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City of Seattle
Mike McGinn, Mayor
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NEWS ADVISORY
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| SUBJECT: Mayor Acts to Quickly Implement Key City Light Review Panel Recommendations
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FOR IMMEDIATE RELEASE:
10/10/2002 12:46:00 PM |
FOR MORE INFORMATION CONTACT:
Office of the Mayor (206) 684-4000
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Mayor Acts to Quickly Implement Key
City Light Review Panel Recommendations
Seattle- Calling it a "roadmap for continued improvement," Mayor
Greg Nickels said today that he would begin to immediately implement the
recommendations of the City Light Review Committee, which he appointed after
taking office earlier this year to analyze City Light management strategies and
governance. The committee presented its final
report to the mayor today.
Among the recommendations is the creation of an advisory board, exclusively
focused on City Light policy issues. The review committee was evenly divided
over whether the board should be advisory only or granted governing authority,
including the power to set rates, issue debt and approve budgets.
In May, the mayor directed the committee to explore issues arising out of the
2001 energy crisis, when a combination of runaway wholesale electricity prices
and severe drought sparked four City Light rate increases. The committee looked
primarily at City Light governance, as well as risk management, finances and
power resources.
"I’m pleased at the report I received today," Nickels said.
"It confronts issues clearly, gives me direct, thoughtful advice, and
acknowledges a few disagreements on difficult questions. It’s a good report.
It gives me a road map for continued improvement."
Committee chair Sharon Nelson, former head of the state Utilities and
Transportation Commission, said the panel’s charge was to look to the future
and offer advice on how the mayor and City Council could provide oversight and
make the best decisions on behalf of City Light’s citizen customers.
Nelson said the six panel members were unanimous in recommending an
independent oversight board but evenly divided over the question of its
authority.
"Given the fast-paced changes in the electric utility industry, the
panel was in complete agreement that an advisory board be set up promptly,"
Nelson said. "The mayor and the council can then judge its effectiveness
and make a decision about its future role."
She said the board could provide objective advice, offered with the long-term
interests of the utility in mind. "It would bring a level of expertise,
experience and in-depth consideration of policy issues that elected officials
may not have the time or background to provide," Nelson said.
Nickels noted that keeping up with utility issues is challenging as the
electric industry goes through an extended period of tremendous change.
"An advisory committee can help us keep up with that change and prepare
us for the risks and benefits it may bring," Nickels said.
While the report stressed the need for an oversight committee of industry
experts, it also said the mayor and city council members needed to be more
intimately involved in City Light issues. Specifically, the committee
recommended:
- Added utility expertise in the executive and council offices to monitor
and analyze City Light issues.
- Commitment by Seattle elected officials to spend more time and effort on
utility oversight.
- More involvement by Seattle elected officials in regional and federal
energy issues.
- More attention and clearer policy direction from the mayor and council on
City Light’s power and risk management functions.
The mayor agrees and outlined immediate actions he will take in response to
the panel’s report:
- Step one is to form a group of utility experts committee to provide the
mayor, the council and Superintendent Gary Zarker with strategic and
management advice. The mayor said he will immediately begin forming that
committee and setting its mission.
- Step two is to create a staff position, within existing resources, in the
mayor's office to advise the mayor on energy issues.
- Step three is giving additional direction to Superintendent Zarker.
Nickels said he today had asked the Superintendent to create a plan to
strengthen City Light’s systems for power marketing and risk management,
measure performance on key goals and attract experienced energy experts to
management positions at the utility.
The mayor also ask Zarker to hire an outside consultant to provide additional
suggestions for how the utility can best manage risk and make sure management
decisions are aligned to a risk-management strategy.
The report also found that City Light has difficulty attracting highly
qualified employees to some key positions because it fails to meet the salary
levels offered in the private sector. This is especially true in areas of
marketing City Light generated power outside the city and region. The committee
said the city must pursue a long-term goal of being competitive for these
positions, which can help bolster City Light revenues and in doing so help
reduce the need to shift financial burdens to rate payers.
"City Light has made a lot of progress over the past nine months in
lowering costs and addressing customer service issues," Nickels said.
"We need to do more to strengthen our position in a competitive and complex
energy market. I think the panel’s recommendations are important steps in that
direction."
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Mayor's Office
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