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City Light customers may face rate roller coaster as demand rises

Thursday, December 7, 2000

By JACK MAYNE SPECIAL TO THE POST-INTELLIGENCER

It's not likely local residents will again see the low-cost electric power they're used to getting from Seattle City Light, and there's a great likelihood that even the utility won't be certain of the day-to-day cost of providing power to its customers.

That was the word from Nancy Glaser, director of strategic planning for Seattle City Light at the annual meeting of the Washington Public Ports Association in Seattle yesterday.

"I started my day (yesterday) with power selling for $1,000 a megawatt hour and later in the day it come down to $400 a megawatt hour," Glaser said. At current rates, City Light sells a megawatt for $40.

All of this is because of degregulation of the distribution of power in states where costs have been inherently high.

The idea of deregulation of power generators and distributors was to open up electrical sources to all people, Glaser said, but what has happened is distribution has been concentrated in the hands of five companies. Those companies are now able to control the price of power so tightly that they are able to threaten brownouts even when there is adequate supply.

And the result in the Northwest is likely to be more expensive electricity.

"We have had cheap power here in the Northwest, so our rates will go up while others will see rates decline," Glaser said. "We will have to live with very extraordinary prices for a very long time."

For those who would invest in new power generation, "there is lots of uncertainty" because they will worry that coal- or gas-fired plants will not be used in the Northwest except when there are dry periods affecting hydroelectric generation. Adding to the uncertainty of combustible power generation are the "crazy prices" of natural gas, Glaser said.

All of this leaves Glaser grasping at straws trying to forecast the cost of buying needed power.

Once, the Northwest had a surplus of power, but now City Light has to buy power on the open market, especially in winter. This is due to the growth of industry, including large computer-server centers which use vast amounts of power, and the fact that the Northwest is linked to the rest of the West, including power-hungry California.

http://seattlep-i.nwsource.com/business/lite07.shtml

-- Martin Thompson (mthom1927@aol.com), December 07, 2000


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