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City Light Seeks Boost, May Need More by Kery Murakami Seattle Post-Intelligencer, January 9, 2001

Utility says it needs 18 percent raise to pay its own bills

Seattle's power crisis hit hard yesterday -- in the pocketbook as well as in calls for shorter showers, colder homes and a darker skyline.

Just one week after a 10 percent electric rate increase went into effect, Seattle City Light asked for another 18 percent boost, and began an intensive radio and television campaign aimed at conserving energy.

And under questioning by City Council members, City Light Superintendent Gary Zarker acknowledged that even steeper rates may be on the horizon. Electricity prices began climbing on the West Coast last fall, and the situation has grown progressively worse.

City Light is staggering from what Zarker called a "perfect storm" of forces driving up electricity costs. An unusually dry winter has reduced power generation at City Light's hydroelectric dams, forcing the utility to buy more power on the open market.

"Just when the rain stopped falling from the sky is when the prices started skyrocketing," bemoaned Jim Ritch, City Light's deputy director for finance and administration.

That confluence of forces blew a $111 million hole in last year's budget and will cause a projected $228 million deficit this year. City Light proposes to close that gap by borrowing money, conserving energy and raising rates.

The City Council approved a 10 percent increase last September when electricity prices began going up. The increase is attributed to power deregulation in California.

The first increase, which raised the average monthly residential bill from $39.59 to $43.12, was supposed to last only until the end of this year but now will remain in place through 2002.

Then the situation worsened.

Watersheds feeding the Pend Oreille and the Skagit rivers, which power City Light's hydroelectric dams, saw only half the normal rainfall since October. The dry weather increased the amount of power City Light has to buy from 8.5 percent to 17.5 percent. Then in December, electric prices more than tripled. That forced City Light to spend 90 percent of its income on electricity and to seek the new round of increases. The 18 percent increase would raise the average monthly residential bill from $43.12 to $49.73.

Including the first increase, the average bill would be 26 percent higher than it was four months ago, or about $10 more.

In addition, City Light would discontinue its practice of lowering rates during summer months for two years. Electric rates are typically 12 percent lower in the summer.

Council members scheduled public hearings on the proposal for tomorrow and Friday, though most said they'll probably vote for the proposal. If approved, it would go into effect March 1.

Addressing the council, Seattle Mayor Paul Schell focused on steps the city began taking last year to reduce its dependence on the electricity market.

In July, the city will begin buying power from a gas-turbine generator in Klamath Falls, Ore. The city is also looking for an environmentally friendly power source, probably wind power in Eastern Washington. The city will stop buying electricity on the open market on Oct. 1, when it begins buying more power at a set rate from the federally subsidized Bonneville Power Administration.

"We can celebrate that date as our energy independence day," Schell said. "Nevertheless, despite our foresight, for the next nine months, we'll suffer from California's sadly mistaken deregulation policies, which have opened the way for price gouging market manipulation by power companies and power brokers down there.

"On top of that, a politically divided Federal Energy Regulatory Commission is too timid to step in and solve the problem, as they should, on behalf of all consumers in the West," he said.

Schell called on Seattle residents to help by conserving power.

"We can do it," Schell said. "Just walk around your houses. Count the lights that are on. You'll discover some that aren't needed. Switch them off. It's that simple and it works."

City Light spokesman Bob Royer said the seven-week radio and television campaign, which began yesterday, would focus on the fact that about 60 percent of all electricity is used to heat rooms and water. Royer said the $500,000 cost of the ads would be shared with other utilities.

City Light also plans to send an energy-efficient fluorescent bulb to each of its roughly 300,000 customers and is asking downtown building managers to turn off more lights at night.

Although council members said they'll likely support the latest rate increase, Councilman Jim Compton said City Light was not being candid about the utility's crisis. He predicted more increases will follow because City Light can balance its budget only if two somewhat rosy assumptions hold true.

City Light is assuming the BPA will ask for no more than a 17 percent increase in the price of power it sells the city. Zarker acknowledged that's probably a low estimate, but Royer said City Light did not want to unnecessarily boost rates higher than needed by assuming a larger bill from the BPA.

The utility also assumes prices will moderate either because California's power shortage is easing or the federal government will cap wholesale electricity prices at about half the going rate.

U.S. Rep. Jay Inslee met with council members yesterday and later said winning a price cap is an "uphill battle."

Zarker acknowledged that if either assumption proves false, the utility may have to come back asking for more money.

The Council's Energy and Environmental Policy Committee will hold public hearings on the proposed rate increase at 12 p.m. tomorrow and at 2 p.m. Friday. Both will be in City Council Chambers, 11th floor of the Municipal Building, 600 Fourth Ave.

Power-saving tips

• Organize a drive to collect recyclables and donate proceeds to a charity. Or, if there isn't yet a recycling program in your community, set one up. Making glass, paper and aluminum from scratch uses far more power than does recycling the materials.

• Weatherstrip around doors and windows to prevent energy leaks. Install "sweeps" and "shoes" to stop air from sneaking in under doors. If the crack under a door is too wide for store-bought weatherstripping, make a cloth "snake" filled with sand or beans and lay it against the bottom of the door.

• Caulk around electric switches and outlets and fill other cracks, such as where a wall meets the outside edge of a window frame. You can get gaskets that fit behind switch plates and outlets to block a draft. Putty or glaze loose panes of glass.

• Make sure your attic is well-insulated, perhaps even by adding to existing insulation. Seal holes where conduits and pipes enter the attic and along partition walls, eaves and knee walls with caulk or compressed fiberglass insulation. Ensure your attic is well-ventilated so it doesn't let warm household air escape in winter and hot outside air in summer. Properly placed high and low venting will result in natural convection currents, which keep air flowing through the attic.

• Install aerators on faucets, reducing water flow by 50 percent -- and saving hot water -- even though the flow will seem stronger because air is mixed into the water as it leaves the tap. Don't confuse energy-efficient faucet aerators with standard screen aerators, which don't reduce faucet flow rate.

• Use cold water in the wash, which can cut energy use by half and produce equally good results for most clothes. Set the water level in the washing machine to suit the size of the load, and try washing on a "delicate" cycle instead of "regular" so the motor won't have to work as hard.

• Clean the dryer lint filter after each use to let air circulate efficiently. Don't overload the dryer, and dry heavy and light fabrics separately so that all the clothes in the load will be done at once. If your dryer has a moisture sensor setting, use it; it typically cuts energy use by 10 percent to 15 percent.

• Set thermostats to 68 degrees Fahrenheit in the daytime and 55 degrees at night in winter; 78 in summer. Make sure the temperature near the thermostat is representative of the rest of the house, not in a drafty or sunny spot that might cause false readings and wasted energy.

• Turn off the lights when leaving a room. Dust the light bulbs and clean fixtures before switching to higher-watt bulb. Use fewer bulbs in multiple-bulb fixtures. Replace regular incandescent bulbs with energy-saving compact fluorescents where lights are left on for at least two hours a day.