LOCAL RESIDENTS HUNKER DOWN FOR DARK, COSTLY WINTER.

Byline: Karen Maeshiro, Jim Skeen and Bhavna Mistry Staff Writers

More than 675,000 California homes and businesses lost power Thursday in a second straight day of blackouts.

The ripple effects of the state's electricity crisis were felt by industries and communities across the state. Power problems shut down the state's main gasoline pipeline and forced farmers to dump milk because dairy plants were operating on reduced hours.

State regulators imposed rotating blackouts about 10 a.m. that stretched from Bakersfield to Oregon and lasted about two hours each.

South of Bakersfield, customers of Southern California Edison again escaped blackouts, and power managers said they expected to have enough power today.

Still, the threat of blackouts forced many businesses, municipalities and school districts to cut back because of high emergency power rates, and sent consumers scurrying to stores for supplies.

The Antelope Valley Union High School District will send students home early at six of its high schools starting today and continuing through the end of next week.

The district also will cancel evening classes and freshman and junior varsity basketball, soccer and wrestling events, and reschedule varsity games to daylight hours to conserve electricity and avoid paying excessively high electric bills.

``We're caught between a rock and a hard spot. You don't want to use money in reserves in paying exorbitant electric bills, and you don't want to stop educating kids,'' board President Brett Nelson said.

Under an ``interruptible service'' contract with Edison, the district must either shut down or face punitively high charges - more than 100 times the normal rate - during times when electrical reserves fall to critically low levels.

Palmdale city officials have taken away workers' portable heaters, turned off decorative lights outside city buildings and are shutting down park lights earlier every night.

``We want to show this is what the city is doing to reduce its costs and we are encouraging others to do the same,'' said Mayor Jim Ledford.

Officials at the Wal-Mart store in Simi Valley said they have seen a 20 percent increase in the sale of ``blackout merchandise,'' such as batteries, blankets, candles and warm clothing.

In case the store is caught in a rolling blackout, officials said, a one-hour back-up generator will kick in, and employees will escort shoppers to the front of the store.

``Our main concern is getting the customers out safe,'' assistant manager Gloria Morfin said. ``I'm sure it's going to happen. It gets pretty dark in here.''

In Oxnard, business was hot for Quinn Engine Systems, a Caterpillar company that sells and rents generators.

``All of our rental fleet is gone,'' sales manager Darryl Sackmann said. ``Just about all rental fleet in the state of California is gone.''

Employees of the Oxnard company, which usually stocks about 60 rental power-generating units, are now working overtime, scrambling to help their customers find generators.

``We'll do anything. We don't care what it costs,'' Sackmann said, noting that the firm had received many calls Thursday. ``People are desperate.''

At Verizon in Thousand Oaks, company officials have initiated an employee awareness campaign and had 10,000 posters printed and posted throughout the company to remind employees to cut power usage at work and at home.

``They remind our employees to turn off their personal task lights, turn off printers and computers when not using them and to conserve energy when they are at work and at home,'' said Julia Wilson, spokeswoman for Verizon. ``We're leading the industry in being very proactive.''

The company, which spends about $27 million on energy costs in California, is also seeking more efficient ways to use energy, including ways to maximize generator usage, and is exploring alternative energy sources.

The Associated Press contributed to this report.