Washington State Sounds Off on Power Prices
Governors of nine western states announced last week an emergency energy
conservation strategy to avert a California-type energy crisis and to mitigate
future higher energy prices.
The governors vowed to work towards these goals, not only during the
cold winters, but also during the summer and in the years to come. Governors
from the states of Arizona, Colorado, Idaho, Nevada, Oregon, New Mexico,
Utah, Washington, and Wyoming signed on to the strategy focusing on educating
the public on energy conservation methods. The governors, members of the
Western Governors' Association, will meet at an Energy Policy Roundtable
Feb. 2 in Portland, OR, to review the implementation of state strategies,
and examine short and long term solutions to the current power crisis.
In Washington state, one of the hardest hit by the decline in hydropower
and power demands from California, municipal and investor-owned utilities
have already initiated conservation drives. Last week Seattle Mayor Paul
Schell and the Seattle City Council instituted a conservation plan as its
municipal utility, Seattle City Light, proposed an 18% rate increase. At
the same time, neighboring investor-owned utility Puget Sound Energy asked
its consumers to switch whenever possible to off-peak power use.
In Seattle City Light's 18% increase, the utility cited soaring wholesale
power costs and a drier than usual year as the primary reasons for the
hike. Mayor Schell addressed the city council, repeating his request that
the federal government step in and fix the situation. He lamented "California's
sadly mistaken deregulation policies, which have opened the way for price-gouging
market manipulation by power companies and power brokers," and asked
for the Federal Energy Regulatory Commission (FERC) to step in and cap
the price of market electricity throughout the West.
Schell also criticized the federal government for allowing the current
situation to worsen. FERC "is too timid to step in and solve the problem,
as they should, on behalf of all consumers in the West," Schell stated.
"California's greed and timid regulators risk throwing the West and
Washington state into recession."
City Light Superintendent Gary Zarker told the city council that he
is proposing the rate increase "with the confidence that we are managing
our way through a very difficult situation." Zarker said that a contract
with the Bonneville Power Administration for City Light's full allotment
of electricity, along with a share of power from a combustion turbine and
a doubling of conservation efforts will eliminate the need for costly power
purchases from the West Coast wholesale market by the end of the year.
The Seattle City Council already approved a 10% rate increase in September,
but still climbing power prices have forced City Light to raise rates again,
the superintendent said. The utility also pointed out that the region has
experienced the third-driest November and December in the last 75 years,
reducing the power capacity of the region's hydroelectric dams.
Schell and the city council in a related maneuver, announced a voluntary
conservation program aimed at reducing the amount of electricity the utility
must purchase from the West Coast wholesale market. The plan, which targets
residential, commercial and industrial consumers, hopes to limit the size
of future rate increases as well.
"We are calling on City Light customers to reduce their electrical
demand by 10% at home and at work through the first quarter of this year,"
said Schell. "Customers will not only save money on their bills, but
at today's wholesale electricity prices, they could help City Light save
as much as $500,000 a day."
The Seattle City Council recommended the normal methods of conserving
energy, including lowering thermostats, turning off appliances, and washing
clothes with cold water.
"Conservation is the key," said Heidi Wills, chair of the
Seattle City Council's Energy and Environmental Policy Committee. "It's
the tool that customers can use to control their own bills, and it benefits
the environment. There are lots of other ways to cut electricity use and
reduce your bill. By simply turning off your personal computer when not
in use, you can save up to $50 a year. And by the way," Wills added,
"let's turn off that holiday lighting right now."
Schell said that officials would be working together with businesses
throughout the city to help them save energy during the periods when it
costs the most. He emphasized that the city will do its part. "I am
directing my department heads to begin immediately to reduce electricity
use by 10%," the mayor said.
Zarker noted that the utility currently must buy 20-30% of its electricity
from the West Coast wholesale market during the winter months. "If
we can reduce demand by 10% through conservation, it will help our financial
situation considerably," the superintendent said.
Puget Sound Energy (PSE) is also on the warpath, urging its customers
to observe Gov. Gary Locke's statewide call to conserve electricity. In
combination with conservation efforts, the utility is asking its customers
to shift their electricity usage to off-peak hours to lessen the burden
during the day.
"Our region's households and businesses effectively could reduce
their demand for electricity by shifting some of their energy consumption
away from the hours when wholesale power prices generally spike up each
day," said Gary Swofford, PSE's vice president of delivery.
Swofford said if PSE's 920,000 electric customers shifted just 10% of
their peak-hour electricity use to off-peak hours, it would free up some
200 MW of power, enough to light almost 200,000 homes.
PSE also received a cost adjustment increase it had previously requested
from the Washington Utilities and Transportation Commission (WUTC). The
WUTC granted the utility an average rate increase of 19.4 cents per therm.
The WUTC granted similar increases to two other Washington state utilities
as well, Avista Utilities and Cascade Natural Gas.
The entire conservation strategy released last week by the Western Governors
Association is available at www.westgov.org.