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Another Power Struggle

March 21, 2004

The only good news about the March 8 blackout was that Mother Nature and a regulatory glitch -- not a new generation of greedy power traders -- were responsible. Utility executives and regulators scrambled to characterize the interruption, which left 70,000 Southern California Edison customers in the dark, as a brief anomaly. But the incident underscores the need for Sacramento to overhaul the troubled regulatory scheme that helped to chase Gov. Gray Davis from office.

The power failure hit after a nonprofit organization that manages the flow of electricity in the state responded too slowly to summer-like temperatures that boosted demand for power. The California Independent System Operator, or Cal-ISO, blamed a control room crew for failing to quickly order utilities to boost generation. That led to a bottleneck on the main transmission lines, and Edison was ordered to shut off power to some customers to prevent a much-larger blackout.

A refresher for those who've blotted out memories of the energy crisis: The main causes were overloaded transmission lines, the failure to add electricity generation and the badly botched energy deregulation plan. Unfortunately, little has been done to remedy the situation, so California could face an uglier situation before the decade ends. Cal-ISO has warned that a painful electricity shortfall could hit by summer 2006.

It takes years to plan and build generation plants and utility lines, so Sacramento lawmakers must jump on energy legislation as soon as they finish their urgent dealings with the state budget and workers' compensation. Assembly Speaker Fabian Nunez (D-Los Angeles) deserves credit for pressing the debate by introducing AB 2006. His bill, though, clearly reflects Edison's view on reform. It's a welcome starting point but unlikely to win a consensus in an industry riven by competing interests. Utilities are often at odds with independent producers; the needs of residential and big business customers rarely coincide; and environmentalists' concerns can clash with utilities that want to build big, far-flung plants and then string transmission lines through wilderness.

Here's a message for all the parties: The status quo isn't an option. Lenders won't finance power plants until lawmakers determine who will build them -- utilities, independents or both -- and whether customers must deal with local utilities or can choose their own provider in a deregulated market.

Californians deserve an energy policy that protects consumers, reduces skyrocketing energy costs for businesses and provides a fair return for those who invest in generating, transmitting and distributing power. That's a tall order. But no one in the Golden State wants to be sitting in the dark or cursing the heat in days to come.

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