A dry year in Washington state, corporations in California, and mounting debt have forced City Light into decisive action--raising the prices consumers pay for electricity. Otherwise, the city will black out from lack of power. This, of course, has gotten everyone's attention, including the city council, which is now debating how and when to raise residents' bills. You may be asking yourself, "How did we get here?"
Here's what's up. Seattle gets its power from three sources--a hydroelectric dam powered by the Pend Oreille and Skagit Rivers, the federally subsidized Bonneville Power Administration (BPA), and the open market. Under normal conditions, because Washington state uses generators powered by water from the dams, Seattle enjoys cheap energy bills. We obviously get a lot of rain, so usually there is an abundance of energy. This year, however, it's been dry as a bone. In 2000, Washington had its third driest November and December in 75 years. According to City Light, the Skagit River, where the hydroelectric dam operates, is 27 feet below normal. Furthermore, accumulated snowfall in the mountains, the source of water for our rivers, is 39 percent less than last year. But it's not just Washington's low rainfall that is making us pay big bucks--it's also greedy corporations in California.
Seattle, like all cities, buys its energy on the open market when its supply is running low. This means we have to purchase energy from other power companies. In most cities, like Seattle, the energy is controlled by the city and the state. However, in California, where Seattle buys some of its power, corporations like Enron and Southern Company control the supply of energy. This is a result of market deregulation. Market deregulation allows different companies to compete for consumers' business, as opposed to a city-run organization like Seattle City Light, where there is no competition, but there are price controls. Since California was deregulated in 1998, the power companies have raised prices on energy and have seen a 500 percent jump in their profits. For example, the price of a megawatt hour in California this winter jumped from $150 to $5,000! In addition, California had an incredible population boom recently, and the power companies have responded by refusing to build new energy-generating facilities. This keeps the energy supply tapped and the price high. Seattle is affected because we are partially dependent on California's pricey electric power for our energy. (Dependence on the open market has gone from 12 percent to over 20 percent in the last year.) Ironically, last week, in the midst of Seattle's own energy crisis, City Light actually sold power back to California, where thanks to deregulation, that state is facing its own power crisis. (However, City Light sold the power to California for twice the cost, thereby making a profit.)
Because of the low rainfall and the energy companies in California, Seattle City Light has gone into debt, and the residents of Seattle are expected to help pay for it--a projected $228 million deficit this year alone. City Light is trying to ease the debt by raising the costs of energy bills and convincing residents to conserve. To urge conservation, City Light will spend $500 million on a media campaign directed at Seattle residents. According to City Light, Seattle needs to cut at least 10 percent of its monthly use to ease the strain. The city council has yet to agree on whether it will raise the bills now or in periodic increments.
"We expect to make a decision by January 29," says City Council Member Heidi Wills, who chairs the city's Energy and Environmental Policy Committee. "It's funny--when I took over the committee, everyone thought it was a sleeper committee, including me."
