the film forum library tutorial contact

City Light may Lease Generators by Mike Lewis, Seattle P-I Reporter Seattle Post-Intelligencer, February 23, 2001

Cost of gas-powered units is lower than current market rate

In an effort to secure more-reliable and potentially cheaper power, Seattle City Light is negotiating a deal to lease 50 1-megawatt power plants and install them in an airport district storage yard.

At full capacity, the small generators would give the utility a greater margin of reserve while it waits for new contracts with the Bonneville Power Administration and a new power plant in Klamath Falls, Ore., utility staff members said.

If a deal is reached, the series of cargo container-sized, natural gas-fueled power plants will be leased for one year from General Electric and placed in a yard near Fourth Avenue South and South Spokane Street within a month.

Because the deal hasn't yet been finalized, City Light officials would not provide the expected cost of the lease, generator installation and the natural gas to run it all. Spokesman Dan Williams confirmed that the utility wants an overall deal that would allow the plant to generate electricity at about $170 a megawatt hour -- a price less than market-rate peaks of $500 for the same amount.

"This will help out," Williams said. "Next to $500, it's a big savings, so it makes sense financially."

Not everyone is so sure.

Sara Patton, director of the NW Energy Coalition, said the utility could get locked into a deal that easily could exceed market rates.

"I agree that the rate they expect from these plants is less than they pay today," she said. "But they have a new (BPA) contract coming up. We don't know yet what those rates are going to be."

City Light generates 60 to 70 percent of its average daily load of 1,150 megawatts. The rest it buys from other private and public sources. Under a contract set to expire in October, it buys 190 megawatts from Bonneville at $20 a megawatt, far below the market rate. Its new deal with the federal provider will send 490 megawatts to the local utility but at a higher price. Federal power authorities have not yet set the price.

Williams said the new Bonneville deal will be more expensive, but still could be less costly than the expected new generators in the city's industrial south. Even so, he said, City Light must make sure it has some extra capacity on hand while it waits for the October contract and a new deal for 100 megawatts from Klamath Falls that starts in July.

Seattle City Councilwoman Heidi Wills said she thinks the temporary power plant plan is a good one. "It will reduce the risk of blackouts," she said. "Our priority is keeping the lights on."

In recent public meetings, however, critics of the utility have pointed out that while City Light now begins leasing generators for reliable power, the company little more than one year ago sold off its stake in a Centralia coal-fired plant that provided 100 megawatts at less that $15 for every megawatt hour.

Williams agreed that the Centralia plant was cheap, but only for the short-term. "That plant was the number one generator of sulfur-dioxide in the Puget Sound region," he said. "In the long-term, we would have been responsible for millions of dollars in major emission reductions and cleanup."

And it's emissions, to an extent, that have made natural gas appealing to utilities. Energy experts said the Jenbacher-manufactured generators are considered low-polluting. The utility currently is meeting with officials from the Puget Sound Clean Air Agency to get the required permits.

Moreover, Seattle under its own ordinances must offset the greenhouse gases produced by the plant. This could be accomplished in a variety of ways, Williams said, including, planting additional trees or reducing its own vehicle miles.

The coalition's Patton said she understands that the energy crisis has City Light in a bind. And she's glad that they chose natural gas generators instead of high-pollution diesel. Primarily she's pleased that any pollution they produce must be offset in some manner.

"If anyone is going to be adding greenhouse gases, I'd rather it be city of Seattle," she said.

In other developments, the BPA yesterday put out requests for a proposal to buy as much as 1,000 megawatts of wind-generated electricity.

Bids are due April 6, and Bonneville wants the power to be available no later than 2003. The request calls for the electricity to be competitively priced but doesn't define a range of prices.

The West Coast power crunch has prompted a flurry of proposals for new generating capacity, including wind. Florida-based FPL Energy has proposed a 300-megawatt wind project on the Washington-Oregon border; however FPL plans to sell all the power to Portland-based PacifiCorp.