Edison Chairman Warns of Another Power Crisis

HOUSTON —  Edison International Chairman John E. Bryson warned Thursday that California could face recurring power shortages and blackouts in the next few years if the state doesn’t act quickly to get its electricity markets in order.

Bryson was intent on delivering what he called a “strong and dire message” about the situation in California, which he said was not adding power plants fast enough to keep up with demand. And he did exactly that at a national energy conference here packed with top industry executives as well as federal and state regulators.

“It is important to raise the alarm bells because there is literally the risk that there will be insufficient power in the state,” Bryson said. “We’ve been through that before. People don’t see it coming.”

Bryson cited a worst-case forecast by the California Energy Commission that suggested that the state could run short of electricity as soon as 2006, even if several pending power plants are completed and come online. The California Independent System Operator, the not-for-profit agency that runs much of the electric grid, issued an even more downbeat forecast.

“We could be in trouble in 2006,” said Stephanie McCorkle, a spokeswoman for the agency. “But we have not ruled out the possibility of electrical emergencies as early as this summer,” especially if the state gets unusually hot weather combined with limited rainfall to fuel hydroelectric plants.

The warnings help make the case for a pending project by Southern California Edison, the Rosemead-based firm’s utility arm, which hopes federal regulators will allow the company to build its first power plant in decades.

Consumer advocate Michael Shames, who attended the Houston event, noted that Bryson’s uncharacteristically blunt speech might have been partly designed to help overcome opposition to the plant, called Mountainview, in Redlands.

“It was alarmist, and it was self-serving. And it was accurate,” said Shames, executive director of the San Diego-based Utility Consumers’ Action Network. “In some ways, he was raising an embarrassing mirror to the state. Here we are, four years into this debacle, and where are we? Where are the solutions? I share his frustration.”

California’s disastrous foray into deregulation led to soaring prices and rolling blackouts -- as well as alleged market manipulation -- in 2000 and 2001, and the state backed away from competitive commercial markets.

But key rules remain in flux.

Bryson applauded a recent move by the California Public Utilities Commission to set requirements for how much extra power capacity that companies must have in reserve. But he said much more must be done.

“California needs a law, it needs a policy framework ... there needs to be new state legislation that sets out how California will provide power,” Bryson said. “There needs to be clarity -- and this is absolutely unclear -- as to which customers will be served by what means in California.”

Without such clarity, he said, companies will be reluctant to risk millions of dollars to build generating facilities. Bryson did not discuss it Thursday, but his company is said to be helping state lawmakers craft energy legislation aimed at establishing new rules.

Lawrence Makovich, a senior director of global gas and power at Cambridge Energy Research Associates, said his firm’s projections for the California energy market match those Bryson cited.

Makovich, whose firm sponsored the Houston conference, said California legislators and regulators were skittish about reshaping the energy market.

“There still is not a consensus on what went wrong in California, how much of it was a real shortage and how much of it was manipulation,” he said. “That is inhibiting solutions.”

Edison shares fell 14 cents to $21.75 on the New York Stock Exchange.