California generating ill will, not sympathy

By M.S. Enkoji and Dale Kasler Bee Staff Writers

(Published Jan. 27, 2001)

VANCOUVER, Wash. -- The pain is spreading across state lines.

California's electricity crisis is jolting the West, helping bankrupt an aluminum plant in Vancouver, forcing up utility bills 50 percent in Tacoma, and even jeopardizing 2,350 copper miners' jobs in Arizona and New Mexico.

Recent loan defaults by Pacific Gas and Electric Co. and Southern California Edison are creating anxiety for bondholders all over the nation, but most of the immediate economic problems seem to lie in the Pacific Northwest.

The region is accustomed to inexpensive hydroelectric power. Yet the lack of rain and snow this winter has dried up many hydro plants and forced utilities in Oregon and Washington to shop for electricity on the spot market -- only to find much of the power being sold, at exorbitant prices, into California's voracious power grid.

"The higher prices in California draws the power here," said analyst Kathy Mock at Standard & Poor's Corp. in San Francisco. "Why sell it in Washington for half the price you can get in California?"

Making matters worse: Normally, California ships electricity to the Northwest during the winter. Now, California's a buyer.

The result: Major rate hikes all over the Northwest. Mock said four big municipal utilities have passed rate hikes ranging from 10 percent in Seattle to 50 percent in Tacoma. More are in the works. The federal Bonneville Power Administration, which delivers wholesale electricity to the region, is expected to raise its rates about 30 percent, Mock said.

Annoyance with California's messed-up energy system is starting to boil over in places like Vancouver, where the municipal utility boosted rates 20 percent and expects to raise them again soon.

"There's a concern that California might take what we have," said Wanda Stephens, 56, as she dined in downtown Vancouver. Stephens has been turning down the heat and buttoning up the long underwear to cope.

At the municipal utility office, spokesman Mick Shutt showed a irate ratepayer's letter. The customer vows not to pay higher rates just so Californians can heat hot tubs and swimming pools, and run air conditioners and "all their computerized crap."

"It's clearly not a good situation," Shutt said.

Rising power prices had forced what was to be a temporary, summer shutdown at Vanalco Inc., an aluminum smelter that's been a Vancouver fixture since 1940.

The company limped through the fall, figuring "when the air conditioning got turned off, things would return back to normal," said vice president Chuck Reali.

But rates continued to soar and the company filed for bankruptcy Jan. 10. Nearly 650 jobs are gone. "There's a lot of resentment (against California) in Oregon, Washington, Idaho, Montana," Reali said. "Hell yes, absolutely."

A wood-pulp plant in Bellingham, Wash., shut down temporarily because of high electricity costs. So did a chemical fertilizer plant in St. Helens, Ore.

"You're hearing, 'Wait a minute, this is California's problem,' " said economist John Mitchell of U.S. Bancorp in Portland. "People are saying, 'We're not going to be energy farms for California,' that kind of thing."

"When California coughs, the Northwest breaks a rib," said Ed Mosey, spokesman for the Bonneville Power Administration.

To be sure, Californians haven't been spared misery by the energy problems. Natural gas expenses have driven up Californians' bills, and customers of PG&E and Edison have been handed 10 percent emergency rate increases.

Rolling blackouts -- and the imposition of shutdowns on customers with "interruptible" contracts -- led to temporary closures of a variety of California businesses, from the SierraPine Ltd. fiberboard plant in Rocklin to a Miller Brewing Co. plant near Los Angeles. Miller laid off 160 workers and moved production out of state, with no guarantees the work would return, said Gino DiCaro of the California Manufacturers & Technology Association.

But those problems draw little sympathy from out-of-staters, many of whom need little prodding to criticize California. "We have to blame you folks for everything," said Rod Prokop, a spokesman or copper giant Phelps Dodge Corp.

He was joking, but the situation at Phelps Dodge has turned serious. The company notified 2,350 miners in Arizona and New Mexico that they could face layoffs soon because of the energy plight.

The company, which buys about a quarter of its electricity on the spot market, saw its power bill jump 65 percent in the fourth quarter, Prokop said.

"This situation in California is absolutely killing us," Phelps Dodge Chief Executive J. Steven Whisler told investment analysts.

Despite the finger-pointing at California, many experts say there's a shortage of generating capacity across the West.

"You hear Nevadans say, 'We don't want to send our electricity to California,' but that's just as silly as saying California shouldn't sell gasoline to Nevada," said Newport Beach energy consultant Philip Verleger, noting that Nevada depends on California for gas supplies.

Bee news services contributed to this report.

-- Swissrose (cellier@azstarnet.com), January 27, 2001

Answers

I'm a senior citizen living in Spokane, WA, and I have seen my AVERAGED monthly utilities bill go from $40.00 in November to $64.00 in December to $75.00 in January. I'm on a fixed income and keep my thermostat at 60 degrees. I use Aladin lamps in the evening and am writing this by candle light. There's not too much more that I can do to conserve...thanks so much, California!! As to where the extra money to pay my utilities bill will come from, God only knows.

-- Pat Rodgers (psrodgers@msn.com), January 28, 2001.

To Mrs. Rodgers: Ma'am, I am going to offer this suggestion in the hopes that it will help you. (My parents are also on a fixed income.) While out camping in my college days, I discovered a neat way to keep warm at night WITHOUT utilities. It involves one or two-- $3 "space blankets" combined with the usual blankets & grandma's homemade quilt.

Basically, you spread out grandma's quilt then the regular blanket. Then spread out the space blanket, then a thermal blanket over that. If you're single/widowed, just fold this contraption in half. Then sandwich yourself between the layers of the thermal blanket.

If you're married, spread out a space blanket and then a thermal blanket. Spread out another thermal blanket and put the SECOND space blanket on top of that. Then spread the regular blanket and grandma's quilt over that. Sandwich yourself between the layers of thermal blankets.

There may be a skim of ice on the inside of the windows in the morning, but I guarantee you'll sleep toasty warm. I once woke up (under a cheap tarp) to a blanket of snow and never knew it!

-- Boondocks (maboulden@gilanet.com), January 29, 2001.