Why Sue was stuck in the elevator: ENRON

(Sue was trapped in an elevator for 45 minutes on Sept. 12 during a major blackout in L.A. She explains why.)

Official Version:  “Absent
and/or inappropriate communications between two of the largest and most
critical control areas in the western United States.”
By Way of Example:

The [Blackout
Study] report [issued by the Los Angeles Department of Water and Power]
concluded that several people were in positions to prevent the
incident, but does not identify them. A private engineering contractor
that drafted the initial design for the automated control system did
not account for the replacement of an old breaker relay “since it was
outside their requested scope,” and DWP design engineers indicated they
would design the replacement for the old relay but had not gotten to it
in time, the report said.

A test engineer discovered the omission and tried to fix the problem,
but a print with errors was given to the work crew, which cut the wires
without testing them to see if they were electrified.

“This outage was a result of a chain of events,” the report concluded.
“A design error resulted in a major rework by the field test engineer.
If a design review of the contract engineering work had been conducted
by LADWP engineers, the errors would have been caught prior to being
released to the field for construction.”

The miscommunications continued with the field workers at the Toluca Lake facility.

Knowing the correct design called for the existing wiring to remain,
the test engineer didn’t cut power to the wiring, the report said.
“However, because the incorrect prints given to the wiremen showed the
wires to be moved, the wiremen disconnected the energized wires.”

And so Sue stalls in the lift.  But why wasn’t back-up power available, you ask?  Because:

Tensions have been
rising between the Los Angeles Department of Water and Power and
California’s main electricity grid operator ever since the state’s
energy crisis of 2001…
The DWP, a public utility owned by the city of Los Angeles, operates an
independent electrical generation and transmission system and is not
part of Cal-ISO, which controls 75% of the state’s electrical grid…
Cal-ISO is charged with helping to refund $186 million to the DWP from the 2000-01 energy crisis…
[S. David Freeman, former general manager of the DWP, and now an energy
advisor to the State of California] said he expected the state’s debt
related to the energy crisis to be paid back to the DWP in the near
future, as soon as the courts and federal energy regulators resolve a
complex legal and financial case.

DWP operators … failed to respond to calls from Cal-ISO on Aug. 25,
when a 3,100-megawatt transmission line, controlled by the DWP, failed,
forcing Cal-ISO to order rolling blackouts for customers of Southern
California Edison Co. and other utilities.

[On Thursday] a control room engineer at the DWP rudely refused to sell
excess power to the grid operator as wildfires endangered a giant
transmission line and threatened to black out parts of Southern

The head of the California Independent System Operator called the
refusal, which was captured on a routinely taped phone conversation,
“irresponsible.” The conversation was between two control room
engineers, Ken Larson of the DWP and Ricardo Perez of Cal-ISO.

CAL-ISO: Hey, this is Ricardo at the ISO. How ya doing?
DWP: All right.

CAL-ISO: I was looking to see if you would, by any chance, you have any energy available for next hour.
DWP: You calling me for energy?

CAL-ISO: Right.
DWP: First megawatt will cost you $186 million.

CAL-ISO: Oooo — OK! How about the second one?
DWP: Because that’s what you owe us for the last time I sold you power years ago.

CAL-ISO: OK. I don’t think it was here. I wasn’t the person you sold it to.
DWP: I have nothing available for you. We don’t do business with you.

CAL-ISO: Oh, OK. Well, sorry, no problem.
DWP: OK. Bye.

Quite possibly, Mr. DWP didn’t get his raise because DWP was owed $186 million, or so they said.  But eventually this will wind its way through the courts…

[In May 2005]
Attorney General Bill Lockyer … filed a lawsuit against PowerEx and
Public Service Company of New Mexico (PNM) in which the state alleges
for the first time that Enron-devised trading schemes used to inflate
prices during the Energy Crisis – in this case “ricochet” transactions
– constituted a conspiracy to restrain trade that violated California
antitrust laws.

“Ricochet was one of the power companies’ favorite Enron games, and
they used it to gouge Californians by more than $1 billion dollars,”
said Lockyer. “Our evidence shows PowerEx was the most prolific
practitioner of ricochet. This lawsuit seeks to hold them accountable
for their rampant antitrust violations and recognizes a fundamental
reality – they couldn’t have done it without co-conspirators.”

Ricochet refers to the tactic of buying power in the state, “exporting”
it outside ISO’s control area, then “importing” it back into ISO’s area
and selling it at inflated prices as OOM transactions.

“The conspiracy caused disruptions in the ISO grid, power shortages and
higher prices …,” the complaint alleges. “In consequence of these
acts, these higher prices were ultimately passed to California

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