| Seattle City Light
Western Energy Prices Spiking, But City Light Well Supplied
|For Immediate Release:
2/25/2003 12:00:00 AM
|For More Information Contact:
Scott Thomsen (206) 386-4233
SEATTLE- Wholesale electricity rates are rising in the Western United States this week, holding above $50 per megawatt-hour and spiking into the $90 range at times on the spot market.
"We haven't seen prices like this since the tail-end of the energy crisis in 2001," said Seattle City Light Superintendent Gary Zarker. "This time, however, prices seem to be dictated by legitimate supply and demand issues rather than market manipulation."
Cold weather and low rainfall appear to be making Northwest utilities nervous about power supply. They are willing to pay higher prices to secure the energy they need to serve customers. Higher prices for natural gas, which fuels a large number of combustion-turbine generators in the West, are also contributing to the electricity price spike. Wholesale natural gas shot up 38 percent yesterday on the New York Mercantile Exchange, rising $2.53 to $9.137 per British thermal unit.
"Power supply is not a problem for City Light," Zarker said. "Our resource portfolio is performing as planned, and we have been careful with the water we have stored at Ross Reservoir. In fact, despite low water, we have surplus power to sell, and revenue from the higher prices will help us pay off our energy crisis debt."
City Light's resource portfolio was developed to produce surplus power even in very poor water years, such aS the one the Northwest is currently experiencing. Precipitation and snowpack in City Light's two major watersheds - feeding dams on the Skagit and Pend Oreille rivers - are about 70 percent of normal. Precipitation at City Light's Diablo Dam on the Skagit is just 39 percent of normal for the month of February.
City Light gets about half of the power it needs from its own dams. About one-third comes from the Bonneville Power Administration. The rest is secured through contracts with a variety of other sources.
City Light earned about $100 million on surplus energy sales in 2002. The utility is waiting for a clearer price trend before making a revenue projection for 2003.
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