Net blamed as crisis roils California

Computerworld - The high cost of deregulation may be bringing California's two largest electric utilities to the brink of bankruptcy, but the growth of the Internet is also to blame for the rapid destabilization of the nation's electric power infrastructure.

So concluded a premier agency of the electric power industry and officials at some utilities, who cited a huge increase in demand in areas where Internet hubs and data centers have come online in the past few years. In the heart of Silicon Valley, for example, power demands skyrocketed by 12% last year, while the rest of the state saw an overall increase of 2% to 3%, said John Roukeme, a spokesman for Silicon Valley Power, the municipal utility for the city of Santa Clara, Calif.

"A single [Internet] data center - and we have many in the area - can easily consume more power than the largest manufacturing plant we serve," Roukeme said.

Southern California Edison, a division of Edison International in Rosemead, Calif., and Pacific Gas and Electric Co., a subsidiary of PG&E Corp. in San Francisco, have been forced to buy power normally priced at $30 to $50 per megawatt for as much as $1,000 per megawatt on the spot market. Both companies, especially PG&E, are in a financial crisis.

But PG&E spokesman Scott Blakey said the state's power need is more dire. "If we don't get juice in here and the ability to move it around, we're going to be in trouble," he said.

The situation has become so desperate in the region that Intel Corp. CEO Craig Barrett said last week that his company wouldn't build another semiconductor plant in the state until it's resolved.

Utilities have cut power to consumers and businesses on short notice in predetermined areas. One such so-called rolling blackout affected Digital Think, an application service provider in San Francisco, last week, but its IT equipment wasn't affected because it's hosted by Exodus Communications, said Kevin Cornish, IT director.

Internet data centers contacted for this story said they haven't been affected so far. The reason, said Chris Hardin, director of Santa Clara operations at Exodus Communications Inc., is that companies sign contracts that call for power companies to deliver electricity that the customer must pay for even if it doesn't use it.

"It's like a lunch. If you order it and don't like it, you're going to pay for it anyway," Hardin said. But he noted that to ensure power for its customers, Exodus is looking at options such as local power generation.

Preparing for data center power demands is unlike anything utilities have faced. "Internet data centers are a blueprint for 60 megawatts of power coming [into] service in 60 days. That's the equivalent of a steel plant, which you can see coming a year in advance," said William M. Smith, manager of market-driven load management at EPRI, the electric utility industry's research arm.