Energy chief orders power to California; blackouts apparently averted for now

"We need to reform and, where necessary, re-regulate California's electric system," possibly letting utilities generate their own power as they did before deregulation, said John Bryson, president and chief executive officer of Edison International.

Earlier Wednesday, state regulators warned blackouts were imminent due to power shortages within California and an inability to buy more electricity from out of state, mainly from the Northwest.

The warning came from the Independent System Operator, keeper of California's power grid. It said electricity supplies were so perilously low it might declare a Stage 3 power emergency for the second time in a week. At Stage 3, the grid can impose blackouts.

Shortly after the ISO's warning, Richardson said he would use emergency powers to force wholesalers to sell power to California at a price he deemed fair. He said he was also asking that two large Pacific Northwest power generating associations generate more power to send to California.

"Our objective is to keep the lights on in California through this emergency situation," Richardson said.

ISO officials said the threat of blackouts was averted after the Bonneville Power Administration diverted 1,500 megawatts to California and some suppliers that balked at selling power on credit to utilities in the state relented.

"It is not likely we will have any outages" for the rest of the week, said Kellan Fluckiger, the ISO's chief operating officer. He said Richardson's actions were key in avoiding blackouts Wednesday, but the state was not "out of the woods" in the long run.

Earlier in the day, Fluckiger said the chances of blackouts were better than 50-50 after about a dozen out-of-state suppliers announced they would demand cash before selling power to California due to concerns about the utilities' solvency.

Fluckiger said officials might have to interrupt power to about a million customers Wednesday afternoon and increase the blackouts to cover three million or four million in late afternoon and early evening, when people came home from work and power demand hit a peak.

"The credit limits of utilities and what markets are willing to sell us have been reached and surpassed in many cases," Fluckiger said.

Utilities would decide who would face blackouts, he said. They try to avoid areas with essential services such as hospitals, Fluckiger said.

California's two largest utilities, Pacific Gas and Electric and Southern California Edison, are near bankruptcy due to skyrocketing wholesale power costs, Gov. Gray Davis and Sen. Dianne Feinstein, D-Calif., said at a Washington, D.C., news conference with Richardson.

Davis and Feinstein asked federal regulators to set a regional price cap on wholesale electricity to prevent the high prices that have plagued California. On Friday, the Federal Energy Regulatory Commission lifted price caps in California, a move Davis opposed.<