By Jennifer Coleman
The Associated Press
December 8, 2000
SACRAMENTO, Calif. -- Hoping to ease the state's electricity crisis,
air-quality regulators allowed the restart of several power plants in
Southern California that had been shut down because they had reached air
On Friday, federal energy regulators lifted price caps on wholesale
California electricity following an emergency request from the managers of
the strapped power grid.
The operators said lifting the caps would give California greater
access to electricity supplies at a time when the power grid is stressed to
Gov. Gray Davis suggested the decision would spark new rounds of price
increases and demanded a congressional investigation. The ruling was "an outrageous
assault on the consumers and businesses
of California by a federal agency answerable to no one," Davis said.
The Folsom-based California Independent System Operator, which manages
the state's power grid, said lifting the price caps was justified because
it has "become increasingly difficult to manage these (power) negotiations
while at the same time balancing supply and demand."
The moves came a day after California encountered an unprecedented
power crunch, with electricity supplies for the state's 34 million people
so perilously low that California only narrowly avoided blackouts.
The power crunch has been blamed on cold weather in the Northwest, the
shutdown of some generating plants for repairs or other reasons, and the
effects of utility deregulation in California.
On Thursday, during the emergency, power plants capable of producing
2,400 megawatts were off-line because they had exceeded their pollution
limits. One megawatt is sufficient to power about 1,000 homes.
On Friday, the South Coast Air Quality Management District agreed to
let some of those polluting power plants return to operation and restore
about half of that lost generating capacity. However, those plants will
have to pay daily fines.
"This is an attempt to balance the obvious and immediate need for
power generation with protecting the environment and public health here in
the South Coast Basin," said district spokesman Sam Atwood.
Restarting the over-polluting plants should provide a cushion for the
state, said Stephanie McCorkle, a spokeswoman for the ISO.
In addition, hundreds of companies voluntarily cut consumption Friday
to avoid imposed outages.
"We're still encouraging conservation efforts," said Lori O'Donley,
spokeswoman for the ISO. "We're optimistic that we won't have to" impose
shutdowns on commercial customers.
Federal energy regulators are working with the state to find power
that can be diverted to California during the crunch, moves that could
include increasing hydroelectric generation out of state.
The power grid's managers were able to avoid blackouts Thursday by
shutting down the enormous state and federal pumps that push water from
Northern California to central and southern regions.
The phased-in deregulation of California's $20 billion electrical
power industry was supposed to lower prices by creating greater
competition. But demand for electricity has outstripped supply, in part
because of a growing population and a booming high-tech economy.
Electricity is also in short supply because energy companies held off
building new power plants while deregulation was in the planning stages. In
addition, deregulation has forced utilities to sell off their
power-generating assets, such as dams and plants, and import electricity
from neighboring states, where power demand is high right now because of a