Processors lament unstable power By J.N. SBRANTI BEE STAFF WRITER (Published: Monday, January 29, 2001)

For 100 hours, the carrots and broccoli had to wait.

January's power failures repeatedly shut down production lines at Patterson Frozen Foods. Without electricity, vegetables can't be processed.

In fact, it's tough to process much of anything -- rubber, plastics, chocolate -- without power. So you'd better believe manufacturers are obsessing over California's energy crisis.

And companies that had been considering moving to the state now are rethinking their plans.

"I can't imagine anyone in industry wanting to locate in California right now," said Chris Reardon, executive director of the Manufacturers Council of the Central Valley. "The existing environment doesn't bode well for our economy."

Power problems are making it extremely tough to attract new businesses to the Northern San Joaquin Valley.

"Not only is this energy crisis our largest economic challenge, it is a media nightmare," said Charline Speck, president of the Stanislaus County Economic Development Corp.

Nightly newscasts, she said, make it sound as if California is in a perpetual blackout.

Things haven't been quite that bad at Patterson Frozen Foods, but at times it has come close. During the first three weeks of January, Pacific Gas & Electric Co. shut off the food processor's electricity for a total of 100 hours.

The blackouts lasted up to 18 hours at a time, said Paul Fanelli, vice president of human resources for Patterson Frozen Foods, which annually employs an average of 650 people. The company had volunteered to have its power interrupted in trade for lower electric rates, but it hadn't expected so many failures so close together.

Complicating the electricity shortage are soaring natural-gas prices.

Fanelli said his company's gas costs have tripled in the past year. That's a huge expense because natural gas is burned to heat the boilers that cook the food.

"You cannot pass this increased energy cost onto consumers," Fanelli said, "because we compete in a global market."

That global market means San Joaquin Valley's manufacturers are closely scrutinizing how their energy bills compare with those paid by competitors around the world.

"If things continue this way, we're in trouble," warned Elaine Trevino, who heads the Merced County Economic Development Corp.

Trevino recently polled 12 of her county's largest employers, and several of them -- particularly the food processors -- expressed extreme concern about the cost and reliability of power.

"Most food processors are holding their breath," agreed Reardon from the manufacturers council. He said electricity failures and gas-price spikes this summer could be disastrous. "Can you imagine all that raw fruit sitting out in the open sun not able to be processed?"

Such visions haunt company executives, especially those who are debating where to locate their next facility.

"When you're making multimillion-dollar investment decisions, you want to know that key resources are going to be available to you," said Mike Locke of the San Joaquin Partnership, which promotes economic development in San Joaquin County. "Corporations want long-term stability."

Since California's power supply is anything but stable, promoting new development here has become a tricky task.

Speck, for example, has been negotiating with a "big plastics manufacturer" that is considering moving to Stanislaus County.

"We're bracing ourselves for a phone call," said Speck, who fears those plastic-manufacturing jobs will end up out of state.

Locke, meanwhile, is trying to stay optimistic about the state and the valley's future.

"California is the seventh-largest world economy, and it will not find itself without energy resources," Locke insisted. "We will find the solutions. The difficulty will be during the next 24 to 36 months."

It's expected to take about that long for new power sources to go into operation.

Until then, Fanelli said, it definitely "will not be business as usual."

http://www.modbee.com/metro/story/0,1113,234426,00.html

-- Martin Thompson (mthom1927@aol.com), January 29, 2001