Published September 2001

Energy officials hopeful
the worst is over

By Kimberly Hilden
Herald Business Journal Assistant Editor

“There’s an ancient curse that says, ‘May you live in interesting times,’ and for those of us who are in the energy business ... these are very, very interesting times,” said Dick Watson, Director of the Power Planning Division for the Northwest Power Planning Council.

Watson, along with Snohomish County PUD General Manager Paul Elias, addressed Northwest energy issues — supply concerns, wholesale cost fluctuations and consumer rate increases — at a recent Everett Area Chamber of Commerce luncheon. Their message to the business community was cautiously optimistic.

“We are, we think, on an improving trend,” Watson said, citing new power-generating plants in the works across the region and a downward trend in prices since late spring. But he was quick to add that consumers need to continue their efforts to conserve and use energy more efficiently.

“Things can seriously go wrong if we relax,” he said, noting below-normal water levels for the region’s hydroelectric system and the council’s current estimates of a 12 percent chance of energy shortfall in the winter, which could lead to rolling blackouts.

It’s a possibility the PUD is preparing for — just in case, Elias said.

Should rolling blackouts be necessary, the PUD is looking at a period of one to four hours in which power would be cut off in a certain area, he said. But that four-hour estimate is conservative, accounting for unknowns in the process.

“We’d really like to say no more than two hours,” Elias said.

PUD officials also are forging a plan that would get information to the public as quickly as possible in the case of an imminent blackout, including alerting police and fire agencies, providing instant messaging to several hundred other key industrial and commercial users and arranging for broadcasts to warn consumers.

As for its resources, the PUD is in “pretty good shape” for the near future, Elias said, with 80 percent of its power coming from the Bonneville Power Administration and 20 percent coming from the utility’s Jackson Hydroelectric Project and other long-term contracts.

With the volatility of the wholesale market, “Bonneville is still by far the best buy,” Elias said.

Even so, that volatility has spurred the BPA to review its rates every six months, which could impact PUD rates, Elias said.

In June, the BPA announced a pending wholesale rate increase of 46 percent, effective Oct. 1, which could translate into an increase “around 18 percent,” for customers, Elias said.

Still, that’s a small sum when compared to the 250 percent wholesale rate the BPA was eyeing before it asked regional utilities to reduce their load needs, Elias said.

As for meeting its long-term supply requirements, the utility is looking at other forms of generation to complement its hydroelectric resources, from wind and geothermal power to gas-turbine plants. The PUD also is doing a pilot fuel cell project at its Operations Center, Elias said.

“Conservation will continue to be a big, big part (of the solution to the energy problem),” he said.

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