Date:       12/13/00 4:47 PM

4:47 pm edt

 Energy chief moves to avert California blackouts
 Eds: LEADS to UPDATE with U.S. energy secretary ordering power

generators to sell power to California.
 With BC-CA--Power Woes-Glance
 slasmt
 By STEVE LAWRENCE=
 Associated Press Writer=
   SACRAMENTO (AP) _ U.S. Energy Secretary Bill Richardson said
Wednesday he would force power generators to sell electricity to
California to prevent rolling blackouts.
   The announcement came as California power regulators warned of
the likelihood of a Stage Three power alert with rotating blackouts
Wednesday afternoon due to trouble buying electricity from the
Northwest.
   About a dozen suppliers were demanding cash before selling power
to California due to concerns about the utilities' solvency, said
Kellan Fluckiger, chief operating officer of the Independent System
Operator, keeper of the state's electrical grid.
   California's two largest utilities, Pacific Gas and Electric and
Southern California Edison, are near bankruptcy due to skyrocketing
wholesale power costs, Gov. Gray Davis and Sen. Dianne Feinstein,
D-Calif., said at a Washington, D.C., news conference with
Richardson.
   Richardson said he was using emergency powers to force
wholesalers to sell power to California at a price he deemed fair.
He said he would also request that two large Pacific Northwest
power generating associations generate more power to send to
California.
   Davis and Feinstein also asked federal regulators to set a
regional price cap on wholesale electricity to prevent the high
prices that have plagued California. On Friday, the Federal Energy
Regulatory Commission lifted price caps in California.
   Record wholesale power prices followed, and PG&E warned it was
in financial danger.
   ``The credit limits of utilities and what markets are willing to
sell us have been reached and surpassed in many cases,'' Fluckiger
said. ``There are questions about utility solvency. That has come
to a head today.''
   He said officials may have to interrupt power to about a million
customers Wednesday afternoon and then increase the blackouts to
cover three million or four million in late afternoon and early
evening, when people come home from work and power demand hits a
peak.
   Steve Hansen, a spokesman for Southern California Edison, whose
territory includes metropolitan Los Angeles but not the city, said
the utility had not ordered blackouts by early afternoon.
   ``We have heard that it may not be as bad as we thought here,''
he said. ``We're waiting for some kind of official word from the
ISO or somebody.''
   An unprecedented Stage Three emergency was issued last Thursday,
meaning reserves had fallen below 1 1/2 percent. In that case, the
state fended off the threat of rolling outages by turning off two
power-sucking water pumps on the Delta.
   ``California is heavily import-dependent and had been for 20
years. This is a West-wide problem,'' Fluckiger said.
   Blackouts, if used, would probably last about an hour to 90
minutes and occur mostly in Northern California due to transmission
limitations there, Fluckiger said.
   ``It's a fairly bleak picture,'' he said, adding that the
chances of blackouts were better than 50-50. ``This thing will not
change unless something is done to alleviate the credit
situation.''
   Contributing to the problem was a shortage of water to power
hydroelectric generators in the Northwest and California, Fluckiger
said.
   ``We have reservoirs so low that we have people standing by them
watching the situation to make sure it does not go below safe
limits,'' he said.
   Gas-fired generators could be brought on line to ease the
situation but natural gas prices are so high they would not cover
the operating costs, Fluckiger said.
   ``Requests have been made to operate those facilities and then
have the utilities pay for those excess gas costs,'' Fluckiger
said. ``The utilities have not been able to do so. They have
requested permission from the PUC to be able to pass those costs
through to customers.''
   Utilities would decide who would face blackouts, he said. They
try to avoid areas with essential services such as hospitals,
Fluckiger said.
   California's power market has been hit for months by tight
supplies and price spikes. Electricity deregulation, cold weather
and rising power costs have been blamed for the state's most recent
problems.
   California approved a phased-in deregulation of the electricity
market in 1996 to try to lower prices for consumers through
competition, but so far it has led to higher energy prices.
   The Northwest, heavily dependent on hydroelectric power, has
faced low water tables and had to import electricity from
California and other states.
   And wholesale power costs have been soaring, due in large part
to skyrocketing prices for natural gas. Wall Street is worried
about utilities' economic health, and on Tuesday, a consumer group
urged the state to seize and run the strapped $20 billion
electricity system.
   A Stage One alert was declared Wednesday morning, meaning power
reserves were below 7 percent and all power users are asked to
conserve.
   Stage One and Stage Two emergencies, in which power reserves
fall below 5 percent, have become routine this month, but last
Thursday's Stage Three was the only time the threat of blackouts
loomed.
    ___=
    EDITOR'S NOTE: Associated Press writer Bart Jansen in
Washington contributed to this report.
   AP-WS-12-13-00 1646EST