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Silicon Valley Copes With California Power Crisis - 2001-08-07


California's high-tech region of Silicon Valley has suffered two setbacks in the past year. Many Internet companies have collapsed, and an energy crisis threatens to cut the power that fuels high-tech industries. VOA's Mike O'Sullivan paid a visit to Silicon Valley to see how the region is fairing.

People in Silicon Valley say accounts of the region's demise are highly exaggerated. While the highways leading to San Jose are less crowded after the failure of Internet firms like Webvan, a grocery delivery service, many computer-related businesses are still earning a profit.

But one Silicon Valley observer sees less arrogance here today. Bert Robinson is city editor of the San Jose Mercury News. "One of my favorite phrases that you used to hear a year and a half ago was that people who were outside the Valley just didn't 'get it,' " he says. "'Get it' was our big thing. You know, [people would say] we here in the Valley understand the way the American economy was going, the way the world economy was going. High tech was going to trump everything. We were going to reinvent the way people shop, the way people drive, the way people live."

Mr. Robinson notes that didn't happen. Instead, hundreds of Internet firms collapsed in California. Other high-tech firms are struggling in a weak economy.

After so-called "rolling blackouts" hit Northern California in June, 2000, the temporary power cuts gave Silicon Valley an added sense of vulnerability. They also fostered a spirit of cooperation. John Roukema is assistant director of Silicon Valley Power, an electrical utility in the city of Santa Clara. "In response to the first rolling blackouts that we had here, we got together with our major customers and put together a power-reduction pool," says Mr. Roukema. "In this pool, they voluntarily reduced at least ten percent of their load. In return, we protect their critical circuits from rolling blackouts."

One of those customers is Intel Corporation, which makes 70 percent of the world's microprocessors. The company achieved the reduction through various kinds of conservation, according to Bill Milam, senior electrical engineer at Intel headquarters. "The most obvious is the reduction of our lighting. The second is the adjustment of our temperature settings in the building," he says. "By doing this, the heating and ventilation systems don't have to work nearly as hard. The pumping systems that cool the building aren't operating nearly as much. "

Intel has also installed low-energy lighting fixtures and controls that turn off the lights when no one is present.

Carl Guardino is president of the Silicon Valley Manufacturing Group, an association of high-tech businesses. He is also one of five members of the governing board of the agency that oversees California's power system. Mr. Guardino calls reliable power a "bedrock issue" for Silicon Valley. "You need six nine's reliability of power - 99.9999 percent reliability in order to run the sophisticated assembly lines and manufacturing facilities that we have here," he explains. "Without that, you lose everything on that assembly line when you have a rolling blackout. It takes hours or days to retool that sophisticated equipment."

The collective cost of a blackout for Silicon Valley's high-tech industries is in billions of dollars. But there have been no rolling blackouts in Silicon Valley so far this year. While other parts of California have experienced power cuts, Silicon Valley has been spared them because of conservation efforts. Leslie Parks is the former chief of economic development for the city of San Jose. Today she is a private consultant, helping coordinate a campaign to convince the rest of the nation that California is solving its energy problems.

"We know that there are other regions of the world and the United States that are currently experiencing a shortage of power, maybe because of different reasons, acts of nature, whatever," she says. "There are many different regions that are starting to deal with these issues. And the good news is that California was there first and will come up with some great solutions and will be happy to share them with the rest of the people."

California officials say the primary solution to the state's energy crisis is to get more power plants on line. That is starting happening this summer, as a succession of new plants is increasing the state's electrical capacity by 2500 megawatts, enough to power more than two million households. With additional plants that are now being planned, the officials say California should have an energy surplus by 2003.

But Carl Guardino of the Silicon Valley Manufacturing Group warns more trouble may be coming. He says his association identified the current power shortage even before the first electrical blackout struck the region. He says the association now foresees another problem a shortage of water - as California continues to grow with an aging infrastructure.

Photos by VOA's Mike O'Sullivan