than $11 billion. They have both defaulted on millions in dollars in bills and lender payments and have warned that they are sliding toward bankruptcy.

There was more trouble Thursday: SoCal Edison was suspended from the state's Power Exchange, a clearinghouse for buyers and sellers of electricity, after failing to pay $215 million in bills.

The utility must post collateral before it can return to the market, an exchange spokesman said. A utility spokesman refused to comment, and it was unclear where SoCal Edison would go for its power.

â€”â€”â€”

On the Net:

ISO: http://www.caiso.com

Emergency power-buying legislation: http://www.sen.ca.gov