Power Outages Threatening U.S.

Wednesday, July 5th 2000, 12:00 am
By: News On 6

WASHINGTON (AP) — As this summer moves into its hottest months, federal officials and the power industry are keeping a watchful eye on the nation's electric grids and cautioning that a severe hot spell — combined with possible supply problems — could cause power outages in some parts of the country.

As the $220 billion electricity industry moves toward more competition, there are growing concerns that the power industry is running too close to the edge in providing electricity when it is most needed — during peak summer demand.

Spurred on by the growing economy and increased reliance on computers and other electrical devices, electricity demand has been increasing 2 percent to 3 percent a year, while production has lagged. Meanwhile the safety cushion has dropped to below 15 percent of generating capacity, far below the 25 percent of a decade ago.

Signs of problems have already shown up in some areas this summer.

For most of last week, California was under a ``stage II power watch'' in which customers were asked to keep down electricity use and power was withheld from some commercial users because of tight supplies as temperatures soared in the 100-degree range. Two weeks earlier, rolling blackouts moved through the San Francisco Bay area after some power generators failed during a record 103 degree heat wave.

Although milder temperatures have eased the strain on the state's electricity system, Patrick Dorinson, a spokesman for the California Independent System Operator, which manages the state's flow of electricity, says the problem isn't over.

``Everything is on a day to day basis,'' he said. ''... We expect another heat wave next week.''

The Energy Department and an industry-sponsored watchdog group — the North American Electric Reliability Council — says the Southwest, California and much of the Northeast, especially New York and New England — face the greatest electricity reliability concerns this summer.

In New England, a New Hampshire nuclear power plant went down for a few days last month, triggering an appeal throughout the region that users conserve electricity. The plant quickly resumed operation and cooler weather arrived, ending the threat.

Jim Sinclair, a spokesman for the agency that manages New England's electricity grid, said, ``There will be days this summer when we need to dip into the reserve tanks'' for electricity, but reserve supplies are expected to be adequate to avoid power outages.

Others are not as certain either in New England or elsewhere.

The power problems that already surfaced in New England and California ``could be an ominous sign,'' said Energy Secretary Bill Richardson, who has held a series of regional meetings on electric reliability issues. In those meetings, he said, ``the view was unanimous'' that the electricity system is operating on the edge and if problems are not addressed, ``we'll all end up sitting in the dark.''

Next week, the House Commerce Committee is expected to consider legislation aimed at dealing with reliability concerns. The Senate last week passed a bill that would create a new self-regulating industry organization charged with monitoring and assuring the reliability of the power grids. The Federal Energy Regulatory Agency would oversee this ``self regulation.''

``The existing scheme of voluntary compliance with voluntary industry reliability rules is simply no longer adequate,'' said Sen. Frank Murkowski, R-Alaska, chairman of the Energy and Natural Resources Committee.

But Richardson wants a broader bill — as do some key House Republicans — that would address other aspects of electricity deregulation. Without moving forward on the restructuring of the electricity industry, many reliability problems cannot be fixed, he contends.

Electricity industry experts maintain that power outages will remain a part of every summer as long as demand continues to grow faster than new power plants and transmission lines can keep up.

``We're running a 1930s distribution system (that) ... needs to be upgraded,'' Roger Gale, president of industry consulting firm PHB Hagler Bailly, recently told a congressional panel.

Meanwhile almost half of the states have moved toward adopting — or are planning to adopt — a more competitive electricity market, putting additional strains on the system, many industry experts believe.

``A lot of electricity is being bought and sold. ... The system is stressed,'' says Bill Brier, vice president for communications at the Edison Electric Institute, the trade group for investor-owned utilities.

New power plants, mostly small, natural gas-fired units, have been built since last summer in the Southeast, Midwest and Texas, easing supply concerns for this summer. But few plants have been built in the West and Southwest. In New England, most of the new generation is still in the planning stage.

``Companies have been very gun-shy to make investments (in new plants and power lines) because the rules aren't clear,'' says Brier. While 24 states have taken some action on deregulating the power industry, Congress has been embroiled in disputes over how much say the federal government should have in moving toward a more competition.