Published Friday, Jan. 19, 2001, in the San Jose Mercury News

IF MONEY RUNS OUT

In doomsday plan, lights would be off 12 hours a day

BY STEVE JOHNSON AND BRANDON BAILEY Mercury News

This week's blackouts pale in comparison with the doomsday plan revealed Thursday by PG&E, which envisions hospitals and police without power for six hours a day and everyone else plunged into darkness for twice that long -- unless the utility continues to get help from the state.

``There would be about 2.6 million customers out of power at a time,'' according to the plan, which Pacific Gas & Electric Co. officials filed quietly with the California Public Utilities Commission on Jan. 9 and which was given to the Mercury News on Thursday.

The plan also said the outages could occur without notice, even to emergency centers and persons with critical electricity needs.

``PG&E intends to notify its customers on life support systems and its large customers,'' the plan said. ``However, depending on the timing, extent, and duration of the outages, PG&E may not be able to accomplish such notifications.''

PG&E officials stressed that such extraordinary measures were possible only in ``a worst-case scenario.'' Even so, they warned that preventing them largely hinged on the state Legislature's bailout plan, which entails having the California Department of Water Resources take over buying electricity for the cash-starved utility.

Company spokesman John Nelson said the firm was forced to draw up the plan two weeks ago under state regulations because it was in a steady spiral toward bankruptcy. Since then, the company's situation has worsened. PG&E can no longer buy power directly from electricity suppliers because the companies fear they won't get paid, he said.

Moreover, as of today, he added, PG&E no longer can obtain that power through the California Power Exchange, which runs a daily electricity auction, unless PG&E pays for it in cash. That is a problem for the utility, which can barely pay its bills.

``It's pretty grim,'' Nelson said of the ``massive outages that would occur'' under the plan submitted by the company. But he added that, ``obviously, that's a very severe scenario and hopefully a very unlikely one.''

The company can still obtain power through the California Independent System Operator, which oversees most of the state's power grid. As long as that agency -- or the state -- can continue paying for PG&E's power, there would be no need to put the doomsday scenario into effect, Nelson said.

But if for some reason the state or the Independent System Operator couldn't do that, he said, there would be no alternative.

Under the plan, PG&E would try to keep power flowing to as many of its customers as it could with the electricity it generates. But its own generation is severely limited. Under the 1996 law that deregulated the state's electricity markets, the company was encouraged to sell off many of its power plants.

Although it still retains its hydropower facilities and the Diablo Canyon nuclear power plant, the plan said those units can provide enough electricity for only 50 percent of its customers when operating at their peak. Unfortunately, with so little water in the hydro system, the company's plants may have enough power for only 30 percent of its customers.

``If PG&E were forced to depend solely on its own generation'' and some other power it has available through previous long-term contracts, the plan said, all of its non-emergency residential and business customers ``would be interrupted twice a day for six hours, 12 hours total, every day that PG&E is unable to procure electricity from the wholesale market.'' Emergency customers -- including hospitals, police and fire departments -- ``would also be interrupted twice a day for three hours, six hours total.''

It was unclear how long the Independent System Operator could continue buying the additional power to make up for what the utilities have been purchasing through the Exchange. ISO spokeswoman Stephanie McCorkle said her agency was prepared to cover its customers' needs -- at least for the immediate future -- but ``it's going to be a struggle.''

Unlike PG&E, Southern California Edison, which also has warned that it is headed for bankruptcy, has not filed any plan for cutting back service if it can't buy power through the Independent System Operator. It was effectively barred from buying power through the Exchange on Thursday, after it failed to make a $215 million payment.

Nonetheless, the utility hopes to persuade the Exchange to let it resume purchases through that agency, because ``we don't believe we are in default,'' said Edison spokesman Steven Conroy.

An aide to Loretta Lynch, president of the California Public Utilities Commission, said Lynch would have no comment about PG&E's plan. Commissioner Carl Wood said he wasn't familiar with the plan, except to add that, ``we're in a crisis.''

http://www0.mercurycenter.com/premium/local/docs/doomsday19.htm

-- Cave Man (caves@are.us), January 19, 2001

Answers

Pump Shutdown Had SFO Short on Jet Fuel Brown, Burton scramble to prevent havoc

Marshall Wilson, Chronicle Staff Writer Friday, January 19, 2001

Running out of gas is a hassle. Running out of jet fuel at San Francisco International Airport is a disaster.

That's what the world's ninth-busiest airport faced yesterday as the fuel gauge teetered toward "empty."

Due to the state's power crisis, the airport's supplier shut down the pipelines that feed the airport nearly 3 million gallons a day. The reserve tanks were sounding a bit hollow as well.

Without a quick fix, SFO would "be without jet fuel by (Friday) night," airport spokesman Ron Wilson said yesterday afternoon.

That would play havoc with far more than the 100,000 people who fly into or out of SFO each day. Flight schedules around the world would be in chaos, and the tons of cargo shipped through the airport would go nowhere.

DWINDLING SUPPLIES

Airport director John Martin, worried about dwindling supplies, tracked down San Francisco Mayor Willie Brown in Washington, D.C., where he is attending a Conference of Mayors meeting.

"The mayor received a call from airport officials and they explained the situation with the pipeline," Brown spokesman Ron Vinson said.

Brown called his friend John Burton, a San Francisco Democrat and president of the state Senate.

"What was said I'm not sure," Vinson said. "The next thing we knew, the pipeline came back into operation."

Last night, Burton said he put his top staff members to work to get the fuel flowing.

"I put my top people on it and it worked out, and I'm just happy," he said. "We're flying out of Oakland way too much these days."

SFO is supplied by two pipelines, a 12-inch line that runs from a Richmond refinery to the airport and a 10-inch line that runs to storage tanks in Brisbane.

In exchange for lower rates from Pacific Gas & Electric Co., which owns the pipelines, Kinder Morgan Energy Partners, agrees to voluntarily shut off power

--and therefore the pipelines -- during Stage 3 energy crunches. And there's been a lot of those lately.

"We've never had problems before, but we've never had power problems like this before," said Larry Pierce, spokesman for Kinder Morgan, a Texas-based company.

The company was offline 10 hours Tuesday, 18 hours Wednesday and for about another 10 hours yesterday because of the Stage 3 alert. Airlines, meanwhile, were rapidly depleting the fuel tanks.

RESERVE TANKS

SFO's reserve tanks hold up to 18 million gallons, or enough for about six days, Wilson said. The airport would have run dry by tonight if the tanks couldn't be refilled.

Because of its rate agreement with PG&E, Kinder Morgan is subject to fines for using energy during Stage 3 alerts. Pierce said he did not know how Burton intervened, only that company officials agreed to turn on the 12-inch pipeline.

"That's good news. The situation was pretty critical if we had not have been able to get that open," he said.

Pierce said the company plans to meet with regulators in hopes of receiving relief from high electrical rates or penalties. Burton said he was unaware of details his staff worked out with the company.

Wilson said a meeting is being arranged with the state Energy Commission, the airport, Chevron and Kinder Morgan to work out a plan to keep the jet fuel flowing. SFO is also offering to ship portable generators to Richmond in order to keep the fuel flowing, if needed.

Officials at San Jose and Oakland international airports said they were not facing fuel shortages.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001 /01/19/MN124840.DTL

-- Cave Man (caves@are.us), January 19, 2001.