California’s power crunch has meant a cycle of interruption notices, power cutbacks and work stoppages for Jody Callahan and some 150 workers at Astech Manufacturing Inc. in Santa Ana.
For much of last month, Callahan, director of operations for the aerospace products maker, arrived for the plant’s 6:15 a.m. shift only to be foiled by an alarm signaling a power interruption from Southern California Edison.
Like other Orange County businesses, Astech had been part of a voluntary program in which the company agreed to have power cut in times of shortage in exchange for lower electricity rates. Trouble is, shortages are all there have been this year.
Callahan and others breathed a big sigh of relief when the California Public Utilities Commission halted the interruptible program on Jan. 26. Like others, Astech has paid big fines for using power during the interruptible periods.
But the reprieve for Astech and other OC businesses could be fleeting. The state’s power crunch is set to worsen this summer,when plants such as Astech’s require about a quarter more power than in winter. Instead of arranged interruptions, companies could face rolling blackouts or even prolonged outages.
“Now we’re left to worry about the summer and how we’re going to meet the demands,” Callahan said.
The good news is the state’s power crunch is set to ease as new plants come on line, according to a December report by McGraw-Hill Cos.
California should benefit from “a steady stream of power projects under development,” giving the state “reasonable supplies in the years ahead,” the report said.
The bad news is that years may be the key word here.
The idea of additional power plants immediately coming to the state’s rescue is unrealistic, said Robert J. Michaels, a professor in California State University, Fullerton’s Department of Economics. Be ready for a long, hot summer, he said.
As it is, six new power plants are in various stages of construction with only two set to be up and running this year,by the end of August. That’s too late to keep businesses from suffering down time in June and July.
And while the plants are set to kick in during the hottest months, they won’t be enough to offset California’s shortage, according to Michaels.
In energy speak, “That’s not enough new plants ready and built for load growth,” he said.
New plants generally take 18 months to build with an additional three to five years spent waiting for approval due to California’s environmental regulations, Michaels said.
Other factors paint a dim view for the summer.
Each year, California imports around 25% of its power from other states. But Nevada and Arizona are going to need whatever power they can generate to deal with soaring temperatures. And a traditional summer power source for California,hydroelectric plants in the mild Pacific Northwest,may not be up to par this year because of low snow and rainfall.
“The Pacific Northwest is having a bad water year,” Michaels said.
Still, not all projections for summer are as gloomy.
Buck Johns, a Newport Beach development consultant for power plant builders, said he believes many of the state’s problems stand to be addressed by legislation signed by Gov. Gray Davis last week. The $10 billion plan puts California into the power-buying business.
Johns said he expects the state and energy producers to agree on long-term pacts that will avert a meltdown, at the price of Californians paying some sort of premium for their energy for a few years.
“But it keeps the lights on,” he said.
How companies have dealt with recent power interruptions could provide a glimpse of how businesses may cope with potential rolling blackouts this summer.
During interruptions at Astech, Callahan said he has given employees extended breaks, telling then to return when the power came back on. The employees still were paid for the time, adding to Astech’s costs of dealing with the power crunch.
On one occasion, Callahan sent employees on break but the power never came back on.
“I told them all to take a vacation day, take a sick day, take a personal day, whatever, then come back on Friday, ready to work,” he said.
In other cases, Astech has kept running through the interruptible period, piling up as much as $70,000 a day in fines.
“We knew we couldn’t keep putting off work,” Callahan said. “But we can’t pay those fines for long either.”
Of course, during rolling blackouts companies won’t have the option of still using power, even at an exacting premium. So Callahan said he’s looking at other options for summer.
“We’re developing alternative plans as we go along,” he said. “We’re constantly looking at alternative energy sources.”
Astech is inquiring about diesel generators or MicroTurbines from Chatsworth-based Capstone Turbine Co.
But the installation of generators is limited by air quality regulations. And while MicroTurbines are easier to install and operate, they may not be so easy to get.
“Unfortunately, lots of other companies are doing the same thing. So there’s a shortage of generators available,” Callahan said.
Otherwise, Astech has tried to adapt. The company, which produces engine nozzles, acoustic structures and other gear for commercial and military aircraft, has been running night and weekend shifts.
One thing Astech won’t do is move away, according to Callahan.
“We’ve been at this location for over 30 years,” he said. “Our business is very capital intensive. We can’t just pick up and move.”
Night shifts may help Astech through summer, Callahan said. But that, too, comes at a cost, he said.
“It’s difficult to ask employees to do that,” Callahan said. “It’s not just a matter of asking employees to change the hours they work. It’s asking them to change their lives around.”
With office staff continuing to work days and manufacturers working nights, Astech’s been losing efficiency, Callahan said.
All the while, Callahan said he is scratching his head and asking if things are this bad in winter, what will summer be like.
“Last summer we worked at 43,000 megawatts,” Callahan said. “During the winter, we’re using 32,000 megawatts. Simple math shows you the problem.”
Just as Astech is working at night to take advantage of power supplies during off periods, Callahan said he’s already planning a summer strategy.
“In the summer months, the interruptions come in the afternoons, when people come home from school or work and turn on the air conditioners,” he said. “We plan to finish our shift before they come home.” n
