A Jolting Warning

Moss Landing Power Plant engineer Scott Flake works in the control room that powers 1,500 megawatts of power at the plant in Moss Landing, Calif., Thursday, Dec. 7, 2000. The plant is partially shut down to work on air pollution controls and routine maintenance. California edged perilously close to an unprecedented statewide electricity crisis Thursday as an overwhelmed power grid, crippled by idled power plants and tight energy imports, strained to meet the load. (AP Photo/Paul Sakuma)
When the lights went out in California, New Yorker Michael Clendenin took a deep breath. Consolidated Edison — or Con-Ed, the company Clendenin works for — provides power to all of New York City, some 3 million customers.

California's collapse, Clendenin says, is a warning to every state in America, CBS News Correspondent Byron Pitts reports.

"It could happen in New York if we don't build more power plants and start building them very soon," said Clendenin.

Blame the economy: The "financial boom" of the 1990s and deregulation have pushed America's power supply to the brink. New homes, new business, more and more computers running 24 hours a day — all of it has zapped power supplies, making it so that New York is no longer the only city that never sleeps.

"The lesson in California is pretty clear: There's a right way and a wrong way to set up power markets," said Larry Makovich, an energy market analyst with the Cambridge Energy Research Association.

Makovich sees various "fatal flaws" in nearly every system across the country. As he explains it, America is divided into two main power grids — California out West and New York in the East. Both provide the biggest drain on aging systems.

"California and New York are the glaring examples of where it doesn't seem to be profitable to build power plants or possible. The siting and permitting there make those two places some of the toughest places on earth to build new power plants," Makovich said.

If there is one place in the nation that's found a workable solution, it's Texas. Years ago, the Lone Star State decided to go into the electric power business alone, with its own grid, no conflicts with neighboring states and less government regulation.

"We are not interconnected with any other power system in the United States. Texas essentially lives and dies by it's own capabilities," said Tom Noel, an energy company executive.

Despite criticism from environmental groups, Texas built 20 power plants in five years. Another 15 are now under construction.

Other states are following suit. Connecticut has at least four baseline and peaking power plants under construction or in the final permit stage, and Connecticut's plants will greatly reduce electricity shortages in New York.

The peaking plants in particular — plants built to run only when electricity runs short — will be helpful when during shortages.

Other states, such as Nebraska, will probably not face a California crisis because the state's one-of-a-kind public power system generates enough electricity to meet demand.

The state's power officials say their customers have nothing to worry about despite daily reports of rolling blackouts, skyrocketing power rates and multibillion-dollar taxpayer-funded bailouts in California.

The only way such problems could hit in Nebraska is if the state's power providers were unable to meet demans and could not afford to buy electricity from other companies.

"It would have to be a number of variables for that to happen," said Dave Simon of the Nebraska Public Power District.

Put simply, Nebraska would have to see simultaneous failures at a number of large power plants — an unlikely scenario if proper maintenance schedules are followed at the state's plants.

Other states in the U.S., especially New York, may not be so fortunate.