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Tuesday May 15 1:36 PM ET
Calif. Summer Blackouts to Be Worse Than Expected


By Patrick Connole

WASHINGTON (Reuters) - Electricity shortages in California this summer will
be worse than state authorities had predicted, with blackout-weary consumers
facing 30 percent more outages than previously forecast, the North American
power grid overseer said on Tuesday.

The industry-led North American Electric Reliability Council (NERC) also said
New York City and New England had tight electricity supplies and could have
occasional outages if equipment or power lines broke down.

But the situation is dire in California, the nation's richest and most
populous state.

Californians could see as many as 260 hours of rolling blackouts during the
sweltering summer months, affecting everything from traffic lights to
hospital equipment.

Previous estimates by the California Independent System Operator (ISO) and
Western authorities estimated the state would have about 200 hours of
rotating blackouts this summer.

``California will experience difficulties meeting its projected electricity
demand this summer and California electricity users will experience rotating
blackouts, much more so than last summer,'' said NERC president Michehl Gent
at a news conference to unveil the group's summer power outlook.

TIGHT SUPPLIES IN NORTHEAST

NERC, which was formed in 1965 after blackouts crippled New York City and
other locales, said the northeast also had precariously tight supplies.

``New England and New York City are particularly sensitive to long-term heat
waves and high-than-expected generating unit forced outages,'' the NERC
report said.

The New York Independent System Operator (ISO), a non-profit entity that
dispatches electricity throughout the state, has developed an emergency
program for peak periods. That plan calls for industrial customers with
emergency back-up generators to use their own equipment when power supplies
drop below a certain level to free up power for other users.

A key issue for New York City is the speedy completion of 11 combustion
turbines now under construction, NERC said. The turbines will generate a
combined total of about 480 megwatts, and would operate during peak demand
hours of the late afternoon and early evening.

Experts say 1,000 megawatts is roughly enough power to serve 1 million homes.

Texas, which is seen as having ample power supplies, also will be monitored
closely because of state deregulation changes next month, NERC said.

``Texas will undergo a major shift in its operation in June when it opens up
to full retail access and consolidates 10 control area operations into one,''
NERC said.

Continent-wide, the overseer said no other regions were expected to suffer
shortages.

That includes the drought-stricken Pacific Northwest, which should be able to
meet its own needs for electricity, even though hydroelectric resources are
suffering from the lack of rain. That drought will prevent sales of hydro
power to California, which depends on the electricity to ease supply crunches
during the hottest months.

GOLDEN STATE WOES

For months, federal and state politicians and regional power experts have
issued warnings about the summer shortfalls hitting California. NERC said the
balance between supply and demand was worse than previously expected.

The state's ``deficiencies will be more severe than California ISO's expected
conditions,'' NERC said.

The industry group said supply shortages will range from about 4,500 to 5,500
megawatts during peak demand times each summer month. That is about 2,000 to
4,000 megawatts greater than state projections.

California may experience operating emergencies due to the state's reliance
on once-plentiful hydro resources, NERC said.

The average size of each rolling blackout -- or the amount of power lacking
-- will be about 2,150 megawatts, it said.

Under ``best case'' scenarios the state could have as much as 2,500 megawatts
capacity surplus over its required needs, but that under a ``worst case'' the
power grid could be deficient by as much as 13,000 megawatts.

``Both of these cases are deemed unlikely,'' NERC added.

California's chronic power crisis has already forced PG&E Corp's Pacific Gas
& Electric unit -- the state's biggest utility -- to file for bankruptcy
protection. The state's flawed 1996 deregulation law forced utilities to
absorb sharply higher wholesale prices instead of passing them through to
customers.




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