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Power Crisis: Rolling Blackouts Continue in Northern CaliforniaAired January 18, 2001 - 4:19 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Well, the lights are out again for tens of thousands of people in the nation's most populous state: the latest now on the deepening power crisis in California.
For the second straight day, regulators have ordered rolling blackouts in Northern California. About one million customers are affected. California Governor Gray Davis has signed an emergency order allowing the state to spend millions of dollars to try to keep the power on. There were some tense moments during yesterday's rolling blackouts. Some people had to be rescued from elevators that stopped working when the power was shut off. We're going to take a closer look at two areas affected by the crisis.
First, CNN's Greg Lefevre, who is in San Francisco, where the rolling blackouts have struck again -- Greg, what's the latest?
GREG LEFEVRE, CNN CORRESPONDENT: Well, Kyra, the very latest: Just a couple of minute ago, the ISO -- the state's electrical authority -- ordered the power back, that this morning's blackouts had, for the moment, eased.
And so what has happened now is Pacific Gas and Electric is gradually putting its last blackout customers back online. Here at Fisherman's Wharf, the lights were supposed to go out first this morning. But they did not. These folks dodged that electric bullet, if you will. But those crab-cookers are still going right now. And you know how important that is here at Fisherman's Wharf.
Now, as the day wore on this morning, we found that areas around Fisherman's Wharf, areas South of Market in San Francisco -- the dot.com neighborhood, if you will -- and suburbs, like Daly City were all affected. In all, some 400,000 customers were darkened in the first wave of blackouts. The second wave came early just before noon. And that involved about 200,000 customers. Then, just a few minutes ago, the state's ISO, the electrical authority here in California, said that phase of the emergency has passed. Those people can come back on.
Now, the critical question will come later on today in a few more hours when the evening commute begins, when offices are still running and homes begin to heat up again. That will be another critical moment. And there is a severe danger of possible blackouts then -- Kyra, back to you. PHILLIPS: Greg, out of curiosity, with these businesses having to shut down, has there been any type of economic impact thus far?
LEFEVRE: For some of those businesses, it's really been nasty. When the rolling blackouts occur, it's an hour to an hour-and-a-half. So that might be an inconvenience. But yesterday's blackouts came right during the lunch hour. So if you are running a deli or a small restaurant, that is a lot of your business during the day.
I talked to my baker this morning --the place where I get doughnuts on the way to work -- don't tell my wife -- and he said that the last time he had a blackout, it was $16,000 in lost goods, time to restart his business, and having to send employees home, pay them, but not get any work out of them. So it does have an effect.
PHILLIPS: Greg Lefevre, thanks so much. We'll get some doughnuts to you.
Well, what caused these power problems in California? Many people say deregulation is to blame. CNN environment correspondent Natalie Pawelski joins with us now with answers, a little more of an in-depth look.
NATALIE PAWELSKI, CNN ENVIRONMENT CORRESPONDENT: Hi, Kyra.
PAWELSKI: Well, when deregulation first started, the theory was pure free market capitalism. By deregulating the industry and by allowing competition, the theory went, you would get all sorts of innovations. And for customers, that was supposed to mean better service and lower bills.
(voice-over): A few years back, electricity-marketers trumpeted deregulation, promising a bright new era of competition.
UNIDENTIFIED MALE: I can promise you this: Consumers are better off if they have a choice.
PAWELSKI: California consumers, who got that choice along with rolling blackouts might disagree.
UNIDENTIFIED MALE: The thumbnail explanation in California is the fact they were the first state to deregulate. And so, from a practical standpoint, they had no one to go to school on.
PAWELSKI: California faces record demand for electricity in a state that's built no new generating plants in a decade. Prices for natural gas, which most California electric plants burn to produce electricity, have soared over the past year. The power industry says California's unfortunate situation is unique. The crisis there cannot happen elsewhere. But some independent observers disagree.
UNIDENTIFIED MALE: While the situation is isn't as bad here in the northeast, there's the potential that it could replicate what's happening in California; particularly New York City.
PAWELSKI: About half the other states have introduced electric competition and deregulation is going more smoothly in all of them. But thanks to California, a push for national deregulation has stalled.
PAWELSKI: Now some critics of deregulation say that competition has attracted a lot of companies a lot more interested in short-term profits than in the long-term security of our energy supply, Kyra.
PHILLIPS: So Natalie, why not build more power plants?
PAWELSKI: Part of it is the NIMBY question, the not in my backyard question. Nobody wants a power plant or electric lines going through their backyard. In places like California, it's especially difficult because the environmental regulations are pretty strict. These things are very hard to cite.
PHILLIPS: OK, so -- for, specifically, my family who is in California -- what could they start doing tomorrow to help prevent a situation like this happening again?
PAWELSKI: It could make you feel a little powerless, the situation.
But one thing you can do is try to conserve your power use. If you are in an electrically heated house, try to keep it down a few degrees, turn off the lights, try to use compact fluorescents which use a lot less power; the very basic Conservation Strategies 102. If everybody did this a little bit, it can make a difference across the breadth of the whole state.
PHILLIPS: Could we foresee any type of regulatory mess like this, say, in other states?
PAWELSKI: To a degree, Kyra. There's about half the states deregulated to some degree. Each one has come up with its own rules of the road. None are exactly like California, but it seems that deregulation works best when there is extra power around. The problem comes when there is not quite enough. And some power experts say that could happen in other parts of the country.
PHILLIPS: Natalie Pawelski, thank you very much.
President-elect Bush said today that he hopes to help California. He did not mention federal money, but in an interview with CNN's Candy Crowley, Bush spoke of relaxing environmental restrictions to help the state produce more power.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT-ELECT OF THE UNITED STATES: If there's any environmental regulations, for example, that's preventing California from having 100 percent max output from their plants, like I understand there may be, then we need to relax those regulations. California has a faulty law on its books, and it needs to correct it.
Secondly, the situation in California underlies what I was saying in the course of the campaign: we have an energy problem. And although we need to promote conservation, the best way to make sure we have energy independence is to encourage more exploration.
(END VIDEO CLIP)
PHILLIPS: CNN will air that interview in its entirety during "CNN TONIGHT," which begins this evening at 10:00 p.m. Eastern, 7:00 Pacific.
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