U.S. Official: Repeat of Power Crisis Is Possible

The head of the Federal Energy Regulatory Commission said Wednesday that he was concerned about California’s electricity market and warned of a possible repeat of the state’s 2000-2001 energy shortage.

“There are some very troublesome conditions out there,” FERC Chairman Pat Wood told reporters after a meeting of FERC commissioners. “We’re clearly monitoring that.”

Wood said he was getting two updates a day on California’s power situation. He pointed to low hydropower supplies on the West Coast and above-normal temperatures as factors threatening the state’s wholesale electricity supply.

“It looks like the days of yore,” Wood said, referring to California’s power shortage of 2000-2001 that resulted in blackouts and the bankruptcy of the state’s biggest utility.

California’s grid has already had several close calls this year, mostly because of soaring temperatures in Southern California that have sparked heavy air conditioning use. On Monday, a heat wave forced the California Independent System Operator, which operates the state’s power grid, to declare a transmission emergency.

A spokesman for Cal-ISO wasn’t available Wednesday to respond to Wood’s comments.

Cal-ISO has expressed concern that an early snow melt in the Sierra Nevada mountains could crimp supplies of hydroelectricity, which provide about 20% of California’s power.

Also Wednesday, FERC approved a settlement with Modesto Irrigation District, a California public utility serving 95,000 customers, after investigators found no evidence the utility tried to manipulate power prices during the state’s energy crisis. The commission had in June ordered Modesto to prove it didn’t try to manipulate the market through a partnership with Enron Corp.

The utility has said its decision to pay $60,000 was made to avoid the cost of continuing the case.