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UPDATE 3-Conservation lets Ontario dodge more blackouts

(Releads. Updates with fresh Eves' comments, details)

By Ka Yan Ng

TORONTO, Aug 18 (Reuters) - Conservation efforts allowed Ontario's still-fragile electricity system to make it through the day on Monday after North America's worst-ever blackout shut most of the system down last week.

The Ontario government, pleading for business and residents to halve energy consumption, said an "exemplary" response had allowed Canada's most populous province to get through the day with no major disruptions even though electricity supply was still well below normal levels.

"Tomorrow will really be the same drill as today," said Ontario Premier Ernie Eves.

The Independent Electricity Market Operator, which regulates the provincial electricity grid, said Ontario was capable of generating 19,700 megawatts of power on Monday as generators were still building up to operate at full capacity.

On a typical weekday 21,900 MW are needed in Ontario.

Eves said peak demand on Monday, when temperatures were cooler than last week, was 18,270 MW. A hotter day could lift demand to 24,000 MW, close to normal generating capacity.

Conditions later this week could prove to be more critical as the mercury is expected to rise to about 30 C (86 F) and demand for air conditioning rises.

Officials warned that the threat of rolling blackouts was not yet gone and conservation was key to maintaining a safe gap between supply and demand.

Automakers across southern Ontario agreed to scale back production to lower demand. Other big businesses around the province chipped in by lowering lights and shutting off electric billboards, slowing elevators and cutting air conditioning.

In Ottawa, most of the city's 55,000 federal civil servants were told not to come into work. Only essential staff in the provincial government were working.

Canada's federal defense ministry on Monday began examining why its office of emergency preparedness -- designed to cope with major disasters -- had performed so badly during the blackout. The office's own communications system crashed, which meant it could not give timely information to federal officials or the media.

The confusion was only made worse when Defence Minister John McCallum erroneously blamed the blackout on a fire at a U.S. nuclear power plant.

"We are looking at a post mortem, a 'lessons learned' session. I think the minister chose to do it today while it's all fresh in everyone's mind," one official told Reuters.

Herb Dhaliwal, Minister of Natural Resources Canada, told CBC television it might take months to determine the cause of the power outage. Dhaliwal and U.S. Energy Secretary Spencer Abraham are set to meet in Detroit on Wednesday to form a plan for investigation by a joint Canada-U.S. task force.

Toronto's subway, a big power user, reopened on Monday morning after officials were assured its power supply would be protected. It had been shut down since Thursday afternoon when tens of millions of people across the northeastern United States and Ontario were left without electricity.

As a result of the blackout three people died in Ontario and a fourth death from heat exhaustion is being probed.

(With additional reporting by David Ljunggren in Ottawa, Rajiv Sekhri and Rachelle Younglai in Toronto)