This is the sort of "triage" that Y2K preparationists were fearing in 1999. Triage of this intensity isn't surprising, since California officials realize the state is relentlessly proceeding towards bankruptcy with a virtual mathematical certainty, if serious triage is not undertaken.

Hyperlink: http://dailynews.yahoo.com/htx/ap/20010504/bs/power_breaking_point_1.html

Friday May 4 12:38 AM ET

Would Boycott Help Power Crisis?

By MICHAEL LIEDTKE, AP Business Writer

Copyright, Associated Press. Fair Use for Education and Research Only

SAN FRANCISCO (AP) - There's a limit to how much people will pay for most things in life, but if the cost scares off enough buyers, prices eventually fall.

So what would happen if this textbook example from Economics 101 were applied to California's electricity crisis? What if the state officials struggling to maintain energy supplies simply refused to buy power above a certain price and accepted more blackouts this summer?

The question would have been absurd just a few months ago and even now the notion seems surreal, given the possible consequences.

Inviting even more blackouts inevitably would hurt businesses and frustrate consumers, threatening to further depress California's already slumping economy - the sixth largest in the world.

``It's better to use (blackouts) and break the (wholesale energy) cartel than simply to suffer them,'' said Michael Shames, executive director of the Utility Consumer Action Network, a San Diego watchdog group.

Refusing to buy enough power to keep the lights on ``would be like playing with fire,'' counters Wells Fargo & Co. chief economist Sung Won Sohn.

Buying electricity at the last minute to meet the state's power needs already has cost the California government $5.7 billion in the past 3 1/2 months. The state energy bill for 2001 could reach $50 billion, money otherwise spent on education, public safety and health care, Shames said.

Faced with the prospect of a significant budget deficit, some lawmakers think it's time for California to take a stand against the power wholesalers - many of whom are based outside the state.

``We have been over a barrel in so many ways,'' said Sen. Dede Alpert, D-Coronado, who sponsored SB73x. ``Maybe there's a point in the market where (we) just say no and go with the planned blackout strategy instead.''

Economists give the bill little chance of succeeding.

The business lost during blackouts would mean more layoffs in a state already skittish over the technology downturn and the looming Hollywood writers strike, economists say.

Other ripple effects include diminished gasoline supplies, leading to even higher prices at the pump, and distribution headaches that could leave store shelves bare.

Without electricity, Manteca resident Betty Jarzemkoski said she wouldn't be able to help her ailing husband to get out of his motorized bed at home.

``It would be a real hardship for us,'' said Jarzemkoski, 78. ``I'm on a fixed income so I hope they can figure out something to bring down prices. But we need power.''

Despite such concerns, the concept of a buyer's boycott hasn't been flatly ruled out - at least publicly - by Gov. Gray Davis as he struggles to reduce the state's staggering electricity bill.

The state is spending as much as $90 million per day to meet California's electricity needs and the bleeding is sure to get worse. When the summer heat increases demand and tightens supplies, California might spend more than $1 billion each week, state officials estimate.

Extended blackouts pose an even greater cost, economists say.

When Northern California suffered rolling blackouts for several hours Jan. 18-19, the economic losses totaled $2.3 billion, mostly from lost profits and wages, estimated the Los Angeles Economic Development Corp.

Multiply that over several weeks across the entire state, and it becomes apparent why it makes more sense for California to continue buying power at inflated prices, even if leaves the state with deep debts and a ruined credit rating, economists argue.

``Politicians aren't going to willingly turn out the lights because politicians want to get re-elected,'' said Borenstein, director of the University of California's energy institute. ``As soon as people start losing their jobs because the power is off, the public will get tired of the blackouts real quick.''

-- Robert Riggs (rxr999@yahoo.com), May 05, 2001

Answers

This is the sort of "triage" that Y2K preparationists were fearing in 1999. Triage of this intensity isn't surprising, since California officials realize the state is relentlessly proceeding towards bankruptcy with a virtual mathematical certainty, if serious triage is not undertaken.

Except this has nothing to do with a non event that was suppose to come to pass a year and a half ago. And why is it only California that is affected?? Could it be.... not enough capacity???? Nah, makes just too much sense!

-- Rob McCarthy (Celtic64@mindspring.com), May 05, 2001.

if boycotting is a popular concept, there is no reason to wait for a blackout. it's up to the individual. you can start right now.

-- david moore (davidmoore01@excccite.com), May 05, 2001.