Transmission system vulnerable if hit by even slightest problem.

When a faulty sensor at a local power station failed two weeks ago, causing the shutdown of a major power transmission line, officials had no trouble locating adequate alternative power supplies.

Trouble was, they had no way to transfer the additional power from those faraway plants to where it was needed most: the sweltering inland valleys of Southern California. Surging demand from people cranking up their air conditioners in 100-degree heat had gobbled up all available space on the local transmission grid, forcing regulators to institute rolling power shutdowns that hit 500,000 customers in the L.A. area.

Experts warn this is only a taste of things to come. The state's transmission grid is so stretched and has so many bottlenecks that even the slightest glitch could set off rolling blackouts again in L.A., either this summer or next. Even hundreds of millions of dollars in belated upgrades have not been enough to relieve chokepoints on a system that has not kept up with surging demand.

"Simply put, we have not built enough transmission lines and there's a real risk of energy emergencies in Southern California," said James Sweeney, professor of management science and engineering at Stanford University who has studied the state's power grid.

Last week, in response to the rolling blackout, Gov. Arnold Schwarzenegger reintroduced his energy policy, calling for a "major overhaul" of the state's transmission grid. In an attempt to speed up approvals for new transmission lines, Schwarzenegger has proposed moving responsibility for siting high voltage lines away from the state's Public Utilities Commission and to a new Department of Energy.

"The people and businesses of California deserve a stable, affordable and reliable source of energy," Schwarzenegger said in a press conference. "Last week's transmission line hiccup should be a wakeup call to us all that more generation and more transmission are badly needed."

Regardless of whether Schwarzenegger's proposal passes--and that's no sure thing considering an earlier version died in the Legislature in May--state regulators are becoming more proactive in planning upgrades of the transmission grid as they attempt to ward off future blackouts.

For years, upgrades to the 32,000 miles of major transmission lines within the state have been left to state utilities or third parties. Before deregulation, that was sufficient. Most power was generated locally and utilities assumed responsibility for maintaining and upgrading their transmission lines, getting PUC approval to pass on the costs to ratepayers.

But with deregulation, utilities were required to open their transmission lines to other electricity providers and were no longer the sole energy sources for their region. That took away the incentive for utilities to build more power lines, Sweeney said. It was also cheaper for independent generators or other third parties to rent space on existing power lines rather than go through the expense of building new ones.

Meanwhile, as utilities divested their generating assets under deregulation, power has had to be transported over ever-longer distances, including from the neighboring states of Oregon, Washington, Arizona and Utah. That means more power than ever must cross long-distance high-voltage transmission lines to get to high-demand areas in California.

What's more, power lines spawned opposition from local residents who feared visual blight would cause their property values to drop and who grew increasingly concerned about the health effects of electromagnetic fields generated by the lines.

"The NIMBY (Not In My Back Yard) factor has been a significant deterrent to some projects and raised the costs of others," said Greg Fishman, spokesman for the California Independent System Operator, which runs most of the state's transmission grid.

One major project in the San Diego area was scrapped entirely due to residential opposition, while a transmission line on the San Francisco peninsula is being routed underground at considerable extra cost, he said.

As a result, even if the investment dollars materialize, it typically takes about five years to steer a major transmission project through the approval process and another two years to build it.

Meanwhile, electricity use has grown about 4 percent per year, much faster than projected a decade ago when many of the projects now under way were planned. Complicating matters, the greatest growth has taken place in inland areas with hot summer temperatures.

"Because of this inland growth, we had new congestion points in our transmission grid that we didn't anticipate a few years ago," said Ron Litzinger, senior vice president of transmission and distribution for Southern California Edison, the electric utility subsidiary of Edison International that owns and operates some 5,000 miles of transmission lines. "Now those must be addressed."

Litzinger said Edison plans to spend $1.6 billion over the next four to five years to upgrade and expand its major transmission lines, including a $680 million line from Palo Verde in western Arizona to the Palm Desert area and a $200 million-plus line from the Tehachapi Mountains to Acton. Both lines are expected to be operational in 2009 and bring an additional 1,700 megawatts to the local power grid.

Edison also plans a $7.5 billion to upgrade the transmission system within its service territory, primarily in improving connections from substations to local homes and businesses. That's on top of $450 million in transmission upgrades over the last five years.

By comparison, officials with the Los Angeles Department of Water & Power say the municipal utility's transmission system is not nearly as stretched as Edison's and as a result it plans only modest upgrades.

It was one such upgrade last year that was the immediate cause of the Aug. 25 rolling blackouts. A sensor in a Sylmar substation at the terminus of a recently enhanced high-voltage line from Oregon failed, tripping the entire transmission line.

With the intense demand filling virtually every other transmission line to capacity, there wasn't any more room on the grid to import more power.

Rather than risk overloading the system and causing a massive blackout, Cal-ISO officials ordered rolling outages.

Meanwhile, DWP officials are focusing on re-powering retired power plants, according to Ed Miller, director of power systems operations and maintenance for the city agency.

"We just don't need the same amount of long-distance transmission lines as other utilities do at this point," he said.

On Line

Major transmission line ownership in California.

                                         Miles   % of
Entity                                   Owned   Total

Pacific Gas & Electric                  18,491    0.58
Municipal Utilities (including LADWP)    5,225    16.5
Southern California Edison               5,129    16.2
San Diego Gas & Electric                 1,906     6.0
Federal Government                         971     3.1

Bulk, high-voltage and long-distance transmission lines;
excluding local distribution lines to homes, businesses.

Source: California Independent System Operator