Bush administration extends California power emergency order
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Power transmission lines in California
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WASHINGTON (CNN) -- U.S. Energy Secretary Spence Abraham on Tuesday extended a two-week emergency order that President Clinton had signed before leaving office requiring energy suppliers to provide natural gas and electricity to California's cash-strapped utilities.
California Gov. Gray Davis requested the extension of the order, which would have expired at midnight Tuesday. The extension will expire February 7.
In a statement released by the Energy Department, Abraham said Davis has agreed this will be the only extension California will need to cope with its energy crisis.
The original Clinton administration order was designed to keep energy flowing even though California's utilities face bankruptcy. The state's electricity deregulation capped the price utilities could charge consumers for electricity, while utilities must pay market rates, which have increased dramatically in recent months.
Not popular in Northwest
"Our action today is designed to give the governor, the California Legislature and other relevant parties the time to take necessary action," Abraham said. "I strongly urge the parties to act immediately."
Federal intervention has irritated lawmakers from the Northwest, who complain that if their power companies are required to sell energy to California, customers in Oregon and Washington, among other states, are in jeopardy of losing reliable supplies of energy.
Generally, the administration has taken a dim view of using federal power to help California out of the energy crisis. Abraham used the opportunity to plug Bush administration energy proposals.
"A real solution must address the need for the construction of more electric power generation in California, reform of the flawed state market rules, restoration of the financial health of California utilities and encouragement of greater conservation," Abraham said.
Blackout avoided, but crisis persists
California narrowly averted another rolling blackout on Tuesday by buying electricity from Canada as Davis and the Legislature scrambled to devise solutions to the energy crisis, but the state was under a Stage Three power alert for the eighth straight day.
Under that alert, if the amount of reserve electricity falls below the 1.5 percent reserve, the ISO can order utilities to begin rolling blackouts.
Stephanie McCorkle, spokeswoman for the California Independent System Operator, the agency that maintains the state's power grid, said the purchase would probably allow the state to avert rolling blackouts Tuesday.
Lower temperatures increase demand
Earlier, the ISO had warned that blackouts might be needed and the utility in Sacramento had warned suburbs of that city they might be affected.
The ISO said several factors had combined to make the power shortage in Northern California worse Tuesday -- a drop in hydro power; some interruptible power contacts expired, meaning those customers' service could no longer be interrupted; and lower temperatures had increased demand.
Pacific Gas and Electric lost some interruptible contracts that allowed it to save 300 megawatts of power, enough to light 300,000 homes.
Industrial customers had signed the interruptible contracts in exchange for lower rates. That gave PG&E the right to pull the plugs on their plants up to a contracted number of hours.
PG&E said it has now exhausted contracts that allowed it to save the 300 megawatts of power and had to put those customers back on line.
In addition, the California ISO said reservoirs at a hydroelectric plant were low and that offers to sell power to California were, for a time, lower than expected, cutting capacity by another 1,000 megawatts.
California ISO officials urged customers to minimize power use during peak hours of 5 a.m. to 11 a.m. and again from 4 p.m. to 9 p.m.
Utilities may donate hydro plants
Meanwhile, the state Legislature considered several potential solutions to the crisis, including one under which PG&E and Southern California Edison would donate their hydroelectric plants to the state.
In exchange, the state would begin buying additional power needed for the state through long-term contracts and on the spot market, both of which have led to enormous debts for the utilities. The plan would make the state one of the largest owners of hydroelectric power in the nation.
Another plan, proposed by Assemblyman Fred Keeley, would put the state in the electricity business for up to five years, buying power at low rates and selling it directly to consumers. The Assembly has already approved it. It still needs approval in the state Senate and would have to be signed by the governor.
Keeley said his plan would buy time for the state's two largest utilities to restore their credit while lawmakers worked on long-term solutions to the state's botched deregulation laws.
Gov. Gray Davis is reviewing the ideas, but considers the hydroelectric plan more attractive, spokesman Steve Maviglio said.
CNN White House Correspondent Major Garrett and The Associated Press contributed to this report.
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