Rolling whats?

Cooler-than-average weather, federal government-imposed rate controls, new power plants and grassroots energy conservation combined to relieve Californians of what last spring promised to be a very dark summer.

Service providers armed themselves to the teeth this year with redundant power supplies in anticipation of a grueling summer of rolling blackouts, and UPS manufacturers kept the artillery coming. With the much-hyped crisis season nearing its anticlimax last month, many carriers are left holding receipts and wondering how to negotiate a darkening economic scene.

With so much attention, the West Coast power panic is reminiscent of another infamous nonevent.

“Like Y2K, there was a lot of hype, but there really wasn't much there,” said Nancy Nelson, director of operational marketing for redundant power supply manufacturer MGE UPS Systems. But unlike the Y2K topic's quick demise, power issues continue to be a concern. “There still needs to be an awareness about power,” Nelson said. “We're trying to say now that there's a potential problem.”

Especially when you're providing backup systems to strapped service providers in a floundering economy.

Despite a marked reduction in California energy consumption over the past seven months (see figure), even a prolonged public conservation effort will not be enough to tame the state's ongoing demand. Jarad Carleton, IT analyst for Frost & Sullivan, said the state “dodged a bullet” this summer but may not be so lucky again. “We still do not have sufficient generation facilities to meet [our] needs,” he said.

Reduction in peak demand in California in 2001

	January	February	March	April	May	June	July	August
Expected megawatts	33,743	32,195	32,233	31,888	34,657	39,637	41,599	45,528
Actual impact megawatts	-2095	-2578	-2967	-2866	-3595	-5570	-4455	-3796
Percent reduction	-6.2%	-8.0%	-9.2%	-9.0%	-10.4%	-14.1%	-10.7%	-8.9%
Source: California Energy Commission

Angelo Mandarino, vice president of commercial sales for Invensys Powerware, agreed, saying California unfortunately must learn its lesson “quicker and sooner” than other states. The easy summer undoubtedly bought the state some time, but “if it does nothing, it will happen to them again — it's just a matter of time,” he said.

But regardless of a looming energy shortage, many service providers recently have been forced to reprioritize spending, which could make for shaky ground for UPS manufacturers. Frost & Sullivan's Carleton, confirming that UPS sales are still steady despite the soft economy, said most California carriers still consider themselves in the midst of an energy crisis: “Those that don't have simply chosen to bury their heads in the sand and pretend there is not a problem. Any carrier conducting business in the state of California with that attitude is putting their customers and their business in jeopardy,” he added.

Likewise, equipment vendors insist they are not concerned about the economy's effects on UPS sales — that even the most “bulletproof” hosting centers demand power backup supplies.

“Our customers are going to buy no matter what the local power situation is,” Mandarino said. “Any kind of system has a requirement for power backup.”

But Mandarino did say his company is working much harder than last year. “We are trying to be as proactive as possible to promote ourselves and our products through different avenues,” he said.

Vendors such as MGE and Invensys are pulling out the stops to keep power in the forefront of carriers' minds in a distracting economic climate. MGE's “Bring on the Blackouts” campaign may be ill-named and questionably timed — its centerpiece product, the Comet EXtreme UPS, launched in late August — but it represents an ongoing effort to market products with critical applications redundancy to service provider customers — with one obvious exception.

“[Invensys has] done better than most because we rely less on dotcoms [for sales],” Mandarino said. “We never stop calling on certain customer segments, but most certainly we're not calling on the same percentage of dotcoms as we did before.”

If and when California gets its power supply stabilized, Carleton said, the state's data centers are still threatened by a “unique set of possible scenarios” — from earthquakes and floods to mudslides, fires and riots. And in light of the events of Sept. 11, terrorist attacks may be added to the list.

“If power plants were targeted by unscrupulous individuals, business across the state could come to a halt,” he said. “Fortunately, most data center operators have developed plans to remain operating despite… natural disasters, so they are better prepared than many businesses to make it through any potential power plant losses.”