The power shortage crisis of last summer is in the back of most consumers minds; however, stage alerts are expected and officials urge customers to continue to conserve.
By Michelle Logsdon/Special to The Malibu Times
Up until July 9, the words “power conservation” had not crossed many lips throughout Southern California this year. Then the state announced its first Stage 1 power alert, reminding us we aren’t out of the woods yet.
“I would expect more Stage 1 and Stage 2 alerts this summer,” said Mark Olson, Westside regional public affairs manager for Southern California Edison. “Last summer the power crisis was all over the news and this summer it’s not such a big story, so conservation is not as good.”
The state has three alert levels to notify residents of a power emergency. A Stage 1 alert warns residents to conserve energy because the power supply is getting low. Stage 2 is also a warning, but voluntary blackouts occur at some large companies and residential areas. Malibu is not affected by those blackouts. At Stage 3, rolling blackouts occur wherever power usage is highest.
Malibu bypassed the blackouts of last summer, according to Hap Holmwood, emergency preparedness coordinator for the City of Malibu, because the city is long and slender; therefore, power usage is not as concentrated. “It’s not favoritism, it’s just that blackouts occur where the most power is being used.”
“I don’t anticipate much need this summer for Stage 3,” Olson said.
In January 2001, the state was forced to call a statewide Stage 3 alert every business day for almost six weeks. Numerous Stage 2s followed throughout the spring and summer months.
The catalyst for the power quagmire was the deregulation of California’s electricity market in 1996. The legislation relied on the “invisible hand” of economics to lower the bills of consumers.
At the same time, the state’s investor-owned utilities, Edison International and Pacific Gas and Electric Co. (PG&E), sold the majority of their power generating plants and began purchasing power at market prices from neighboring states.
When those prices skyrocketed from an average of $30 per megawatt hour to $330, officials became suspicious that some other invisible force contributed to the 266 percent jump. With some wholesale suppliers enjoying profits of roughly 500 percent, state and federal investigators began to investigate the possibility of market manipulation. Suspicions were confirmed recently during Enron court battles. Internal documents from Enron and testimony from other energy companies supported market abuse.
That might be some consolation to PG&E and Edison now, but at the height of the crisis the companies faced financial ruin when retail customer electricity rates were frozen. The utilities had to pay as much as 30 cents per kilowatt but could only charge 6 cents.
PG&E fell into bankruptcy and Edison reached a lawsuit settlement with the California Public Utilities Commission to recover a portion of their procurement costs by raising rates temporarily.
Olson said Edison would have recouped their costs allowed under the settlement by early 2004. He then expects its retail rates to drop approximately 20 percent, depending on energy costs.
Until then, consumers can save money on their electricity bill and help the state survive the power crisis by conserving. Gov. Davis reinstated the 20/20 program this summer, offering residents a 20 percent discount on their bill if they use 20 percent less power than two summers ago. The state is also making rebate money available through Edison to those customers who take energy conservation steps such as purchasing energy efficient appliances or installing solar panels.
The best ways for individual residents to conserve energy on a daily basis is to give the air conditioner a break once in a while and to run major appliances in off-peak hours (7 p.m. to noon).
“I don’t think it’s as serious as last year,” Holmwood said. “But it’s good for the media to do this kind of public service and remind residents to conserve.”