A season of sun, sand, and power outages
Dependence on electronic devices like computers makes blackouts more costly.
SAN FRANCISCO AND NEW YORK — An energy problem is brewing this summer that has nothing whatever to do with the price of gasoline.
You can find it in the offices of the California Energy Commission, which has told its employees to put their computers in "sleep" mode when not in use.
Or in Yakima, Wash., where electricity prices are skyrocketing thanks to unseasonable heat.
It's also shown up in New York City's Upper East Side, where 76,000 customers lost electricity for a few hours recently.
Like last summer, the problem is that electricity is in short supply because US demand has been growing faster than supply.
But an additional twist is adding urgency now. Outages are rapidly growing more costly and disruptive to an American society ever more dependent on computers and sophisticated electronic devices.
"The cost of outages today is much greater than 10 years ago,"
Summertime ... and electricity is in short supply says Paul Carrier, an energy analyst with the US Department of Energy.
Agrees Karl Stahlikopf of EPRI Corp., an energy research company in Palo Alto, Calif.: "As we become more of a silicon society, the importance of the reliability of our electricity gets greater and greater."
Feeling hot, hot, hot
Because July and August are often peak months for electricity usage, the early hot weather has officials worried. The San Francisco Bay Area experienced rolling blackouts earlier this month, and the entire state of California has been on the brink of forced shortages much of the past week.
New York's corporation counsel, Michael Hess, worries about Con Ed, responsible for the recent outage in the Upper East Side. "The troubling question is, if they can't handle an 88-degree day in June, what happens when it gets to 98 in August?"
And prices are soaring in some regions. In the Pacific Northwest, some utilities are buying electricity on the open market for as much as 50 times the normal price. Shortages in the Northwest have had an impact in California, reducing its ability to import spare power from the region.
While the West Coast is considered particularly vulnerable to further electricity disruptions this year, the North American Electric Reliability Council (NERC), an industry group in Princeton, N.J., also pinpoints New England, New York, Arizona, New Mexico, and southern Nevada as problem areas.
The city that never sleeps
Officials at New York's Con Ed, an electricity supplier, recently cut the power to six large apartment buildings on the Upper East Side after the temperature and humidity skyrocketed and a feeder cable overheated on a day when electric demand reached its third highest level in the utility's history. The cut-off outrages New York Mayor Rudolph Giuliani.
"The idea that they don't have enough power doesn't make any sense at this stage," he says.
Despite the problem, Con Ed officials believe they will have enough electricity to get through the summer.
"Supply is tight because the economy is booming and there is a lot of load growth," says Joseph Petta, a Con Ed spokesman. But, he says, "clearly more power plants are needed to meet the demand for the future."
Although sizzling weather is partly to blame, deeper causes are behind the nation's greater vulnerability to brownouts and blackouts.
Messy deregulation process
The electric industry is undergoing a massive and, not surprisingly, messy deregulation process that is under way in more than half the states.
Some consumer advocates blame deregulation for higher prices. In New York City, for example, Con Ed now buys its power from other companies.
Mr. Petta says that until more generating capacity comes on stream to push prices down, New Yorkers will pay higher rates. "Customers can expect to see their bills rising over the summer," he warns.
Congress is considering legislation that advocates say is urgently needed to bring greater reliability to the delivery of electricity. The Senate recently passed a bill that would create an industry self-regulatory organization to set mandatory reliability standards.
"The longer it takes to establish this new system," says David Nevius of NERC, "the greater becomes the risk and magnitude of grid failures."
In addition to deregulation, a buoyant economy has accelerated electricity demand.
NERC estimates that US demand for electricity will grow just under 2 percent per year over the next decade, while supply will grow at 1.5 percent per year for the next five years.
"There is a gap there that needs to be addressed," says NERC's Eugene Gorzelnik.
The gap between supply and demand is what the industry calls the reserve margin. Nationally, according to the Department of Energy, the reserve margin has shrunk from about 25 percent a decade ago to 15 percent today.
No one is precisely sure what the optimum reserve margin should be in a deregulated market. But the recent decline in reserve capacity comes at a time when electricity has become more vital to the economy.
Greater impact of outages
It's not just that Americans use more electric-power goods, from TVs to videos and computers, but that power disruptions often shut down those products.
In the more mechanical age of only a decade ago, a blip in electricity might slow an assembly line or stop a clock, but things picked right back up when power was restored. In the digital age, many devices must be rebooted and reset.
The technology sector itself, by some accounts, now represents more than 10 percent of US electric demand, compared to a negligible portion in the early 1990s.
There is no doubt that the margin in California is less than healthy.
When it falls below 5 percent, the California Independent System Operator steps in and declares a Stage 2 emergency, which means a power interruption to some heavy users. That level of emergency was reached once last summer and already five times in June this year.
While California has recently licensed a number of new power plants, none will be up and running before next summer, at the earliest.
Meanwhile, the state is growing so rapidly that its electricity demand will increase over the next 12 months by the equivalent of adding another city the size of San Francisco.
(c) Copyright 2000. The Christian Science Publishing Society