By Steve James

NEW YORK (Reuters) - New York power utility Consolidated Edison Inc locked out its unionized workers early on Sunday after contract talks broke down, both sides said, raising the possibility of power cuts during a summer heat wave.

The company asked to extend negotiations for two more weeks, it said, but the union, which had threatened a strike, refused. In response, the firm told union members not to report for work on Sunday.

The action increased the risk of power outages if a continuing heat wave puts extra strain on the electrical grid for New York City and suburban Westchester county.

"Both sides are far apart," said company spokesman Mike Clendenon. "We asked the union to extend the talks for two weeks but they refused."

"We can't operate the system reliably for customers if the union can still call a strike at a moment's notice," he said.

He did not use the term "lockout" but said the company notified unionized workers not to report for work. ConEd managers have been specially trained to handle emergency or maintenance work, he said.

John Melia, a spokesman for the Utilities Workers Union of America (UWUA) said that as of 2 a.m. Sunday (EDT) its 8,500 ConEd power workers were locked out.

"ConEd took the extreme measure of locking out its unionized workforce putting the city of New York and Westchester county in peril during a heat wave."

The lockout came as the summer's second heat wave hit the city of over 8 million people, with stifling temperatures near 100 degrees Fahrenheit (38 degrees Celsius), raising demand for power to operate air conditioners.

Both sides continued talking for over an hour after the midnight Saturday deadline expired, but failed to reach a settlement over a new contract for the company's unionized workers. A major sticking point in the contract was ConEd's plan to phase out defined pensions.

The union membership had authorized its leaders to call a strike at midnight on Saturday, when the collective bargaining agreement expired. A similar strike in 1983 lasted nine weeks, while a blackout in July 1977 - caused not by labor action but by lightning strikes - resulted in looting and civil disorder in the largest U.S. city.

As the deadline approached, 200-300 union members staged a rally in downtown Manhattan, chanting "If we go out, the lights go out." Continued...