Seattle City Councilmember Bruce Harrell

Throughout the last 18 months, I have observed (and participated) in the manner in which the City Council approves departmental capital improvement plans. While this process involves many city departments and devoted employees who work long hours developing thoughtful plans, I still questioned whether an agreed on process or criteria was used when evaluating such plans. In Thomas Friedman’s book “Hot, Flat and Crowded,” he talks about how certain organizations are notorious for inflating their capital improvement plans. I wanted to make sure we had in place complete transparency and consistency when we evaluated such large expenditures of taxpayer money.

In an effort to make informed decisions about spending and improve communications between Seattle City Light and the City Council, the Council will engage the services of Energy & Environmental Economics, Inc. (E3). E3 will develop guidelines to help analyze large electric transmission and distribution projects, as well as improve transparency between City Light and the Council. The purpose is to ensure that when City Light seeks approval for proposed capital projects, the information is sufficient for the Council to conclude that the project is both needed and reflects the best option to address the identified issue.

As discussions about budget deficits increase, I believe it is critical that expenditures be justified and necessary. City Light’s Capital Improvement Program (CIP) is a $1 billion document. It is laid out in six-year blocks and updated yearly. Taking this into consideration, these guidelines will give the Council the ability to ensure that growth is done in a smart manner and that a proper and thorough analysis of large projects has been conducted. The end result will be the development of spending efficiencies that can be passed on to you: the ratepayer, owner and customer.

To help move this effort forward, I have submitted a letter to Seattle City Light Superintendent Jorge Carrasco. The text of the letter follows.

June 2, 2009
Seattle City Light
Superintendent Jorge Carrasco
700 5th Avenue, Suite 3200
PO Box 34023
Seattle, WA 98124-4023

Dear Jorge:

You may know that the Seattle City Council has retained Energy & Environmental Economics, Inc. (E3), to help develop guidelines for analysis of large electric transmission and distribution projects by Seattle City Light. E3 has been contracted because of Council’s desire to improve communication with City Light. The goal is to ensure when City Light requests approval for a proposed project that the information it presents is sufficient to allow the Council to conclude that the project is both needed and the best option to address the identified issue. The guidelines will be expressed in a document which lays out specific work items City Light must produce to obtain Council approval of a project.

The contract with E3 has three major components:

• 1. Conduct a survey of utility practices in other jurisdictions about supporting investment decisions;
• 2. Develop a document which describes the results of the survey and highlights some of the best practices from other jurisdictions; and
• 3. Work with the Council and City Light to develop an agreed upon set of guidelines that will meet the Council’s needs without placing burden on City Light.

The survey of other jurisdictions has been completed and a draft of the best practices has been developed. E3 believes the guidelines that result from Task 3 (above) will be most useful to the Council and City Light if they are developed collaboratively with management and staff at City Light.

The next step is for E3 to meet with key City Light and Council personnel to review and refine the guidelines. I am seeking your help to coordinate key City Light representatives for this effort. To help move this effort forward and coordinate meetings, I suggest that your staff work with Michael Jerrett and Tony Kilduff.

Thank you and I appreciate your help on this very significant effort by E3.

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