3. Curtailment Priorities Background

Utilities must implement mandatory outages if demand still exceeds supply after all available load reductions have been achieved through voluntary conservation and from interruptible customers. This is done by rotating outages through blocks of customers for approximately 60 to 90 minutes. These controlled, rotating outages are necessary to avoid system instabilities that could result in uncontrolled, system-wide outages, potentially involving not only California, but also parts or all of the interconnected western United States and Canada.

These plans go back to the 1970s. In 1973, there was a sharp reduction in the availability of fossil fuels for electric generation as a result of imported oil embargoes. At the same time, oil prices rose sharply. A drought the next year resulted in reduced availability of electricity from hydroelectric generation. To meet the potential shortages, the Commission issued decisions in 1973 and 1974 ordering that investor-owned electric utilities institute voluntary plans for conservation of electric energy, along with reduction of load by forced outage, if necessary.

The Public Utilities Code was amended in 1974 to require Commission adoption of a plan for allocating scarce electricity among customers in the event of shortages. (Pub. Util. Code §§ 2771-2776.) The Commission adopted a system of priorities for statewide reduction of electric service in 1976, with utilities filing necessary action plans. Utility action plans are filed, reviewed and revised annually.

A revised priority system was adopted in 1980. (D.91548, 3 CPUC2d 510.) As a result, specific entities providing essential services are exempt from rotating outages. These services include police, fire, prisons, national defense, some hospitals, and others. (See Attachment B for a complete list.) Since rotating outages are implemented by blocks of customers on electric circuits, many customers are exempt from rotating outages when they are on the same circuit as an essential customer.

The Commission's guiding principles for rotating outage plans are:

1. equitable distribution of the burden of outages;

2. no direct relationship between first outage and economic production, and

3. maximum load reduction early to avoid rotating outages if at all possible.

Commission adopted procedures for initiating rotating outages require that utilities have 40% of peak load available for rotating outages in 5% increments, so that at any one time up to 20% of customers may experience an outage of 60-90 minutes.