Building Owners, Farmers May Feel Energy Pinch

Building Owners, Farmers May Feel Energy Pinch

May 16 - San Diego Business Journal

Blackouts aren't expected this summer, but some big energy users are preparing just in case.

"We're working hard to inform growers that reserves don't look too good for the summer," said Eric Larson, the executive director of the San Diego County Farm Bureau. "We're telling them to be aware and have contingency plans on hand. It could be a bad situation for growers who have to refrigerate fruits and flowers if there is a brownout."

Larson is counting on San Diego Gas & Electric Co. to get the word out as soon as possible if a severe crunch hits this summer.

Greenhouse operators, which number almost 900 countywide, might have the hardest time conserving during peak hours because of the nature of their business, Larson said.

Otherwise, "if there are voluntary calls for cutbacks, I think farmers will be able to assist in that and switch hours," he said.

An ongoing problem for big energy users is that "California continues to suffer from chronic under-generation of electricity," Larson said.

Craig Benedetto, legislative director for the San Diego Building Owners & Managers Association, agrees.

"Many of our building owners are putting in their own cogeneration facilities, upgrading lighting and heating and cooling systems, putting in reflective roofs," he said, adding that some had conservation measures in place before the 2000-01 energy crisis hit.

"A lot of them have invested millions in energy conservation, and we feel we've done our share, but we need an adequate production to meet demand," he said. "You can't conserve your way out of this problem. The key is to meet demand. You heard a lot of talk in 2001, and you saw a lot of new proposals afloat for new energy creation, new power plants, but they didn't materialize."

The California Independent System Operator issued its 2005 summer operations assessment last week.

"We are not predicting blackouts," said Stephanie McCorkle, an ISO spokeswoman. "But will conservation help us? You bet."

A nonprofit corporation that manages the power lines for the state's investor-owned utilities, the ISO issued its summer energy assessment based on two scenarios: a "1 in 2" summer, considered the most typical, seen about 50 percent of the time; and a "1 in 10" summer, which is unusually hot, and likely to occur in California only about 10 percent of the time, according to McCorkle.

For the worst-case, perfect-storm scenario, the ISO assumes that an additional 2,500 megawatts of energy that would be needed would not be available. Consider that I megawatt is enough energy to power 750 average California homes. Among the possible reasons: a Western regional heat wave and subsequently lower import levels, increased forced outages, lower hydro-generation available, due to the hot days, retirements of older generators, and delays in opening new facilities.

For a typical summer, however, the ISO predicts adequate capacity to meet demand, but thin margins could develop in Southern California if adverse conditions occur. In other words, "it will be tight," said Stephanie Donovan, a spokeswoman for the San Diego Gas & Electric Co.

Consequently, "Renewed and aggressive conservation efforts will be critical for California to avoid potential resource shortages," cautioned the ISO report.

"The ISO's worst-case scenario definitely makes businesses a little more exposed than they were last summer," said Michael Shames, the executive director of the Utility Consumers' Action Network, a San Diego-based consumer watchdog. "The electricity road to San Diego remains a somewhat bumpy ride, but I'm not expecting any major blowouts."