Invoking the California energy crisis of the early 2000s, the top Democrat on the Senate Energy and Natural Resources Committee fears a repeat performance as the Golden State faces potential blackouts this summer.
Sen. Maria Cantwell, D-Wash., is all too familiar with the market manipulation and grid instability caused by Enron nearly 20 years ago, which affected the entire West Coast, including her state.
On Tuesday, she called on the Federal Energy Regulatory Commission to take pre-emptive action to ensure a crisis like that one does not befall California again. The commission is the nation’s grid watchdog and oversees and regulates the transmission of electricity between states, known as the wholesale market.
“As we learned during the 2000-2001 energy crisis, a problem with energy markets in California can spread quickly to Washington and other Western states,” Cantwell said in her letter to FERC Chairman Norman Bay. “I am concerned that natural gas shortages and supply disruptions in Southern California will increase electricity and natural gas prices throughout the region and enable generators and marketers to engage in Enron-like tactics to pad their profit statements at the expense of consumers.”
Enron manipulated the region’s market structure to create energy shortages to increase its profits, while jeopardizing the power supply across states.
The commission has been in talks with California over the last month about the possibility of major power disruptions due to a gas leak at a major storage facility in Southern California. The Aliso Canyon storage facility is closed as an investigation continues into the leak that caused entire communities to be evacuated. The leak took months to cap. The facility supplies natural gas to the fleet of power plants that the densely populated areas of the state need to keep the lights on. But it is not clear if the power plants will be able to run.
California has a lot of solar power at its disposal, but that power supply is intermittent and requires the gas plants to back it up. The federal commissioners say the situation poses a real threat of rolling brownouts and blackouts.
Cantwell’s office says there could be up to 31 days this year “during which gas deliveries will need to be curtailed because demand will exceed supplies, potentially causing 14 days of rolling blackouts in Southern California this summer.”
Cantwell is pleased California grid regulators have come together with an Aliso Canyon Action Plan, but she says the state needs FERC’s “vigilance.” She noted that in 2000, the watchdog was asleep at the switch when the grid fell apart. She said a situation like that cannot be tolerated again.
“Westerners still remember 2000-2001, when the ‘perfect storm’ of a poorly designed California energy market, drought conditions that dramatically reduced hydropower generation and FERC’s inaction combined to enable unscrupulous individuals and companies to gouge consumers throughout the region for billions of dollars in unwarranted energy costs,” Cantwell wrote. “History must not be allowed to repeat itself.”
