Only a poor summer can save Californian's from more blackouts, according to a recent report

The likely unreliability of electricity supplies in California this summer and all that goes with that prospect will depend on a whim of nature as much as the policies and power struggles of governor Gray Davis’ administration, according to a special report published by FT Energy entitled Out of Eden: California on the brink. Lack of rainfall, depriving the state of a significant percentage of its hydro power supply, has already contributed hugely to the problem and this summer’s temperatures will decide the severity of the summer peak in demand. Another unknown effect is the extent to which Californians will respond to higher prices by conserving power, or at least reducing consumption.

Omens are not good, however. Temperatures in early May rose to record levels and rolling blackouts affected more than 100 000 customers in what power grid operators warned was a preview of the summer. Hour long outages hit portions of selected cities for the first time since March, but for the fifth time so far this year, and rush hour traffic jammed as signal lights went dark. And urgings from the independent system operator to reduce demand, mainly because several key power plants were shut down for pre-summer maintenance, went unheeded as temperatures rose into the nineties in major cities.

But political solutions will not come readily. State regulators have asked for reports from the Public Utilities Commission on whether small power producers are meeting contractural obligations to provide the utilities with energy despite not being paid for months. The qualifying facilities (QFs) supply a quarter of the state’s power but since the beginning of the year have been falling short by around 3000 MW owing to lack of payment; and national regulators the Federal Energy Regulatory Commission have been stalling on meetings designed to address price relief for wholesale electricity markets in California. Industry rumour says that the three member commission cannot agree on measures to hold down prices in the Californian system.