Some suspect SDG&E cried wolf during heat wave

Electricity not lacking despite dire warnings

By Jeff McDonald, staff writer
San Diego Union-Tribune, September 5, 2007

As temperatures rose across Southern California this Labor Day weekend, so did pressure on grid managers to meet record-breaking demands for electricity.

San Diego Gas & Electric saw more than 81,000 customers - roughly 1 in every 17 meters - lose power at some point during the three-day weekend. Additional homes and businesses went dark yesterday, although most were back to normal last night as temperatures began dropping.

Heidi Brousse waited almost 18 hours for power to be restored to her Scripps Ranch neighborhood. Her family ate by candlelight and bought dry ice to keep their food from spoiling.

"It gave you a true appreciation for what New Orleans has gone through," she said.

Despite the historic demand placed on the SDG&E system, all the outages were caused by lightning strikes and equipment failures - not a lack of electricity.

There were no rolling blackouts in the state. No Stage 1 or Stage 2 alerts, which are issued by the California Independent System Operator when supplies become short.

But when SDG&E officials began alerting customers and the media about the need to conserve energy early Monday afternoon, they warned of a "very real threat of a Stage 3" power alert - even though the company has no authority to issue such declarations.

"We need immediate energy conservation, or else there will be rolling blackouts," company spokesman Peter Hidalgo told the Associated Press.

Consumer advocates suspect that SDG&E deliberately linked its demand for conservation to the threat of rolling blackouts to boost support for the Sunrise Powerlink, the controversial transmission line proposed across Imperial County.

"They said there was a power emergency, a potential Stage 3, but there was no evidence anywhere I could find that there was anything that close," said Michael Shames of the Utility Consumers' Action Network, which opposes the Sunrise project. "SDG&E had plenty of power."

The California Public Utilities Commission had already scheduled a hearing in San Francisco yesterday to consider the 120-mile project, which is still months away from being approved or rejected.

SDG&E President Debra Reed insisted there was no ulterior motive behind the references. She said she didn't know that an SDG&E spokesman had cited rolling blackouts and Stage 3 alerts when talking to reporters.

"I don't think this is about politics," she said in an early afternoon interview. "This is a factual situation that we were trying to communicate."

Reed sought to further explain her company's communications strategy when she called back early last night.

She said the system had lost a key generator Monday morning and she worried that things might get worse, forcing SDG&E to start cutting power supplies within 10 minutes.

"We were on the edge," she said. "If I were to do it over again, I would not use that terminology. But from a customers' standpoint, it was going to look exactly the same as a rolling blackout."

SDG&E customers pay among the highest rates in the nation for electricity. The proposed transmission line between Arizona and San Diego County would add as much as $1.4 billion to local energy bills.

The phrases "rolling blackouts" and "Stage 1, 2 or 3 alerts" are not used lightly by industry professionals. They have serious economic consequences for major industrial and commercial users, which receive discounts in exchange for shutting down their power in times of crisis.

Bakeries, manufacturers and other industrial customers all consider the availability of power when deciding whether to shut down temporarily or push ahead with production.

Staged alerts can only be issued by state power authorities - not local utility companies. They are triggered in stages when supplies climb to within 7 percent, 5 percent and 3 percent of available reserves.

Rolling blackouts can be imposed by local utilities, but they are typically used only when the state grid operators have declared a Stage 3 alert.

SDG&E never called on discount buyers to cut back consumption over the Labor Day weekend. Instead, the company sought voluntary conservation efforts from hospitals, high rises and other major customers.

State electric grid officials said SDG&E never advised them of any power supply crisis.

"There's plenty of reason to push the conservation message in San Diego, but we have never been in any danger of a Stage 3 alert statewide," said Stephanie McCorkle of Cal-ISO, which runs most of the state's electric grids. "We want to clarify that. There is no power supply issue statewide."

McCorkle declined to comment on SDG&E's claim that a Stage 3 alert was a real threat Monday.

"The California ISO prides itself on putting out appeals for conservation only when they're absolutely needed," she said. "We don't want to cry wolf."

Stanford University economics professor Frank Wolek said SDG&E has some wiggle room in referring to rolling blackouts and staged alerts because some customers might have been cut off if demand had not receded.

But "using the word 'Stage 3' or 'Stage 1' is certainly not true; none were declared (Monday)," said Wolek, who studies the California energy markets. "In that sense, it's not what should have been said.

"Maybe what they were doing is using words that are familiar to people to try and get people to do things. That's where politics begins."

Don Wood, a former senior policy adviser at SDG&E who now runs a local energy think tank, said his former employer is working vigorously to get the new transmission line approved.

"SDG&E is attempting to put political pressure on the PUC to expedite hearings on the Sunrise Powerlink," he said. "I don't know whether their behavior during this heat wave is part of that campaign."