Calif. Faces 2nd Day of Blackouts

Thursday, January 18th 2001, 12:00 am

By: News On 6

SACRAMENTO, Calif. (AP) â€” Californians faced a second day of rolling blackouts Thursday as the state readied to spend millions to keep electricity flowing and prevent money-strapped utilities from going broke.

Hours after people across northern and central California saw everything from their lights to their heaters, elevators and bank machines abruptly switched off, Gov. Gray Davis ordered the state to temporarily start buying power from wholesalers and provide it to power-short utilities.

``I'm declaring a state of emergency in California,'' the governor said during a late-night news conference Wednesday.

Energy officials said that Thursday could be even more difficult. Just a minute after midnight, the ISO issued a Stage 3 alert, with power reserves approaching or falling below 1.5 percent.

``The threat of rolling blackouts has never been greater. In truth it's doubtful that the megawatts will be there (Thursday),'' said Stephanie McCorkle, spokeswoman for the Independent System Operator, keeper of the state power grid.

An unstable market, the Pacific Northwest's own limited supplies of hydroelectric power and other woes meant the state was likely to be searching the open market for as much as 55 percent of its power during peak use periods Thursday.

During Wednesday's outages in San Francisco, Sacramento, Modesto and others cities, power was shut off to as many as a half-million customers at a time.

Davis' emergency order will allow the state Department of Water Resources to use funds in its current budget to buy power. Davis said the plan was necessary to fend off further blackouts and prevent utilities' bankruptcy, which would otherwise be imminent.

``The whole purpose of this is a bridge to a long-term solution,'' Davis said.

The governor made no mention of making utilities pay for the power, which could cost taxpayers tens of millions of dollars over the next few days.

Davis called on the Legislature to authorize a longer-term plan to buy power and provide it to the cash-strapped utilities. If such legislation isn't adopted, the governor said, several power suppliers have threatened to call in their debts on California's two largest utilities, Southern California Edison and Pacific Gas and Electric Co., which could force them into bankruptcy.

State regulators came Wednesday within 1,300 megawatts â€” enough electricity to power 1.3 million homes â€” of ordering the first statewide blackouts since World War II.

Automated teller machines along several blocks of downtown San Francisco shut down and at least two students were trapped in an elevator that stopped between floors at the city's Hastings School of Law. The students eventually used a ladder to climb out.

Power was kept on at such essential facilities as hospitals and airports.

Some people blamed the utilities, accusing them of cutting power as a ploy to raise rates.

``This is happening because the utilities mismanaged their finances. The state ought to just take them over. The bottom line is that this is all about greed,'' said Kenneth Carrero of San Ramon who voluntarily turned off his computer to conserve energy.

Others blamed the wholesalers who sell power to the utilities. Among them was the city of San Francisco, which was preparing a lawsuit accusing wholesalers of manipulating supplies to keep prices high. The action could be filed as early as Thursday.

Wholesalers vehemently denied such allegations, as well as Davis' contention they were about to force Edison and PG&E into bankruptcy.

On Wednesday, PG&E skipped a scheduled $33 million payment to investors, the first time it defaulted on a bill. Edison defaulted on bills totaling $596 million on Tuesday.

Tom Williams of Duke Energy said suppliers were giving the utilities more time to pay.

``But we have bills to pay, too,'' he said. ``We're part of the solution, we're not driving anyone into bankruptcy.''

Under Davis' proposal, emergency legislation would be in effect for a week to 10 days or until lawmakers pass a measure allowing the state to enter into long-term contracts with wholesalers to buy power and resell it to utilities.

That legislation, approved earlier this week by the Assembly, would let the state sign long-term contracts with electricity wholesalers to buy power at about one-fifth the current market rate. The power would be resold to consumers, through the utilities, at the state's cost, plus a modest administrative charge.

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On the Net:

California Independent System Operator: www.caiso.com

California Citrus Mutual: http://www.cacitrusmutual.com