Seattle's power decisions: dumb but green

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Wednesday, March 12, 2003 - 12:28 a.m. Pacific

Bruce Ramsey/Times editorial columnist

The disaster at City Light — an increase of $700 million in ratepayer debt and 60 percent in residential rates in two and a half years — is traceable directly to the policies put in effect by Gary Zarker. It is no surprise that the superintendent was shown the door. But as City Light power dispatcher Megan Cornish told the Seattle City Council last week, the responsibility lies in "the people who made those policies, which is you."

In Seattle, council members are all Democrats — Seattle Democrats, which means environmentalists. In 2000, when the power crisis began, council members Peter Steinbrueck, Nick Licata, Judy Nicastro, Richard Conlin and Heidi Wills were, in addition, publicly declared members of the Green Party, the party of environment first.

It was the council's decision to sell Seattle's interest in the Centralia coal plant, which supplied 7 to 8 percent of the city's power. There was no economic reason to do this. The city needed the power. The council sold the plant because it polluted the air, and council members wanted to look green.

Here is the social-investing fallacy, which is that you can do good by selling things that are bad. Actually, to do good you have to fix things that are bad; selling them just gives bad things new owners. If the group of utilities that owned Centralia had wanted to be responsible, they would have improved the pollution controls at the plant — which is what the new owners did.

City Light calculated that after the Centralia plant was cleaned up, its electricity would cost $25 per megawatt. Instead, City Light chose to buy electricity from the same plant over the next seven months at an average price of $146.

Zarker allowed on his visit to The Times last week that selling Centralia "was not a good economic decision." Indeed. It was never any kind of economic decision. It was a political decision.

So was the Earth Day resolution passed on April 10, 2000. Sponsored by Heidi Wills and passed 8-0 (Steinbrueck not voting), it celebrated the change in City Light from being a "power first" utility into a "fish first" utility, and instructed the agency to meet all of Seattle's new power needs with "renewable" power and "no net greenhouse gas emissions."

In pursuit of this, City Light on July 10, 2000, advertised for bidders to supply Seattle with 100 megawatts of renewable power — the same amount it had lost from Centralia.

"Together, we'll show how a big city can meet all its power needs without contributing to global warming," said an op-ed, bylined Wills and Mayor Paul Schell, printed on these pages Sept. 19, 2000.

Unfortunately, on May 22 of that year was unleashed the first thunder of "the perfect storm." Power prices surged and began swinging erratically. The thing for every utility to do was to nail down their needs for power — any power and right away.

Seattle rushed out and bought power to the end of 2000 — as noted, at a much higher price than the power it had just sold. Also, at an expected price of $56 per megawatt, lined up a (non-renewable) natural gas plant at Klamath Falls coming on line in the late summer of 2001. But that left about a seven-month hole to fill.

And they didn't fill it. They winged it, betting on the spot market. It was an immense, expensive error.

Skip over whose fault that was. What set them up for that loss was selling Centralia.

Well, the perfect storm came and went, City Light's debt piled up to a cumulative $1.7 billion, and for the first time in memory, rates at City Light were higher than those of dividend-paying, tax-paying Puget Sound Energy.

City Light did find some green power, from windmills. Of course, these windmills are made of the products of the mining, smelting, chemical, petroleum and electric utility industries, and are no more "renewable" than a Metro bus. But wind is free. When the wind was blowing, these high-tech windmills would supply about the same amount of power City Light had lost from Centralia.

The price: $50 a megawatt, double the cost from a cleaned-up Centralia.

Dumb, yes. But indisputably green.

Bruce Ramsey's column appears regularly on editorial pages of The Times. His e-mail address is bramsey@seattletimes.com

Copyright © 2003 The Seattle Times Company