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Power Crisis: California ISO Holds News Conference on Rolling Blackouts

Aired January 18, 2001 - 1:34 p.m. ET


LOU WATERS, CNN ANCHOR: More now on our lead story. That's the state of emergency in California that's causing the power shortages from the northern part of the state to the central part of the state, starting rolling blackouts. We're now hearing from public utility officials, California ISO. Let's listen to what they have to say about all of this.


UNIDENTIFIED MALE: And we are only three people trying to answer questions from around the world. So if you could bear with us and use these calls as much as possible to get information. I know there's radio people who need live interviews. We'll certainly accommodate as best we can, but just be a little patient with us because we're a small staff.

With that, I'll turn it over to Kellan.

KELLAN FLUCKIGER, CEO, CALIFORNIA ISO: Good morning. As you are aware at this time, we are in the midst of rotating or rolling -- use those words interchangeably -- rotating or rolling blackouts at this time. That's a very unfortunate and difficult circumstance. We have requested at this time 1,000 megawatts. The request was made at 9:45, so they would have started within minutes of that time.

We are preparing at this time to go to the second block. Rotating outages means that a block of customers are out for a period of time, typically about an hour, and then that block changes to the next block of about the same size.

So at 10:45, approximately, the people that are out of power will come back on and a new block of about the same size will be out. And this is a sequential process so it doesn't all happen at once because the system can't really deal with the shock of 1,000 megawatts popping on and off like the flick of a switch. So it takes a few minutes and it's a process that is handled by the utilities. I'll describe that briefly for you so you can understand that and your listeners and viewers are able to understand how this works.

The investor-owned utilities have for many, many years had outage programs set up to deal with emergencies such as this or such as earthquakes or other system or equipment failures, load-shedding equipment, load-shedding buttons, if you were, handles or buttons that are pressed to drop large blocks of load have always been part of any utility operation to prepare for emergencies.

So what happens in these situations is we have conference calls at the last possible moment and we make decisions about how many megawatts need to be removed to maintain system integrity and to keep the system stable. Because if you don't take rotating outages when supplies go low, the actual entire electric system can become unstable and then you risk losing the whole thing. So the purpose of an outage is to take a planned or intentional outage to a small part of the grid in order to preserve the integrity of the other large portion of the grid. This pane is then rotated among blocks so as not to have any one particular area affected too long.

The ISO does not determine who is out of power. The ISO only communicates the number of megawatts or the size of the reduction needed to keep the electrical system intact.

At this time, these outages are concentrated in Northern California. And the reason for that is because of transmission limitations on Path 15, which you heard me talk about many, many times. We are at the point where Path 15 is at or over -- bouncing over and at its maximum flow limit. And so the outages that we are taking are concentrated in Northern California at this time.

Our peak load today we estimate to be about -- will be about -- and, again, that will be about somewhere between 5:30 and 6:00 tonight, probably about 30 -- 1,800, 32,000 megawatt range. It may be as low as 31,000.

Excuse me.

Today we're seeing loads run under yesterday by some 900 megawatts, or nearly 1,000 megawatts. We are attributing the majority of that to conservation. You've heard me stand up here and talk about -- and Jim Detmers (ph) and Terry (ph) and all of us who give you these briefings -- a number of time about the possibility of rotating outages. And I repeatedly get the question about "crying wolf." And we have actually, of course, yesterday and today, actually had to get to this unfortunate condition.

We estimate that -- excuse me -- if nothing changes, we estimate that the current rotating outages will continue till about 1:00. What happens between now and 1:00 is not at 1:00 we suddenly find more megawatts. As the day warms up, the morning peak happens at about 8:00, or between 8:00 and 9:00. After that, the load kind of tapers off gradually till about 4:00 in the afternoon. We estimate that by about 1:00, the load will have -- excuse me -- dropped sufficiently that we'll be able to restore, we hope, the block that we have now.

