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| Technology News - updated 7:38 PM ET Jan 18 |
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| Reuters | CNET | Internet Report | ZDNet | MacCentral | AP | NewsFactor | ||
Internet Blamed For California Power EmergencyBy John L. Micek, www.NewsFactor.comHard on the heels of Wednesday's rolling power blackouts in the northern part of the state, California Governor Gray Davis declared a state of emergency late Wednesday night. Analysts say that deregulation of the state's power industry lies at the root of the problem, but could Silicon Valley be at least partly to blame for California's energy woes?
"A SINGLE [Internet] DATA CENTER -- and we have many in the area -- CAN EASILY CONSUME MORE POWER THAN THE LARGEST MANUFACTURING PLANT WE SERVE," spokesman John Roukeme told the media. "If we don't get juice in here and the ability to move it around, WE'RE GOING TO BE IN TROUBLE," Pacific Gas and Electric (PG&E) spokesman Scott Blakey asserted. Soaring Costs Because of what has now been judged a disastrous experiment in gas and electric deregulation, both power companies are in dire financial straits. And experts believe the situation could grow more serious, plunging the entire United States into its worst energy crisis since the 1970s. Since the deregulation law was passed, utilities must now buy much of their power on the open market. However, few power plants have been built in recent years, and state officials have said that they would have to build two new power plants a year to meet the current demand. The state's larger electrical utilities, such as Southern California Edison and PG&E, have been forced to pay as much as US$1,000 per megawatt on the spot market, some reports indicated. That measure of energy usually goes for as little as $30 to $50 per megawatt. As a result, power supplies have dwindled while utility costs have gone through the roof, reaching, in some cases, a monthly high of about $3,000 per megawatt during the hottest months last summer. 'Unlike Anything We've Faced' Utility officials were reportedly blindsided by Silicon Valley's power needs, and preparing for data center power demands is unlike anything the power companies have ever confronted. "Internet data centers are a blueprint for 60 megawatts of power coming [into] service in 60 days," industry analyst William M. Smith told news sources. "That's the equivalent of a steel plant, which you can see coming a year in advance." Silicon Valley's power load could double in the next two to three years, with about 80 percent of those requests coming from Internet data centers, Silicon Valley Power's Roukeme said in published interviews. Life At Ground Zero The rolling blackouts began early Wednesday and continued throughout the day. The San Francisco Bay area was among the first regions hit. The Silicon Valley communities of San Jose and Cupertino, home of Apple Computer, were also hit by outages, news reports indicated. In Silicon Valley, the epicenter of the crisis, the power crunch is so dire that Intel CEO Craig Barrett told interviewers last week that the chip-producing giant won't build another semiconductor plant in the state until officials figure out how to keep the lights on. One such rolling blackout reportedly affected Digital Think, an application service provider (ASP) in San Francisco, last week. But a company spokesman said its IT equipment wasn't affected because its host is elsewhere. More Blackouts Expected Although power officials found a "small parcel of additional electricity" that enabled them to halt the blackouts late Wednesday, more random outages could occur on Thursday. If they come, the outages are expected to occur at around 4 p.m. PST, which is when power needs tend to peak. Wednesday's blackouts began the day after Wall Street slashed the credit ratings of the state's two largest utilities, forcing the companies to the edge of bankruptcy. That, in turn, led suppliers to withhold energy from California, state officials said. Sean Duffy of the Commonwealth Foundation, a Harrisburg, Pennsylvania-based think tank that tracks free market issues, told the NewsFactor Network that unlike other states, such as Pennsylvania, which have engaged in electricity deregulation, California did not institute permanent rate caps, which could have protected consumers against sudden price hikes. Californians Suspicious Even as California braces for another day in the dark, two newly released polls show that Golden State residents have their suspicions about the true cause of the power crunch. A poll released Thursday by the Public Policy Institute of California revealed that more than half of respondents believe the power crunch will cause "significant harm" to the state's economy. The poll also found that nearly 50 percent of Californians blame the mess on the state's failed deregulation efforts, which began in 1996. Another poll, by the Field Institute, found that Californians believe by a 57 percent to 36 percent margin that the energy crisis is an "attempt by the energy companies to force higher rates on California consumers, rather than a shortage resulting from increased demand and not enough power generation."
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