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No Rubber Stamp on
City Light Superintendent Confirmation
By Bruce Harrell
This spring, Seattle City Light Superintendent Jorge Carrasco is up for reconfirmation. It will present every issue defining successful leadership. We need strong leadership that can provide solutions to crisis management; that understands customers, rates, and department morale. We need forward-thinking leadership.
Owned and operated by the City of Seattle, City Light is one of the largest public utilities in the United States, receiving over $830 million in annual revenue. My father began his career with City Light as an apprentice lineman and retired after 30 years as the manager of internal audit. His tenure at City Light resulted in my life-long connection with the utility. As chair of the Energy and Technology Committee for the Seattle City Council, I am charged with its legislative oversight. As such, I fully accept my obligation to administer the reconfirmation process in a thorough manner. My background in law and organizational effectiveness will be useful tools but more importantly, so will the feedback from its employees, customers and colleagues on the Council.
Reconfirmation decisions should never be a slam dunk. Back in 2003, the Seattle City Council was faced with reconfirming City Light Superintendent Gary Zarker. He was drawing criticism for a 58% rate increase over three years, doubling the debt from $800 million to $1.6 billion, and also for failing to implement a critically important risk management plan. Faced with the notion that the City Council was not going to reconfirm him, Zarker abruptly retired from his post at City Light. After a search, Carrasco accepted the helm.
Superintendent Carrasco has drawn criticism regarding employee morale, his work toward a risk management plan, and the fact that he has placed his own people in key leadership positions instead of promoting from within. To his credit, rates decreased by 13 percent in 2006 and have remained stable. An asset management plan was funded and implemented and significant work has begun on addressing the deficiencies highlighted by the power outages that occurred as a result of the December 2006 wind storm. It is my job to analyze the achievements as well as the deficiencies.
City Light is a monopoly and most customers do not have alternative options regarding electricity. I would like to see City Light operate as though they are a competing enterprise by providing customers the best possible customer service. Look at companies that sell bottled water. These companies market the same product, but some distinguishable brands add something extra. One company transfers 100% of their profit to breast cancer research. Another offers a new sport grip bottle. However, “water is water” regardless of how it is marketed. These companies understand there must be added value to create customer loyalty. I believe that an organizational culture that embraces competition will tap into the creativity of its employees to produce superior service.
The absence of a risk management plan was one of the main elements that led to Zarker’s departure. Risk management is a critical tool for minimizing the risks inherent in energy trading. To fully meet its load requirement, in addition to providing power, City Light buys power and also re-sells surplus power. The wholesalerevenue generated from energy trading is an important part of City Light's portfolio. After the 2001 energy crisis, City Light has been riding a wave of surplus energy in all seasons but increasing load growth has begun to absorb the surplus, making the need for new power sources necessary to meet reliability standards. Managing risk in this trading scheme can be a critical tool for City Light's success. This will require preparation from City Light through its employees or perhaps conducting these activities through a third party. In any event, this will be a critical element to the future financial health of City Light.
From a 2007 survey of City Light Employees, it was determined that only 23% believed that decisions were made at the appropriate level. Only 28% reported that their work group had enough employees to do high quality work and satisfy customers. There are also workforce challenges on the horizon. Specifically, City Light will be faced with a large number of long-time employees retiring. How will this be handled to ensure high performance? - A question I must ask.
Finally, City Light will be tested to adhere to I-937, which states that in order to carry out “cost-effective energy conservation” large utilities must acquire 15% of their electricity from new and renewable sources -- such as wind and solar, by the year 2020. I would like to see City Light distinguish itself by fulfilling its mission to develop green alternatives and fully predict the localized impacts at the watershed level arising from global warming.
Superintendent Carracso’s reconfirmation must be a thorough process. A process where all the elements are examined and proper constituent and employee outreach is conducted. That is what I intend to do.
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