by JOHN HOWARD
Associated Press Writer
SACRAMENTO,
Calif. (AP) -- California strained through a chilly weekend to
keep electricity flowing, as wholesale power prices soared.
''I don't
know how long this can go on,'' said Greg Pruett, a spokesman
for Pacific Gas and Electric Co.
The California
Independent System Operator, which controls the power grid for
much of the western United States, declared a statewide alert
Saturday, urging California homeowners and businesses to conserve
power. The state narrowly avoided blackouts Thursday when power
reserves dwindled dangerously.
The power
crunch has been blamed on cold weather in the Northwest, the shutdown
of some generating plants for repairs or other reasons and the
effects of utility deregulation in California.
With an Arctic
front pushing freezing temperatures down from Canada, the Pacific
Northwest is bracing for another cold snap that is expected to
further increase demands for electrical power.
Washington
Gov. Gary Locke has asked homeowners and businesses to conserve
as much electricity and natural gas as possible, and Washington
state regulators met in emergency session Saturday to consider
allowing two utilities to offer financial incentives to big businesses
that agree to cut power use.
''If we act
quickly together, we can hopefully avoid disturbances and brownouts
next week,'' Locke said. Officials in Oregon, Wyoming, Idaho and
Montana have also joined the call for energy conservation.
''Once again,
it's the supply issue,'' said ISO spokesman Patrick Dorinson.
''We're all drawing off the same system.''
Late Friday,
the Federal Energy Regulatory Commission approved ISO's request
to lift price caps on wholesale electricity, a move the grid regulators
said would help ease the crunch.
But California
Gov. Gray Davis said the decision would only push electricity
prices higher. He said he has asked for a Congressional investigation.
Apart from
the FERC's decision, wholesale electricity costs have soared.
Last year,
utilities paid roughly $22 to $45 per megawatt hour, said Tom
Williams, a spokesman for Duke Energy, a wholesale power provider.
This year they have paid an average of 15 times that amount. A
megawatt is enough to power about 1,000 homes.
In California,
the two largest electrical utilities -- Pacific Gas & Electric
Co. and Southern California Edison Co. -- operate under a rate
freeze and cannot pass those wholesale price spikes on to their
customers.
Pruett said
PG&E has absorbed $4 billion in losses since June.
The price
of natural gas, which most power plants use to produce energy,
has also soared. A week ago, wholesale natural gas sold for less
than $20 per million British thermal units, the standard measurement;
on Saturday, it was selling for about $60 per million Btu.
California
in 1996 approved a phased-in deregulation of the $20 billion electricity
market, which was supposed to lower prices by increasing competition.
But demand for electricity has outstripped supply, in part because
of a growing population and a booming high-tech economy.
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