Utilities take heat: Boy, talk about your bad breaks. Among the one percent of DWP customers who have been without power is none other than LAT columnist Steve Lopez, who offered up a first person account in this morning's paper. At least we know the utility isn't playing favorites; Lopez was on the horn with both David Nahai, president of the DWP Board, and L.A. City Councilman Eric Garcetti - and still he was without juice as of 9 p.m. last night. The outages were scattered all over Socal and seem to involve mostly localized problems, like fried transformers. An LAT Q&A provides some explanations.
Why is the power failing?
The simplest answer is persistent, high nighttime temperatures. Southern California systems are designed to handle high daytime temperatures, then cool down at night when customers switch off their air conditioners. But in recent days, the temperature has been as high as 95 degrees at night in some areas, prompting residents to keep their air conditioners running all night. This causes the oil in small transformers that each serve up to 25 homes to overheat and fail. On Tuesday, about 29,000 Los Angeles residents were without power, according to DWP officials.
Are aging transformers and other equipment to blame for the outages? If so, what is being done to upgrade older infrastructure?
The number of outages during the current heat wave are about half of what they were during a similar weeklong spell last summer because of stepped-up efforts to fix or replace faulty or aging transformers, power poles and circuits. Most of Southern California's equipment was built just after World War II, and its normal life expectancy is 40 to 60 years. Homes are also sucking in more power because of new electronics like big-screen plasma TVs, which eat up about as much power as a large refrigerator and about a third the energy of a central air system. Both Los Angeles Department of Water and Power and Southern California Edison are in the middle of large retrofitting and replacement programs. The DWP recently replaced or repaired 3,000 transformers at a cost of $13.5 million and is seeking to spend $1 billion more over the next five years for new equipment. Edison replaced 9,000 power poles in the region to prepare for this summer and has pledged to spend a projected $14 billion over the next few years on upgrades and system expansion.
Mattel falling: So much for Wall Street's laissez-faire view of all these recalls. The stock is down 2.6 percent this morning, to $21.40, on news of yet another recall of lead-painted toys from China. This time, it's nearly 800,000 items that include Barbie accessories, GeoTrax trains and toy bongo drums. All were sold within the last year. As we noted yesterday, the holiday shopping season is just around the corner and the longer these recalls keep making front-page news, the more confused parents and retailers will be in deciding what toys are safe. Here's another problem for the El Segundo-based toymaker: the prospect of more litigation. (USA Today)
KTLA anchor jumps ship: Carlos Amezcua will be moving to KTTV (Channel 11), where he'll co-anchor the station's 10 p.m. newscast beginning Oct. 1. Amezcua's departure was a surprise, considering that many saw him as heir apparent to Hal Fishman (Amezcua has been anchoring KTLA's broadcast). But Amezcua had been operating without a contract at Tribune-owned KTLA for some time, and that gave KTTV a chance to move in. Losing out is KTTV anchor John Beard, whose contract was set to expire. Here's more from Variety, which posted the story late yesterday afternoon:
With Amezcua out of the running for the KTLA anchor slot alongside Leila Feinstein, candidates to replace Fishman include weekend anchor Frank Buckley, who has been subbing for Amezcua on "KTLA Morning Show." But KTLA insiders said it's more likely the station will look outside to find its next main anchor. KTLA veep-general manager Vinnie Malcolm was traveling Tuesday and unavailable for comment.
More housing woes: The number of Americans signing contracts to buy previously owned homes plunged 12.2 percent in July, the biggest drop since records began in 2001. The decline was also more than five times the median forecast of economists surveyed by Bloomberg News. "Our members are telling us some sales contracts aren't closing because mortgage commitments have been falling through at the last moment,'' Lawrence Yun, a senior economist with the National Association of Realtors, told Bloomberg. But he added that there are signs the market has been stabilizing since mid-August.
First American layoffs: The nation's largest title insurer will eliminate 1,300 jobs this quarter because of the housing slowdown. Santa Ana-based First American suspended salary increases and stopped hiring on Sept. 1 and may close at least 40 branches. Orders for title insurance in August were 5 to 15 percent lower than a year ago. Some perspective: First American boosted its employee roster by 76 percent in the five years ended last Dec. 31. This is a cyclical business folks. (Bloomberg)
Housing slump's aftershocks: It's hitting local and state governments, and it's easy to see why: Slower sales and lower prices mean falling revenues from building-permit fees, taxes on contracting and recording property transfers, and sales taxes. California forecasts a shortfall of at least $5 billion in next year's budget. Budget officials knew that the crazy revenue growth from home sales wasn't sustainable, but the extent of the slowdown has surprised them. Unlike the federal government, states and local governments generally balance their budgets. That means sudden revenue shortfalls can translate into serious cutbacks in spending plans. (WSJ)
Court interpreters on strike: Officials with the California Federation of Interpreters (who knew?) say that low wages and poor working conditions have caused a shortage of interpreters working for the courts. Actually, the shortage has been going on for some time. "Interpreters have only had two cost-of-living increases in eight years," said Silvia Barden, who heads the CFI. All told, 400 interpreters Los Angeles, Santa Barbara and San Luis Obispo counties went on strike today. (Daily News)
Another slap for Qualcomm: A U.S. appeals court has ruled that antitrust claims brought by chipmaker Broadcom Corp. against rival Qualcomm Inc. can go forward, reversing a lower court's dismissal of the case. Broadcom's lawsuit accused Qualcomm of stifling competition for chips that run mobile phones. The trial court had ruled that Qualcomm's alleged conduct did not constitute antitrust activity. Broadcom says it plans to go to trial as soon as possible. (Reuters)
Man bites dog: In other words, gas prices in the L.A. area are up a penny, to an average of $2.752 a gallon, according to the government's latest survey. Typically, prices drop after Labor Day, but this has been a crazy year, with prices falling steadily for much of the summer. There’s talk of more increases, the result of higher crude prices, more maintenance work on refineries, and tighter gasoline stocks. (EIA)
Movie deal: A Citigroup affiliate and a Paris-based film sales and distribution company have formed a joint venture and plan to acquire and co-produce feature films of up to $150 million. As part of the deal, Citigroup's Continental Entertainment Capital has provided the majority of an equity boost in the French company, Wild Bunch. The joint venture, called Continental Films, was brokered by the head of Continental, Ben Waisbren, who also negotiated Wild Bunch’s deal with Virtual Studios, an investment vehicle backed by a hedge fund called Stark Investments. Ring a bell? Waisbren was ousted by Stark after the big-budget bomb “Poseidon.” When will they ever learn? (The Deal)