Bush concerned energy shortage is spreading in West

Monday, Jan. 29, 2001 | 11:02 a.m.

SUN WIRE SERVICES

Power plan

Nevada Power Co. and its parent Sierra Pacific Resources today planned to file with regulators what they call a comprehensive energy plan aimed at preventing blackouts and stabilizing electricity prices in Nevada. Details will be available this afternoon on the Sun's website lasvegassun.com

WASHINGTON -- President Bush said today he is "deeply concerned" that an energy shortage is spreading beyond California's borders to other western states.

Responding to concerns of some western governors, Bush today asked Vice President Dick Cheney to lead Cabinet members and senior administration officials in developing a national energy policy.

"This is a matter of high concern to our administration," Bush said as he met with members of Cheney's task force. "It's becoming very clear in our country that demand is outstripping supply."

Bush said he believes California officials are making progress in dealing with electricity shortages that have caused rolling blackouts in parts of the state over the last two weeks.

Still, he said, governors who met with Cheney last week were "concerned about the situation extending beyond California's borders and so are we."

Bush offered no timetable for the task force report. Members include Energy Secretary Spencer Abraham, Commerce Secretary Don Evans, Transportation Secretary Norm Mineta, Treasury Secretary Paul O'Neill and economic adviser Larry Lindsey.

Bush and aides have said power shortages and blackouts are a consequence of faulty California law on energy deregulation. Last week he gave some breathing room, extending until Feb. 6 emergency orders that require power and natural gas suppliers to sell into the state.

Lindsey said Sunday those orders won't be extended again. "Longer than that and there's real suffering for the rest of the West," he said.

The government's actions to help California have caused a diversion of resources that have hurt agriculture in Arizona and shut down paper mills and aluminum smelters in the Northwest, Lindsey said.

Today began as the 14th straight day California faced a Stage 3 alert, meaning electricity reserves were dangerously low and that blackouts were possible.

The Independent System Operator, manager of most of the state's power grid, had urged Californians to watch the Super Bowl on Sunday in groups to help conserve electricity -- something many had planned to do anyway.

As the week began, state legislators searched for ways to deal with the financial problems of the state's two largest utilities, Pacific Gas & Electric Co. and Southern California Edison.

Blackouts lasting about two hours hit nearly 2 million homes and businesses in northern and central California on Jan. 17 and 18. On Jan. 21, a power surge in Oregon caused a 20-minute outage affecting about 75,000 Northern California customers.

Meanwhile, state legislators continued discussions Sunday on two bills that deal with the financially strapped PG&E and SoCal Edison.

The two companies say they have lost $12 billion because they have paid sharply increased amounts for wholesale electricity while the state limits what they can charge their customers for that power.

One of the bills would authorize the state to step in and buy power from wholesalers under long-term contracts and sell it to PG&E and Edison customers. The other bill would provide the utilities with help in exchange for some sort of compensation.

The governor said Friday he prefers a plan under which rate payers or the state would receive stock options that could be cashed in when the utilities' financial condition improved. Davis is expected to receive a state audit on the utilities' finances early this week.

Also this week, the state Public Utilities Commission could consider a proposal by PG&E that would require one of its counterparts, Southern California Gas Co., to buy natural gas for 3.8 million PG&E customers.

PG&E, in a filing earlier this month, warned the PUC that it could be forced to cut off gas service to hundreds of thousands of Northern California residents.