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Silicon Valley's Dark Days
 

The mighty tech corridor is losing power. Literally.
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Alternative energy is a hot topic in Silicon Valley, with venture capitalists betting nearly $400 million on related technologies in 2006 alone, according to Dow Jones VentureOne. How ironic is it, then, that the local power company is struggling to keep the lights on? The area experienced five power outages in the first six months of 2007, including three in the first half of June. The blackouts have lasted for a few hours at a time, fraying nerves, disrupting negotiations, and forcing entrepreneurs to abandon PowerPoint presentations. The faltering grid is "the dirty little secret of Sand Hill Road," says Drew Lanza, a partner with Morgenthaler Ventures.

Compounding the problem is the fact that many companies in the area have adopted Internet-based phone systems, so a loss of power shuts down phone service. What's more, the scenic hills that surround Silicon Valley render cell phone reception spotty at best.

Rising demand, aging infrastructure, haphazard deregulation, human error, and even overgrown vegetation have been blamed for the blackouts. Pointing the finger, however, provides little consolation for the frustrated technologists and VCs. Pacific Gas and Electric, the local utility, has promised to correct the problem, but some companies are taking matters into their own hands. The venture capital firm Highland Capital Partners recently spent $50,000 to install a top-of-the-line generator. Peace of mind is a pretty powerful return on investment.

Last updated: Aug 1, 2007




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