Greg Lefevre: Understanding California's rolling blackouts

Greg Lefevre

CNN San Francisco Bureau Chief Greg Lefevre is covering California's energy shortage, which has already led to rolling blackouts.

Q: A rolling blackout means power goes out in a limited area for a limited period of time. How does that work?

LEFEVRE: Something like 550 megawatts is taken offline at a time. A megawatt is a thousand homes, so figure about a half-million homes will be taken offline. Northern California is divided into 14 numbered blocks -- like scattered circuits around the state -- so that those outages are spread around from area to area for a limited period of time. The utilities announce in advance which blocks would be affected if a rolling blackout is necessary.

Q: How do you know if you are next?

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LEFEVRE: If you are a Californian, look at your utility bill. Down at the bottom, below your address, it gives the number of your "rotating outage block." My own bill also says HSE, which means I'm somewhere near a hospital and my neighborhood won't go dark.

Q: What is the state's plan to keep the power flowing?

LEFEVRE: What the state wants to do is commit almost half a billion dollars to buy electricity on the open market and sell it to the utilities. The utilities' credit is in the trasher right now because both of the major utilities in California (Southern California Edison and Pacific Gas and Electric Co.) have, in effect, defaulted on their payments.

Gov. (Gray) Davis said late (Wednesday) night that he has commitments from four major electrical suppliers to bring in electricity at a very reasonable rate. What he did not say was -- how much electricity these suppliers have committed to, and whether that will be enough to run the state.

Q: How did things get to this point?

LEFEVRE: The state deregulated electricity, which means that it allowed itself to go out on the open market and buy. At the same time, the utilities were ordered to freeze the rates they charge their customers. So the price on the open market went up -- because there are only a few suppliers -- and the price to the consumer stayed low. The utilities were paying many times more than they were charging, and they've gone, literally, broke. Southern California Edison has defaulted on one $500 million payment already, and Pacific Gas and Electric has defaulted on another.

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Dynegy
PG&E Corporation
SoCal Edison
  • Deregulation - What this means to you - Electricity Market Issues
System Conditions - The California ISO
California Public Utilities Commission
California Utilities Emergency Association

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