In a complaint filed to the UTC, eight major Northwest corporations, including Boeing, Intel, and Qwest, are claiming market energy prices are too high ["Who Turned Out the Lights?" Pat Kearney, Jan 18], and they need the state's help. Furthermore, the complaint alleges that Puget Sound Energy (PSE), the company that provides energy to many Northwest corporations, is price-gouging by buying energy cheap and selling it at an inflated rate. In response to the complaint, the UTC is forcing PSE to cap costs at $125 a megawatt hour. (Megawatt prices reached $5,000 an hour late last year.) PSE claims they are only selling energy in accordance with the special contract that's reserved for corporate clients. Indeed, the irony of the corporate clients' complaint is that the "bum" contract is precisely the agreement energy users like Boeing vigorously lobbied for in 1996. "They got what they asked for," says energy advocate Sara Patton of the NW Energy Coalition.
Five years ago, many of PSE's clients demanded they be allowed to switch from their old regulated contract to a new open market contract. A regulated energy contract sets energy at a fixed average price and helps protect consumers from market volatility. By switching to an open market contract, the companies wanted to go shopping for cheap energy, and gamble that they would be savvy enough to outsmart the market. "We all thought it would be safe," says Don Tyler, energy manager for King County Wastewater Treatment, one of the companies with a free-market contract. At the time, the UTC, consumer groups, and PSE warned corporations about the market's unpredictability. Until recently, the corporations saved millions with their gamble. But with the current energy crisis, that has changed. Energy is now roughly 100 times the normal price.
Next week, at a hearing in Olympia, UTC members and legislators will ponder how much more of a bail-out they should give to Northwest businesses.