The following definitions are taken from the California Independent System Operator's page:
Stage 1: Operating reserves are less than minimum. Advise the Utility
Distribution Company of potential power shortages and request
the UDC to advise end-use customers to reduce demand to minimum
requirements without disruption of employment or curtailment of
industrial production or commerce. Advise the UDC to prepare for
imminent implementation of the interruptible load programs and/or
electrical emergency plan.
Stage 2: Operating reserves are expected to fall below 5%. The UDC
will implement interruptible service programs AS DIRECTED BY
THE ISO and will take all additional actions necessary in
preparation for immediate implementation of electrical emergency
plans and await further orders from the ISO.
Stage 3: Operating reserves are expected to fall below 1-1/2%. The UDC will
implement their electrical emergency plan and/or other load dropping
to effect 0 MW of involuntary firm demand reductions (i.e., in
addition to ALL Interruptible Service reductions) no later than
hours.
The significance of this for us is that, if the ISO calls a Stage 3 power alert, rolling blackouts can occur without warning at any time, anywhere in California (with a few exceptions, but none around here that I know of). A rolling blackout is a loss of electrical power in a limited area for a period of not more than two hours.
A Stage 2 power alert means that certain customers, who have arranged for this ahead of time with the power company in exchange for lower rates, may have their power cut off. UCSC does not have an agreement like this with the power company. However, a Stage 2 power alert may lead to a Stage 3 as the time of peak demand approaches.