Cold Snap Adds to Calif. Power Woes

Wednesday, January 17th 2001, 12:00 am

By: News On 6

SACRAMENTO, Calif. (AP) â€” California orange growers dug in for a cold snap and hoped the state's strapped electricity supply would hold out to keep their delicate crops from freezing.

With a frost warning Wednesday in the Central Valley and cooler temperatures expected in coming days, growers anxiously watched the mercury â€” and the power grid. They rely on electricity to power fans and water pumps that work together to warm groves when it freezes.

``We're terribly exposed,'' said Joel Nelsen, president of California Citrus Mutual, a trade association of 800 growers. ``The loss of power for a short time could wreak untold damage on our crop.''

The Independent System Operator ordered a daylong Stage 3 power alert Tuesday, meaning reserves were close to 1.5 percent, and was braced to order scattered outages. It was the second such alert in a week.

The state avoided rolling blackouts 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.

In the Capitol, the Assembly approved a plan in which the state would buy electricity from wholesalers and sell it to utilities at low rates â€” about one-fifth the going market rate. The measure now moves to the Senate.

The cold spell facing citrus growers wasn't the only bad news California power watchers got Tuesday.

Southern California Edison, which serves 11 million people, said it cannot pay $596 million in bills for wholesale energy and debt service, including $215 million to the California Power Exchange.

The Power Exchange was considering whether to make the utility buy its power elsewhere and an electricity supplier threatened to force SoCal Edison into bankruptcy if it failed to pay its bills.

The default prompted Standard & Poor's to downgrade the credit ratings of SoCal Edison and Pacific Gas and Electric Co. to junk-bond status.

With just $500 million in cash left as of Jan. 10, PG&E faces due dates on bills totaling $1 billion during the first two weeks of February.

Between them, PG&E and SoCal Edison have lost at least $10 billion in wholesale energy costs. A rate freeze imposed as the state phases in deregulation has blocked them from passing on higher wholesale costs to their customers.

Wholesale power prices have risen dramatically since June, in part of 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, and sometimes far higher.

Demand has remained high, supplies are strapped because no new power 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.

Orange grower Gary Caviglia planned to awake periodically during the cold night to monitor the temperature and see if he had to fire up his wind machines to warm the crop.

``Give us a week of cold weather and we'd all be screaming,'' Caviglia said. ``Right now we're just holding our breath that we'll have a warmer winter and can avoid the rolling blackouts.''

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Eds: Brian Melley in Fresno contributed to this story.

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On the Net:

California Independent System Operator: http://www.caiso.com

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