AKRON (Jan. 31, 2001)—It´s awfully tough to operate a business when you don´t know the day or hour a power outage may strike.
As California attempts to solve a chronic, growing energy crisis of power shortages and rolling blackouts, the state´s tire dealers are trying to maintain a business-as-usual mindset.
But dealers in the northern half of the state—where blackouts primarily have hit Silicon Valley, Sacramento and the Bay Area—are wondering just when the lights may go out...again.
"It´s not a lot of fun," said Richard Howard, owner of Bruce´s Tire Inc. in Fremont. He was sitting at his computer typing in a tire order Jan. 18 when, at about 10:10 a.m., the computer shut down and the store went dark.
The dealership´s employees immediately stopped any automotive work they were doing at that moment to fire up an air compressor and use a battery-operated wheel balancer to change flat tires in the dark, Mr. Howard told Tire Business.
"It (wasn´t) the most productive hour, that´s for sure," he said, noting that the lights came back on at 11:25 a.m. Luckily, he hadn´t lost any data on his computer because everything was backed up.
All customers at Bruce´s Tire that day patiently waited until the dealership finished working on their cars after the blackout, he said. They joined people at other stricken businesses in the area to "hang out in the street for an hour" and kill some time.
Despite the down time, Mr. Howard did not extend hours at his Fremont store or at his Oakland store, which also experienced an outage on the same day. His other three stores in Northern California were not impacted by a blackout.
Joe Leung, manager of a Discount Tire Co. store in San Carlos, said his customers also were, for the most part, very understanding when the lights went out in his store Jan. 17. But he still lost about five customers because he couldn´t promise them a completion time for their vehicles.
Mr. Leung and his employees listened to updates on the energy crisis on a battery-operated radio. The hour and a half wait for Pacific Gas & Electric Co. (PG&E) to restore power was long, he said, but "what can you do? It´s not something within our control."
California´s recent energy emergency is rooted in soaring demand for power that outpaces supply. The state has not built new power plants in the last decade even though wholesale prices for electricity have surged since the California legislature voted to deregulate the market in 1996.
At the same time, California´s largest utilities—PG&E and Southern California Edison—have had caps placed on the rates they could charge customers. Both utilities are struggling to pay their suppliers and are teetering on the verge of bankruptcy.
To make matters even worse, experts say the Golden State, like the rest of the nation, is facing an impending natural gas crisis as prices of that fuel continue to skyrocket while suppliers scramble to keep up with increased demand brought on by a colder-than-expected winter.
The rolling blackouts have occurred sporadically in neighborhoods. Just a mile down the road from Mr. Leung´s Discount Tire store in San Carlos, an AJKL Inc. Tire Centers location remained untouched by the Jan. 17 outage that darkened Discount Tire, according to service manager Jim Gutierrez.
David Liss, manager of a Winston Tire store in San Jose, said the 90-minute blackout Jan. 18 gave his crew time to do some needed cleaning of the shop. The store also didn´t lose any computer data, but Mr. Liss joked that if a blackout threat continues to loom daily he may have to dust off the cob webs from an old, non-electric credit card machine in storage to service some of his customers.
Though blackouts have not yet hit Southern California, tire retailers there, like their northern counterparts, are trying to conserve energy whenever possible and are bracing for higher electric bills next month.
Performance Plus Tires in Torrance not only is expecting energy increases but also higher prices from custom wheel manufacturers as a result, according to owner David Fox. He said wheel makers´ energy costs have risen dramatically because they run their plants 24 hours per day.
"One (custom wheel maker) told me there´s a $100,000 a month swing just in energy costs. They´ll be passing that along," Mr. Fox said.
If necessary, Mr. Fox said he would consider passing along the extra costs from energy price hikes to his customers in the long run because his dealership works on "short margins as it is." So even a 6-percent increase in business costs would be enough to cause worry.
Paul Bobzin, president of La CaÃ±ada Tire, said he no longer keeps the dealership´s flood lights on at night. He said people in the Los Angeles area have predicted as much as a 50-percent surge in electric bills, a prospect that frustrates him.
"Over the last two years, our rates have gone down, and our rates are not that expensive," Mr. Bobzin said. "Now, all of a sudden, there´s this crisis. Why is this happening?´´
Lakewood-based Allen Tire Co. is preparing for blackouts in Southern California by extending the backup capabilities for its Unix-based computer system, said President Fred Allen.
Mr. Allen also expressed reluctance at the idea of raising his tire and service prices to offset rising energy costs.
"I don´t think we´d be able to do that," he said. "Los Angeles is a pretty competitive tire market. It´s difficult enough to pass through the manufacturers´ increases let alone energy costs."