Power shortages cost Silicon Valley manufacturers

The California power dearth has caught so many high tech manufacturers in Silicon Valley off guard, that their trade association held a special meeting Monday to discuss the industry�s options. While Oracle Corp, Hewlett-Packard Co., and Cisco Systems Inc. can survive a power outage with their own back-up power systems, others have still not taken steps to deal with blackouts.


Ann de Rouffignac
OGJ Online


The California power dearth has caught so many high tech manufacturers in Silicon Valley off guard, that their trade association held a special meeting Monday to discuss the industry�s options.

While Oracle Corp, Hewlett-Packard Co., and Cisco Systems Inc. can survive a power outage with their own back-up power systems, others have still not taken steps to deal with blackouts. In California, blackouts are no longer a rarity, as residents learned in June, but a continuing threat when temperatures soar.

The state�s supply of electricity generation is insufficient given the surge in economic growth and demand for power. The shortage of generation, especially during the peak hot summer months, could leave manufacturers in the heat and dark with huge monetary losses. Indeed, some Silicon Valley companies had electricity cut off on June 14, says Michelle Montague-Bruno, spokesperson for the Silicon Valley Manufacturers Group in San Jose.

�One manufacturer lost $3 million/hr,� she says. �That�s why we are very concerned.�

The organization met privately late Monday to discuss five broad issues, says Montague, including:

� Collect statistical information from members on energy use and who is using what kind of back-up generation.

� Discuss the upgrade of existing electrical generation and transmission in Silicon Valley to support growth in the area.

� Provide an information exchange among members who want back-up power.

� Identify legislation and or regulations that imposes barriers or limits to the member company�s ability to provide back-up power and disseminate information about electricity back-up systems.

� Disseminate methods of improving energy efficiency to try and check the growth in demand.

�We want to look at the short-term and long-term issues facing us,� says Montague.

Some member companies send power alerts to their employees as soon as the California Independent System Operator warns of a tight supply for that day, she says. Hewlett-Packard reportedly achieved a 50% reduction in power demand during such an alert and was able to keep all critical manufacturing systems running.

But the association doesn�t have much information about how most members have reacted to the crisis either in terms of back-up power or efforts at conservation. Montague says the meeting was intended to gather more information and serve as a forum to discuss these issues, says Montague. She would not comment on what actually took place at the meeting.

The director of the trade association said members recognize the situation as serious and are now considering moving beyond back-up generation to producing their own power.

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