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Blackouts worry agricultural producers

Posted at 4:41 p.m. PDT Wednesday, April 11, 2001, BY ANDREW LAMAR

Knight Ridder Newspapers

SACRAMENTO, Calif. -- Blackouts and higher electricity costs could boost prices of California's agricultural products by billions of dollars and make the industry vulnerable to global competition, agriculture representatives told a congressional panel this week.

Blackouts can knock food processing plants out of service for up to 36 hours because they must shut down, dispose of destroyed product and cleanse all their equipment before starting up again, said Ed Yates, the senior vice president of the California League of Food Processors.

Such an interruption during harvest season can prove especially costly because processors count on operating long hours to move as much product as possible, Yates said. Furthermore, proposed rate hikes that would increase rates for processors by five times during summer peak usage would dramatically push up prices.

``Food processors I describe this way: `We are in a stainless steel jacket,' `` Yates said. He asked that the state ease clean air restrictions so processors could run generators at full tilt and regulators give food processors the same standing as energy generators in acquiring natural gas.

Yates was one of 11 people who testified before a subcommittee of the U.S. House of Representatives Committee on Government Reform Tuesday. The committee held the first of three field hearings scheduled this week in California at the Sacramento Convention Center.

The lawmakers are exploring the state's energy crisis and how to respond to it. The hearings continued Wednesday in San Jose and Thursday in San Diego. California is the largest agricultural producer in the United States, providing one-eighth the nation's product. Total 1998 receipts from California farming products totaled near $25 billion.

Peter Verboom, a Glenn County dairyman, told about the rippling effects of a power outage. During a blackout, Verboom cannot use cow milking machines and the company he supplies cannot process the milk he's shipping to it, so he is forced to dump his milk, something that could contaminate groundwater supplies and result in fines.``It's a problem that just feeds on itself all the way down the line,'' Verboom said.

In other testimony on Tuesday, a representative of the Federal Energy Regulatory Commission said the agency could not order refunds for a large portion of the $6.2 billion the managers of the state's power grid say are the result of being overcharged by generators. FERC does not have authority over municipal utility districts and certain other areas the figures are drawn from, said Kevin Madden, general counsel for the agency.

-- Swissrose (cellier3@mindspring.com), April 11, 2001