One of the wild cards this is when there's a lot of conservation going on and people are actually responding as we need to these situations, it's difficult to tell what the load will do because our load projections are based on many, many years of historic data, but it's all based on normal stuff going on. Every normal day, it does what it does.

When extraordinary events occur, lots of changes, different consumption patterns emerge, and so the load is a little bit difficult to predict, on a day like today, exactly what it will do. That's not a bad things, that just gives you some indications we have some elements of uncertainty because we don't have very many historical days with outages in them and significant conservation with, you know, over which to draw a good prediction.

I'll try to answer a number of the questions that I think will be in people's minds with this briefing before I open it to questions. There are ongoing negotiations at this time with potential suppliers in Canada for some possible megawatts. There are issues, significant issues, that remain about credit and money. That, right now, is the most significant impediment to that particular source, although I would absolutely not want to leave you with the impression that somehow, if there were lower prices or infinite money, that we would be out of our current situation.

I've said repeatedly, and will say until things change, that we are basically in a supply shortage situation in California and in the Western United States. That supply situation is clearly exacerbated by the recent months worth of high prices and the current pending financial solvency, liquidity problems of the investor on utilities. So that certainly plays a large role in that.

After 1:00 if, in fact, we're able to restore the load -- and there is a potential to restore it earlier than that if we're able, successfully, to negotiate with some Canadian -- potential Canadian suppliers and manage the money issues -- we will still be facing a peak this afternoon between 4:00 and 8:00. It typically occurs about 6:00, that -- where we see a rise in system demand of between 1,000 and 3,000 megawatts depending on -- literally depending on conservation efforts. On a typical day that rises about 3,000 megawatts. We've seen it less in recent days because of the success of conservation.

We would expect, at that time, to return to rotating outages between 4:00 and 8:00 to manage that peak unless something significant changes. So that is our best available prediction right now. That would mean that rotating outages could occur again begin between 4:00 and possibly 8:00 or 9:00 tonight until the load again backs off.

It's important to know that it climbs really sharply until about 6:00, levels off, but doesn't really start dropping significantly until after 10:00. So even though the peak occurs about 6:00, it flattens out -- kind of gradually drops off, which may mean that rotating outages could go as late as 9:00.

Interruptible customers -- that has been a number of questions recently, I'll talk a little bit about that. Interruptible customers have been off since shortly after 5:00 this morning; yesterday they were off for nearly 18 hours. I understand, and am very sensitive to the fact that this places a tremendous burden on industrial processes and the businesses that are so affected.

I'm sure that none of them intend, when they signed up for these rates, to be interrupted this number of hours and to have this burden placed on them. But they are off at this time, have been off since somewhere after 5:00 this morning and will likely remain off for the bulk of the day, absent some significant change.

We've had a couple of things happen on the system that I'd like to talk about. A little while ago, part of the DC line that goes to the Northwest blocked, or became unavailable; that has now returned to service. That affected a few hundred megawatts of flow -- about 600, but that has been restored. That did not affect the rotating outages, it was simply a swing that we absorbed in the system for a period of time, maybe something around half an hour, an hour, something like that.

I think that's a briefing, basically, on where the system is today. I do want to address outages; one of the questions I get regularly is the number of outages, the number of units out of service. Again, we are in a situation where we continue to have an extraordinarily high number of units unavailable. Right now we're about at 11,100; that's down from last week -- 15,000, but way above where I would like it. Where I would normally expect this to be, it would be, you know, in the 5,000 to 6,000 megawatt range.

We do have, as usual, somewhere between 3,000 and 4,000 megawatts out of service for their annual overhauls and so forth. We have between about 7,000 megawatts of forced outages. Now, forced outages -- again, I do this regularly -- but I want to repeat, forced outages come from a number of circumstances.

