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| THE NEW YEAR and the NEW POWER REALITIES | ||
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Year 2000 has been a tumultuous one for the electricity industry in the western United States. At the beginning of the year, who would have predicted that the price of wholesale power would spike to more than $10,000 per megawatt before the year was out and would average in the hundreds of dollars? That’s a prediction too bold and bizarre for even the supermarket tabloids. But that’s exactly what has happened. The reasons and theories behind this are many: years of economic growth; large loads required for new computer-oriented businesses; lack of new supply; hot summer weather in California; cold winter weather in the Northwest; low rainfall; a bad deregulation model in California; market manipulation by a few large power suppliers. Any or all of these may be correct. But regardless of how it came about, this new market is today’s reality, and Seattle City Light must deal with it. We acted early to protect our financial integrity by working with Mayor Schell and the City Council to adopt a temporary rate increase of about 10 percent. But since September, when the increase was approved, power prices have risen even higher, the rainfall in our watersheds has been low, and power demand in California has continued to outstrip supply. City Light enters 2001 facing some of the greatest challenges in its history. But we did a lot of good work in 2000 that will help us meet these challenges. We negotiated an excellent contract with the Bonneville Power Administration, secured power from a new combustion turbine in Oregon, identified a number of new renewable resources and launched a campaign to double our take from conservation. In 2001, our utility will need to be creative and responsive, able to understand and deal effectively with the new realities of the industry. I’m confident we can be successful. | ||
| Superintendent Gary Zarker | ||
| January 4, 2001 | ||
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