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CNN Sunday Morning
California's Power Problems Disrupt Business
Aired April 08, 2001 - 08:31 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BRIAN NELSON, CNN ANCHOR: California Governor Gray Davis now concedes the need for a rate increase in a state that is struggling to supply its citizens enough power. On Friday, one of the state's largest power suppliers, Pacific Gas & Electric, filed for bankruptcy. Davis was reportedly taken by surprise by the bankruptcy announcement and it points out the potential threat to wide sections of the California economy and to the nation.
CNN's Hena Cuevas reports on that angle from Los Angeles.
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HENA CUEVAS, CNN CORRESPONDENT (voice-over): Integrated Micromachines had just moved into its new plant when it suffered through its first rolling blackout.
ART HUSKEY, INTEGRATED MICROMACHINES: We thought we were pretty safe here. We saw a lot of power problems up in the Bay Area and Silicon Valley and I didn't expect it to hit here.
CUEVAS: The semiconductor maker not only lost most of its product that day, it also put its employees at risk.
HUSKEY: When the power goes down, those fume scrubbers stop working and that puts the chemicals in the same room with the operators.
CUEVAS: The company gets its power from one of the two largest utilities in the state, Southern California Edison. On Friday, the other big provider, Pacific Gas & Electric, filed for bankruptcy protection.
(on camera): It's this uncertainty about blackouts, high electricity prices and utilities filing for bankruptcy that has some economists worried about the state's ability to attract new business.
CHARLES THORNBERG, ECONOMIST: If you're sort of on the edge thinking about California as a location versus, say, Wyoming or Washington or Oregon, that may be enough to tip you off. So that may, in fact, deter businesses from investing here.
CUEVAS (voice-over): Minnesota is already taking advantage of California's weakness with this billboard touting the state's solid electricity supply. But experts say California is not alone. This summer, energy shortages are expected nationwide.
TOM LEISER, UCLA ECONOMIST: We may see this problem spread. Probably other states won't see California's same impact as soon, but it's really a national problem.
CUEVAS: National or not, Integrated Micromachines says growth for them in California is not an option.
HUSKY: We've been looking for a 10 acre site to expand to and expand the facility that you see here and I'd be hard pressed to put that in southern -- in any place in California.
CUEVAS: Sweet words for other states waiting with their arms wide open.
Hena Cuevas, CNN, Los Angeles.
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