Blackouts Stem From Broad Mix of Reasons

Where are the megawatts?

The answers are financial, mechanical, political and natural.

As blackouts have hopscotched across Northern and Central California the past two days, plants with enough capacity to supply 11 million homes sat idle or broken, double the usual amount for this time of year.

Some sellers avoided the state for fear of getting stiffed by California’s biggest power buyers, two utilities on the verge of bankruptcy.

Some small plant owners, not having been paid for three months by Southern California Edison, shut down.

Nature hasn’t helped. Storms haven’t filled the Pacific Northwest reservoirs that spin turbines. That region--source of more than 10% of the state’s power--is looking to buy electricity, not sell.

“We have to meet the needs of our customers first,” said Steve Becker, a spokesman for Avista Corp. in Spokane.

The factors that pushed California to the brink of blackouts for the last several months strengthened and converged this week--most potently the financial free-fall of Edison and Pacific Gas & Electric.

“The general concern of all market participants has been, one, will I get paid at all for providing energy? And two, what will I get paid?” said Kellan Fluckiger, chief operating officer of the California Independent System Operator, the agency that regulates power flow on the grid serving three-quarters of California.

Mark Palmer, a spokesman for Enron Corp., the world’s largest energy trading company, said the utilities’ financial troubles have clearly cut sales to California.

Enron limits sales to parties that are not credit-worthy and “we have not treated the California utilities or the Cal-ISO any differently than we treat any other entity,” Palmer said.

With a capacity to generate 55,000 megawatts of electricity, California theoretically should have had no trouble meeting its peak demand Thursday of 31,000 megawatts. But 11,500 megawatts were not available because of power plant shutdowns, more than half of that due to reported emergency repairs.

Such a widespread rash of unscheduled power plant maintenance raises the hackles of politicians, who suspect that power sellers withhold supply to boost prices in California’s market. Generators roundly deny those charges, saying the state’s growing shortfall of electricity creates scarcity that drives up prices.

Now that those soaring wholesale prices have bled PG&E; and Edison, which under the state’s deregulation law have been unable to pass their debts on to consumers, some power sellers are avoiding California, fearing they won’t get paid.

The volume of electricity traded in California’s marketplace, called the Power Exchange, is about one-seventh of the volume traded a year ago.

Cal-ISO officials said they cannot quantify the extent to which the utility debts repel power sellers. “It’s very difficult for us to look at every megawatt that’s not being supplied to us and know why,” said Cal-ISO spokeswoman Stephanie McCorkle.

Owners of California’s power plants said they do worry about getting paid. But they said they have shut down plants for mechanical--not financial--reasons.

One company, Southern Energy, had enough power plants down for emergency repairs Thursday to single-handedly account for the supply gap that forced blackouts.

The lost capacity was due primarily to problems in boiler tubes, which can scorch workers with steam when they burst.

“If we’re capable of running it without endangering the lives of our employees, we’re running it,” said Chuck Griffin, a spokesman for the Atlanta-based company.

The financial crisis of California utilities has begun to rock a large, but largely ignored, sector of the state’s power industry in a way that promises to bring on more blackouts.

Hundreds of small “cogeneration” plants, which use factory steam and other industrial byproducts to produce electricity, have not been paid by Edison since November. The utility has been forced under a federal law designed to encourage cleaner energy production to buy power from those plants under long-term contracts.

On Tuesday, Edison defaulted on payment of more than $500 million to those small generators, which include wind and solar farms and account for 20% of the state’s electricity supplies.

PG&E; has warned of similar action, said Jerry Bloom, a Los Angeles attorney representing the California Cogeneration Council.

Those warnings have led some suppliers to demand cash upfront from the cogeneration plants. As a result, Bloom said, some have shut down.

Cal-ISO officials said they have noticed the difference. In all, cogeneration plants supply enough power to serve 6 million homes in California.

“They are the heart of the good generation we have,” said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies. “It’s vital that they be kept on line or we’re going to have even worse reliability problems than we’ve seen.”