California avoids second wave of blackouts

Emergency workers try to open an elevator after the power was switched off during rolling blackouts     WEB EXCLUSIVE Greg LaMotte: How California is coping with its ongoing power crunch   WEB EXCLUSIVE Greg Lefevre: California power suppliers driven 'over the edge'

Conservation, additional generators could stave off outages

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SACRAMENTO, California (CNN) -- California suffered its second straight day of rolling blackouts on Thursday when power was cut to about 600,000 customers in the central and northern parts of the state.

But "serious conservation" and two generators returning to service prevented a second threatened blackout later in the day, said the head of the state's power authority.

California Independent System Operator CEO Kellan Fluckiger had earlier predicted customers would face further rotating outages when demand hit its peak between 4 p.m. and 8 p.m., but said at an afternoon news conference that the situation had improved slightly.

"Conservation can really make a huge difference and I hope we'll continue to see that through the peak today," he said. "If nothing else changes or breaks, we may actually get through the evening peak today without additional firm load interruptions."

Fluckiger said that two generators in the state had returned to service Thursday, adding about 600 megawatts of power to the state's reserve.

Power officials said they thought blackouts might be avoided on Friday when demands will be reduced.

Thursday's blackouts affected regions from central California north to the Oregon border. It was the second straight day that the state's power authority ordered rolling blackouts because the state was beyond its electrical capacity.

The power outages lasted for about three hours. Four of the 14 power blocks in the north and central parts of the state were effected.

"We did this because quite frankly in northern California we are just running out of supply," said ISO spokesman Patrick Dorinson. "Clearly we're still in this supply crunch, and we're not seeing much relief."

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Thursday afternoon the ISO said that it did not have enough power for the afternoon cruch between 4 p.m. and 8 p.m. and anticipated more blackouts then.

The rolling blackouts stretched from the Bakersfield area to Oregon, 500 miles away. Traffic lights went out by 10 a.m. in parts of San Francisco, causing gridlock in some areas, and Sacramento also was affected.

"The ISO does not determine who is out of power," said Chief Operating Officer Kellan Fluckiger. "The ISO only communicates the number of megawatts, or the size of the reduction needed to keep the electrical system intact."

One megawatt is enough to power 1,000 homes.

Dorinson called it "an hour-to-hour dynamic situation."

The blackouts, which came two hours earlier than those on Wednesday and affected twice as many people, were prompted by the loss of about 1,000 megawatts from Oregon's Bonneville Power Administration.

Rolling blackouts involve switching off power in entire neighborhoods for a limited time to relieve the strain on the system.

A Stage 3 electrical emergency remains in effect, meaning power reserves are critically low -- about 1.5 percent, or less. Anticipating blackouts, Californians stocked up on flashlights, generators and firewood.

Thursday's developments came as California prepares to spend millions of dollars in a stopgap bid to keep electricity flowing and prevent money-strapped utilities from going broke.

In Washington, President-elect George W. Bush told CNN that solving California's power shortage might require the loosening of environmental regulations.

"If there's any environmental regulations that's preventing California from having a 100 percent max output at their plants, as I understand there may be, then we need to relax those regulations," Bush said.

"The situation in California underlies what I was saying in the course of the campaign," Bush said. "We have an energy problem."

He said energy conservation should be promoted, but the "best way to make sure we have energy independence is to encourage more exploration."

At a Senate confirmation hearing, Energy Secretary-designate Spencer Abraham said that Bush views California's power crisis as "an urgent priority" but that it's premature to speculate on actions the federal government might take.

The state of emergency declared by Gov. Gray Davis late Wednesday remained in effect Thursday.

On Wednesday, after up to half a million homes and businesses in Northern and Central California were abruptly unplugged for up to two hours at a time, Davis ordered the state to temporarily start buying power from wholesalers and provide it to power-short utilities.

"Block by block": California blackouts get under way, according to California ISO official Kellan Fluckiger

Wednesday's rolling blackouts began at 11:30 a.m. and lasted until 1:40 p.m.

During Wednesday's outages in San Francisco, Sacramento, Modesto and other cities, power was shut off temporarily. But many parts of the state were unaffected. Los Angeles, for example, generates its own power and is not part of the state's power grid.

Davis' emergency order allows the state Department of Water Resources to use funds in its current budget to buy power. Davis says the plan is 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 California Legislature to authorize a longer-term plan to buy power and provide it to the cash-strapped utilities. State lawmakers are expected to pass the bailout plan Thursday.

California state regulators on Thursday ordered rolling blackouts in the northern part of the state for a second straight day

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.

The two utilities have seen wholesale power prices skyrocket in the aftermath of a 1996 deregulation law that bars them from passing the costs on to consumers. That leaves them billions of dollars in debt and without the credit to keep buying power on the spot market.

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. The contracts would allow the state to buy power at about one-fifth the current market rate and resell it to utilities.

The power would be resold to consumers, through the utilities, at the state's cost, plus a modest administrative charge.

CNN San Francisco Bureau Chief Greg Lefevre, CNN Correspondent Greg Lamotte, The Associated Press and Reuters contributed to this report.

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