State’s economy at risk as power crunch continues

The Associated Press
Thursday June 07, 2001

CHOWCHILLA — When Tom Fry gets up in the middle of the night these days, it’s likely not for a snack or to check on his 3-year-old daughter. 

He’s probably trudging out into the dark fields surrounding his house looking to save a little money on his electricity bill. 

During those middle-of-the-night trips – sometimes two or three a night – he’s rearranging irrigation pipes so none of his fields or orchards gets more water than necessary, thereby cutting down on the need to run large pumps that gobble up expensive power. 

He’s even taken to irrigating more often at night because the evaporation rates during oppressively hot San Joaquin Valley afternoons require the pumps to work that much harder. 

“I don’t even look at my (electric) bill any more because I’m scared to,” said the fourth generation farmer. 

Consumers and businesses in California will have to dig deeper this month as a $5.7 billion electricity rate increase – designed to trigger conservation and pay skyrocketing wholesale power costs – takes effect. 

Economists say the higher bills won’t trigger a recession, but they are a step in the wrong direction for an economy that already is ailing following a dramatic slowdown in the high technology sector. 

“When you combine them with other factors affecting the state’s economy, it could become the straw that breaks the camel’s back,” said Brad Williams, senior economist in the California legislative analyst’s office. 

Williams said the rate hikes represent about 0.5 percent of California’s $1.1 trillion economy, which is larger than all but seven nations. 

About half of Southern California Edison’s 4.3 million residential and commercial customers and two-thirds of the 4.8 million served by Pacific Gas & Electric will see rate increases that average around 37 percent. Agricultural customers will pay 15 to 20 percent more under the plan. Small businesses say they will adjust to the higher electric bills, but can’t absorb much more in the way of increased energy costs. 

“Family-owned businesses, who exist on Main Street, don’t have the luxury of moving to states that are enticing business out of California,” said Martyn Hopper, state director of the National Federation of Independent Business. 

Bill Pechstedt, president of Sanford-Lussiere, which manufactures hardwood molding in Huntington Park, said he’s not worried about being less competitive with other in-state companies because of higher electric rates. 

“But we do compete with people across the country and that certainly could have an impact,” he said. “It isn’t just power. Worker’s compensation rates have gone up. Gas prices are higher. It all comes off the bottom line and it all depends on how much of a bottom line you have.” 

At Pina’s Bistro, a 24-seat Italian eatery in Tustin, 40 miles south of Los Angeles, the little extras have helped make the family-owned restaurant a success — additional plates with butter and olive oil, clean linens, crisp cloth napkins. 

But as energy costs have gone up, the extras have gone down. 

“I’m a little embarrassed by it, but I’m trying to cut down on the number of dishes I use,” said owner Pina Gruner. “During lunch, I don’t offer the bread and butter plates. You get your bread with your salad. ... It eliminates three or four loads of dishes.” 

Gruner has also reduced use of the air conditioner, changed the kitchen’s exhaust system and begun shopping for a new energy-saving stove. 

She said she has seen a slight drop in business, perhaps reflecting customers’ worries about paying their own rising energy bills. 

“They order one glass of wine instead of two. They don’t order dessert,” she said. ” A couple of days ago, we closed early. We were all standing around. It made more sense to close than stay open.” 

In Chowchilla, 35 miles northwest of Fresno, closing early isn’t really an option for Tom Fry. Striding through a chirping forest of yellow turkey chicks, he echoes the angry complaints of many of his neighbors upset about the spiraling cost of doing business in the energy-starved state. 

Farmers are, of course, intensely bitter about rising energy prices. But almost more upsetting, he says, is the amount of time invested in becoming a power expert. 

“It’s just one more thing to do in a long list of things to do,” Fry said. “I’m trying to come up with backup solutions for power outages. It takes a lot of time to get around to all this stuff when you can’t depend on electricity.” 

He’s arranged for backup generators to run cooling fans in the turkey houses in case of rolling blackouts, turns off the turkey house lights at night and the feeders during certain times of the day. He’s switched from electric to mostly diesel irrigation pumps, and devised a scheme to let gravity move water from a nearby canal into his fields rather than pumps. 

“But in about three weeks we have to start pumping 24 hours a day for a whole month,” he said. “If I only had electric pumps, it would cost about $5,000 a month.” 

That would be bad enough if the state’s agricultural economy was doing better, but in a year when all Fry’s crops will only bring break-even prices or worse, it would likely push him into debt.