July 24, 2006

Record heatwave assails California

By Bernie Woodall

LOS ANGELES (Reuters) - A record-breaking heat wave pushed
California's power grid close to the breaking point on Monday,
but by evening it appeared the first rolling blackouts in five
years had been averted, power managers said.

"It looks like we dodged a bullet," said Gregg Fishman,
spokesman for the California Independent System Operator, after
power use had peaked.

Earlier on Monday, authorities issued dire warnings that
they might have to resort to rolling blackouts, spurring urgent
pleas for the public to take steps to conserve power.

In a situation that recalled the 2000-2001 energy crisis,
an estimated 100,000 Californians were without electricity
earlier in the day, a number than dwindled as the hours passed.
More than 1 million homes and businesses were without power
during the weekend, the state's largest utilities said.

The heat is blamed for the deaths of at least four

Health officials said one man died in a Stockton nursing
home on Sunday after the air conditioning gave out as
temperatures reached a sweltering 115 degrees F (46 C).

In Modesto, hospital officials said a patient died of heart
failure after being admitted with a temperature of 106 degrees
F (41 C) and authorities in Kern County were investigating
whether heat caused four deaths, including two from last week.

With reserve supplies on the power grid dwindling as
temperatures rise into triple digits, the California ISO called
a "Stage 2" power emergency. This means utilities may cut or
reduce power to businesses that agreed to respond when such an
emergency occurs in return for lower rates.

It was the first time since summer 2005 that a Stage 2
emergency was called, said Lori O'Donley of the Cal ISO.

Rolling involuntary blackouts are "Stage 3." The last Stage
3 was called in May 2001.

With another record day for power demand was forecast on
Tuesday, conservation was still important, said Marlon Walker
of Southern California Edison, which serves 4.7 million homes
and businesses.


"Conservation is absolutely necessary. It's not just key or
guidance. It is absolutely necessary if we are going to avoid
rolling blackouts," Walker said.

Cal ISO record demand Monday peaked at 50,270 megawatts in
mid-afternoon, 11 percent higher than the peak record set last
summer, and 21 percent higher than the most electricity
California used during the 2000-2001 energy crisis.

Since the energy crisis, when rotating blackouts were
frequent in California, several major changes have been made in
the way power is traded, said O'Donley.

Back then, almost all power delivered in California was
purchased in a next-day spot market, which companies such as
the disgraced and bankrupt Enron Corp. exploited to their
advantage. Prices on the California electricity spot market
rose ten-fold during the height of the crisis and power
delivery was unreliable.

More power plants and better power lines have also helped.

Still, as those plants and transformers on power poles
across the state continue to work hard in high heat, the
chances of failure rise, said O'Donley.

"The grid is working," O'Donley said. "But it's critical
that everything stay operational. We've got to keep our fingers
crossed that everything stays working. They have been running
full bore."

Temperatures are expected near record levels over much of
California on Tuesday, forecasters said. Sacramento hit a high
of 107 F (41.66C) on Monday with forecasts for 106 F (41.11C)
on Tuesday and 99 Fahrenheit (37.22 C) on Wednesday.

A megawatt in California can usually power about 700 homes,
but the number served per megawatt drops during record usage.

The Cal ISO transmits 80 percent of the state's

(Additional reporting by Leonard Anderson in San Francisco
and Scott DiSavino in New York, and Jill Serjeant in Los