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Most of West in the Same Power Jam as California

Utilities: Other states ran their grids at fever pitches as populations swelled and few new energy sources were developed. Now, also facing blackouts, they want to tilt balance of power away from the Golden State and toward themselves.

February 26, 2001|PETER G. GOSSELIN | TIMES STAFF WRITER

WINTERSBURG, Ariz. — For more than a century, California ran a simple account with the rest of the West: It demanded and the West supplied, most especially water and power.

But as the Western states have ballooned in the last decade--in no small part because of an outbound trek of Californians--this simple, supply-demand relationship has broken down.

Fundamentally, the rest of the West has outgrown its electrical system just as California has its own. And it has done so in very much the same way--by adding too many people without enough new power or conservation.

Indeed, statistics show that much of the rest of the West would have been on the verge of trouble even without California's help and may yet face the sort of rolling blackouts that have wreaked so much havoc in the Golden State.

The booming Southwest has run its power grid at such a fever pitch that its planning reserves--the extra power that utilities build in to handle emergencies--have shrunk to levels that many regulators and industry experts consider dangerous.

Almost none of the West save Montana has increased its power production at anything like the pace of its population growth during the last decade. Despite the long economic boom of the 1990s, which smiled especially on the West, several, such as Arizona, have failed to complete a single new power plant.

"We don't know how bad it's going to be yet," said Utah's Republican governor, Mike Leavitt. "We won't know that until May, June, July and August, when everyone in the Southwest turns on their swamp coolers."

In trying to dodge the blackout bullet, many Western leaders are seeking to force a great change on the region: to renegotiate their states' basic deal with California. They want to end an old relationship--that between center and hinterland, colonizer and colonized--and establish a new one that could curtail California's long regional dominance.

In the strange chemistry of the moment--when a once-Republican state government has turned Democratic and a once-Democratic national government has turned Republican, when the battle is to a large extent over privately owned electricity rather than publicly controlled water--they could actually meet with some success.

"California spent the 20th century decolonizing itself from Wall Street and the East," said Kevin Starr, the state librarian and author of a multivolume history of California. "Now, all of a sudden, there's a dramatic possibility of it being recolonized, at least in part, by the rest of the West."

Captive Plants Feed Power to California

Ground zero for these changes lies 50 miles west of Phoenix in the dry scrublands of Wintersburg. This is home to the Palo Verde nuclear facility, now the nation's single biggest power producer. It will soon be home as well to between three and six new gas-fired power plants that, combined, will produce even more electricity than their giant neighbor.

Palo Verde represents a great deal about the old, fraying world of regulated utilities and about the supply-demand relationships that California once maintained with the rest of the West.

More than one-quarter of the plant is owned by Los Angeles' municipal utility, the Department of Water and Power, several other California cities and Southern California Edison.

A row of steel latticework towers runs off toward California, carrying a transmission line from plant to consumer. California has big stakes in a half-dozen similarly captive plants in an arc of states from Nevada to New Mexico.

From California's point of view, the beauty of these projects has been that they provided near-certain power without the muss of meeting state pollution standards or the political hassle of building closer to home.

And at least until the mid-1990s, California regulators virtually guaranteed that their owners covered their costs and made profits, even if plants' power wasn't immediately needed.

"The first principle of the old system was that you had to be able to meet demand, no matter what," said Paul L. Joskow, a veteran utility economist at the Massachusetts Institute of Technology.

"If you had too much power, if it cost you a little too much, that was less important than being sure you could meet demand." And, he added, "you had regulators watching to make sure you did."

The gas-fired plants that are about to pop up in Wintersburg are also representative, but of the new, deregulated world of power production. Although they will crowd in around Palo Verde and tap into the same California transmission line, they are being built on an entirely different business premise: selling power to the highest bidder.

In fact, the reason this empty patch of desert has become such an electricity hot spot lately is not Palo Verde itself, but its huge transmission lines. In addition to the California line, four others fan out from the plant: two back to Phoenix, one east to New Mexico, and one north to Utah and from there to the Northwest.

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