It has begun. Welcome to the 3rd world. http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/01/17/stat... Blackouts hit California as utility financial woes deepen Associated Press, SF Gate Wednesday, January 17, 2001 Breaking News Sections ------------------------------------------------------------------------ California regulators ordered rolling blackouts Wednesday for the first time in the state's months-long electricity crisis, blaming utility credit problems and a tight national power supply for the scattered outages. The rotating blackouts, expected to affect about 500,000 customers for an hour to 90 minutes, were restricted to Pacific Gas and Electric Co. territory in northern and part of central California, said Stephanie McCorkle, a spokeswoman for the Independent System operator, keeper of the state's power grid. A PG&E spokesman said that about 250,000 people were already without power from the blackouts that began at 11:41 a.m. There are reports of outages in San Francisco's Lower Haight, Oakland's Rockridge area, the Oakland Hills, Orinda, the Peninsula from South San Francisco to San Mateo, parts of Napa and Sonoma County, downtown San Jose, Cupertino's De Anza College, San Ramon, Santa Cruz, Benicia and other areas, according to radio and TV reports. There was a report of two students being trapped in an elevator at Hastings School of Law in San Francisco. Some ATMs were reported out of service in downtown San Francisco. Power was cut to the Cow Palace in Daly City, which is holding a boat show, according to an administrative worker at the exhibition hall. The main building remains well-lit from emergency lighting and skylights, she said. KICU-TV, channel 36, was knocked off the air. The blackouts would first affect customers in scattered areas known as blocks 3 and 4. For security reasons, the precise locations are not released. Consumers can find their block numbers at the bottom of their power bills. PG&E and state officials urged conservation and said it was not known yet if blackouts would be ordered for blocks 5, 6 and 7. Blocks 1 and 2 had power outages last June. BART, fire departments, police stations and hospitals are not affected. Motorists who come to non-functioning traffic signals, including El Camino Real in the San Bruno/San Mateo area and Lawrence Expressway in San Jose, should treat them as four-way stops. Utilities try to avoid cutting power to blocks with essential services such as hospitals. Terry Winter, president of Cal-ISO, said that a large power plant on California's Central Coast went down at about 11 a.m., necessitating the outages. Worry that the state's two largest utilities were on the verge of bankruptcy led some suppliers to withhold power from California, despite an emergency federal order requiring them to sell excess electricity to the state, said Jim Detmers, the ISO's managing director of operations. But Winter said later that he did not believe generators were withholding power. Instead, he said, the main problem is broken power generating facilities, many of them older plants that have been run heavily since June. Compounding the problem is a general scarcity of electricity nationally, and a lack of snow and rain in the hydroelectric-dependent Pacific Northwest, Detmers said. ``If you are out in the community and get into an intersection that is in the blackout, use caution,'' he said. The day began with the third Stage 3 power alert within a week, meaning reserves were close to just 1.5 percent. The warning marked at least the third time California neared blackouts since its power woes began last summer. The ISO fended off outages before by temporarily turning off huge state pumps that move water from Northern California to the south, sucking enough power for 600,000 homes, but that wasn't enough Thursday. Suppliers were ``reluctant to provide power to California because of the financial situation of the utilities,'' Detmers said. He said the ISO wasn't probing whether suppliers were flat-out ignoring Energy Secretary Bill Richardson's emergency order insisting that any spare power go to California, however. ``We're just trying to get the power delivered,'' he said. Adding to the problems, several power plants that were expected to return to full operation after repairs did not, Detmers said. On Tuesday, Southern California Edison declared itself unable to pay hundreds of millions in wholesale electricity bills, and it and PG&E, the state's largest utilities, took another hit on Wall Street. SoCal 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 and Moody's to downgrade the credit ratings of SoCal Edison and PG&E to junk-bond status. The credit agency said SoCal Edison's delinquency also tainted PG&E. 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. On Tuesday, unusually high demand for natural gas, due in part to cold weather, led San Diego Gas and Electric to cut supplies to two power plants, contributing to the state's Stage 3 alert. The utility said there was plenty of natural gas, but not enough space in the pipeline to meet its customers' needs. To maintain the supply for its home and small-business users, the utility cut the flow to the two power plants and six large industrial customers. 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. Joel Nelsen, president of California Citrus Mutual, spent Tuesday on the phone with Central Valley lawmakers and the governor's office trying to ensure that orange growers wouldn't face outages as they tried to protect crops from a cold snap. ``We're terribly exposed,'' said Nelsen, who heads a trade association of 800 growers. ``The loss of power for a short time could wreak untold damage on our crop.''