We cover January 17th in two parts. In Part 1: Ike, Military Adventures and Murder we address President Eisenhower’s farewell speech warning of the Military Industrial Complex, the murder of Raoul Wallenberg and Patrice Lumumba and military adventures and misadventures in Hawaii, Spain and Iraq.
In this part we cover the 1994 Northridge earthquake and the California electricity crisis of 2001.
Northridge Earthquake Hits Los Angeles
At 4:30:55 a.m., a 6.7 magnitude earthquake struck Los Angeles with an epicenter in the San Fernando valley neighborhood of Reseda. The earthquake lasted 10-20 seconds and produced the highest recorded ground acceleration in a North American urban area and the highest peak ground velocity.
The quake killed 57, with more than 8,700 injured, with property damage between $13-40 billion, making it one of the costliest natural disasters in U.S. history. The quake damaged several major freeways, including severing a portion of the 10 Freeway in the heart of the city and heavily damaged the Cathedral of Saint Vibiana’s which had stood as the official cathedral for the Diocese of Los Angeles since 1876.
On the 20th anniversary, CBS explored whether California was ready for the next “big one.’
A massive earthquake hit Kobe, Japan on the first anniversary of the Northridge quake. The 6.9 quake killed 6,434 people.
California Declares Power Emergency
California’s attempt to deregulation electricity markets caused an economic crisis within the state as energy traders, led by Enron, shifted electrical capacity outside of the state to drive up rates. After Governor Davis declared a power emergency, the state endured rolling blackouts over January 17-18th.
Davis was forced to step in to buy power at highly unfavorable terms on the open market, since the California power companies were technically bankrupt and had no buying power. The resulting massive long term debt obligations added to the state budget crisis.
In 1999, the entire state–including public power authorities at municipal levels–spent $7 billion for power. In 2000, a year later, for approximately the same amount of electricity, $32.5 billion–a 450 percent increase.
The crisis cost the state between $40 to $45 billion. Enron eventually went bankrupt, and signed a $1.52 billion settlement with a group of California agencies and private utilities on July 16, 2005. However, due to its other bankruptcy obligations, only $202 million of this was expected to be paid. The Federal Energy Regulatory Commission assessed almost $1.2 billion in civil penalties and $382 million in disgorged profits against companies involved in the manipulation.