Power bill might jolt Silicon Valley

Many Californians blase at long-term economic threat

January 27, 2001|By Scott Calvert | Scott Calvert,SUN NATION STAFF

SAN JOSE, Calif. - Power crisis? What power crisis?

Sure, California's two biggest utilities have a $12 billion deficit and are close to bankruptcy. Silicon Valley manufacturers have lost tens of millions of dollars because of sporadic outages.

And the Chinese ambassador to the United States found himself sitting in the dark last week at the $450-a-night San Jose Hilton.

But Andrew Sims, for one, is tired of hearing that his state - the world's sixth-largest economy and birthplace of some of its most innovative technology - is in panic mode because lights have gone off here and there.

He insists it's all been vastly over-hyped.

"Nobody cares," said Sims, a hotel concierge in San Jose. "It's the California attitude, or at least the Silicon Valley attitude: Until it affects me, whatever."

As politicians scramble to find a solution, experts say such attitudes might shift, depending on how consumers are ultimately affected.

The first universal impact of the energy crunch is just showing up on Pacific Gas & Electric Co.'s residential bills: an emergency rate increase averaging $5 per month per house, far from reflecting the actual cost.

No one knows what else might be in store as the state conducted an Internet auction this week to secure long-term energy supplies.

"The reality has not hit yet," admitted Ed Quiroz, an analyst at the California Public Utilities Commission.

By all appearances, it's business as usual in the state's third-most-populous city, despite a constant threat of rotating blackouts caused in part by a deregulation law that has battered the big utilities.

Until recently, the utilities haven't been allowed to raise rates, even as they have struggled under sky-high wholesale power prices, pushing supplies dangerously low.

There are some signs of energy conservation - an idle escalator here, dimmed lights there - and that advisory to watch the Super Bowl en masse for fear that one-fan, one-TV viewing will lead to another rolling blackout.

But the juice has flowed uninterrupted for the most part, and the downtown San Jose avenues graced by palm trees buzz with activity.

For some Silicon Valley residents, the response to the energy crunch has been classic - or stereotypical - California nonchalance.

They see it as just the latest in a series of gripes: an average sale price for a single-family home of $660,132, traffic congestion, the dot-com downturn ("Your stock.com may let you down ... but God won't!" promises a church billboard) and of course, the omnipresent threat of natural disaster.

"When you live with earthquakes, you can live with power outages," said Rebecca Elliot, who works at the Santa Clara County Association of Realtors.

Susan Fitts, a county spokeswoman who used to live in Washington, D.C., put it this way: "Two inches of snow in Baltimore causes much more havoc than 90 minutes without power here."

Yet no one would say this is California's finest moment.

"It's amazing a state like California didn't think about this and now has fallen into such a crisis," marveled Pinhas Blau, visiting from Israel.

He stood in the San Jose convention center, where a banner advertising the Photonics West conference boasted, ironically, "Showcasing the Power of Light."

"There is embarrassment," said Steve Tedesco, president of the San Jose Silicon Valley Chamber of Commerce. "It's `Who screwed this up? Who was asleep at the wheel?' We probably took energy for granted. You flip the switch and it comes on."

While Tedesco points a finger at Gov. Gray Davis and other state leaders, some residents suspect that power suppliers concocted a crisis to make money, especially those from out of state, such as Houston-based Enron.

In turn, Enron Chairman Kenneth Lay, who is one of President Bush's chief energy advisers and contributors, said last week that Californians still "need to see price signals and start modifying behavior to reduce demand."

Last week, 100,000 Pacific Gas & Electric customers in Silicon Valley lost power, the utility said.

The outages lasted about 90 minutes and were designed to minimize disruption to any single area. That meant one house could be dark, while the others on the street had power.

Hospitals, fire stations and other critical customers are spared, but the lights have gone out at post offices, shopping malls and schools.

They went out last Thursday at the 355-room Hilton San Jose and Towers, without warning. Then the hotel's backup generator malfunctioned for 40 minutes.

"We were dark," said general manager John Southwell.

It happened in the middle of the day when most guests were out of the building. But one man at the hotel was Li Zhaoxing, the Chinese ambassador.

He had only one request - hot tea - and the hotel staff managed to find a portable burner to make the diplomat some jasmine tea.

The bright side of the energy crunch, Southwell said, is the way it has made people want to save electricity.

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