Lack of water created a forced outage. If I've got no water behind a reservoir, the unit might be available and mechanically able to run; but if the water's not there, it's effectively forced out of service. So 2,000, maybe 3,000 megawatts of the forced outages might be due to water limitations, lack of water in reservoirs.

You've heard me talk frequently about the Helms Plant, it's one of our major tools to mitigate path 15. That, basically, is out of water at this point; there the may be an hour's worth of water left there, but we have basically very little to no water in the upper reservoir. That has two reservoirs, we send it down and pump it back so you can use it over and over again. That's sufficient use, but we can't pump right now. The water in the upper reservoir is effectively exhausted. The last -- and we usually do that at night -- use it during the day, send it back at night so you can use it over and over again.

The last several nights we have not been able to pump back water. As you know, at 1:00 in the morning the other day we declared a stage three. We've been in stage three, basically, all day today. That means that we are accessing all available megawatts that are available to us during stage three. It also means that, in any hour we have the possibility of rotating outages, even early in the morning.

It may be difficult to understand why those threats exist at 1:00, 2:00, 3:00, 4:00 in the morning, when the loads are at their very lowest. Let me try to explain that to you: Base load units like nuclear and fossil generation that have a constant supply of fuel are available around the clock; it's not a problem.

Northern California has about 5,000 megawatts of hydro-resources. The Northwest of the United States, where we import significant power, is also largely hydro-based. Hydro-resources are energy-limited; that means they only can run, obviously, for the amount of water that they have. So that is shaped. If I shaped -- I mean, you pick the times to use it when it will be the most valuable to you. But that also means you can't run it around the clock.

So if I've got 6,000 megawatts of hydro, I may be only able to use 1,000 of that during the off-peak times.

WATERS: There's Kellan Fluckiger, he's the CEO of California ISO. Now, ISO stands for Independent Systems Operator, and it's an organization charged with managing the flow of electricity along the long-distance and high-voltage power lines that make up of the bulk of California's transmission system. And, as you heard him say again today, there are the rotating, or rolling blackouts, as they are called because of a supply shortage and he -- you get the essence of what the problem is.

Taking these rolling blackouts in a rotating basis for an hour or so along those areas where demand is excessively high and creating a drain on the rest of the system. But there are some problems associated with balancing that to keep the system from breaking down. There's load-shedding buttons, as you heard them called, that take one area off the grid and put them back on later, but in such a way so as not to create an instability for the system.

But you have heard that, because of the conservation efforts, that's creating an uncertain load on these grid systems across the state.

Greg Lefevre, we've heard that, mostly, this is concentrated in Northern California, but we understand that it's extending down as far south as central California.

But my question is: these interruptible customers that he was referring to -- he didn't really say who these people were -- they have been off-line since 5:00 a.m. Who are they, and why have they been off as much as 18 hours?

GREG LEFEVRE, CNN SAN FRANCISCO BUREAU CHIEF: These companies are small manufacturing firms, and sometimes some large manufacturing companies -- a company called Weber Metals here in San Francisco was on this phone call yesterday. They were taken off at 5:00 in the morning; that's usually when these interruptibles start -- just before the morning shift begins.

They were promised that they could come back on just before noon yesterday; well, at 11:00 yesterday morning they were on the call -- the state agency said, sorry guys, no juice, you're done for the day. So that company is down for production for the day, and they're really beginning to feel the heat.

There are other companies in southern California and some schools -- large universities have decided to go on this interruptible program -- that is, they'll take the rolling blackouts early if they get lower rates the rest of the time. But now some of these companies have been virtually out of business for as much as a week and they're really feeling the hurt.

Back to you, Lou.

WATERS: That's Greg Lefevre.

And, as you heard Mr. Fluckiger say, they're dealing with an energy supplier in Canada; negotiations are going on. There's a 4:00 p.m. peak demand time in California, which causes greater problems.

If the demand is too high, we'll continue to watch the situation. As soon as we know more, we'll pass it along to you. It's a very important story.



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