Seattle City Councilmember Bruce Harrell

We can’t read the news without reading about our federal budget deficit, state deficit, County’s deficit, and, of course, Seattle’s.

It is my responsibility to demonstrate clear leadership to a Utility that has a budget roughly the size of the entire City – Seattle City Light. Based on the snowcap and the amount of water runoff, we are able to predict the amount of net wholesale revenue. Based on these predictions, we anticipate a revenue shortfall between $40 to $50 million. Rather than allow this deficit to strain our existing resources next year, I have requested that the Utility develop a work plan and a spending pattern that requires it to conduct its operations and budget in alignment with the anticipated revenue. Simply put, do not spend money that you do not have. I need a plan by the end of March.

As you can see by the attached letter, I do not mince words. Without sacrificing our commitment to have a safe and reliable infrastructure and without eliminating our commitment to our environment and efforts in conservation, we simply will have to figure out how to do more with less. (See earlier blog regarding our efforts to reduce overtime at the Utility.)

My goal is to rely on the hard work and the ingenuity of the Utility’s employees to follow the budget constraints that we must operate under. I need this leadership from the Utility. We have to protect our citizens and our ratepayers.

.PDF copy of the letter

As Chair of the Energy, Technology, and Civil Rights Committee (ETC), one area of concern that I have raised is how to deal with the volatility of wholesale power revenue. This is trading activity that of course, comes with some degree of risk. Given the fortunate economies that surrounded City Light’s trading activity in years past, the Council was never really forced to address this issue. Now it is time.

At the ETC meeting on February 3rd the Committee agreed to recommend establishing a $100 million Revenue Stabilization Fund (RSF) for City Light. The RSF has been identified as the best approach to help protect customers and the Utility from the volatility of wholesale power revenue. You may know, the Council passed a Resolution that established transitional financial policies for setting electric rates in 2010 and this RSF is part of the permanent financial policy strategy that I would like to see take effect this spring.

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Below is the press release I issued today (2/17/2010) concerning a new Seattle City Light Review Panel.

FOR IMMEDIATE RELEASE – February 17, 2010

Seattle City Council to Build New City Light Review Panel
Group will help guide strategic planning, financial policies and rate reviews

Seattle – Today Seattle City Councilmember Bruce Harrell announced the City Council is seeking candidates for membership on the new City Light Review Panel which replaces the City Light Advisory Committee. That group terminated on January 31, 2010.

The Council intends to re-define the governance of City Light with the new Review Panel. Previously, the Council engaged two separate committees that worked on City Light issues. The City Light Advisory Committee previously had five members who worked on a wide array of issues with general oversight. The City Light Rate Advisory Committee had nine members who specifically worked on rate issues.

The new Review Panel examines the functions of the former groups and establishes nine members from a cross-section of citizens from business leaders to people on the neighborhood level. Its purpose will be scoped and focused, charged with reviewing and assessing City Light’s strategic plan; assisting in community outreach to discuss the strategic plan; independently assessing the adequacy of City Light’s financial policies and reviewing changes to City Light’s rates.

“The people and businesses demand a utility that represents their interests; cost efficient, reliable power that is environmentally sustainable. To be competitive, the utility must rely on the hard work and ingenuity of its employees, coupled with the needs and demands of its customers. This panel puts that infrastructure in place,” said Councilmember Harrell.

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I am always concerned about saving taxpayer and ratepayer money. Based on my concern relative to City Light’s Operations and Maintenance (O&M) expenditures, I sponsored a proviso in the 2009 budget which limited their Distribution Services overtime expenditure to $3,000,000. The proviso further stated that authorization to exceed this limit will not be granted until the Utility provides Council with a written explanation of how overtime will be managed in the future. In 2009, City Light responded by taking measures to manage and control their overtime spending. The controls resulted in an 18% reduction in overtime spending compared to 2008 and 21% reduction from 2007.

Here are a few practical steps that were taken to improve crew efficiency:

• 1. Limiting monthly mandatory safety meetings to approximately 1 hour
• 2. Eliminating non-essential group meetings
• 3. Reducing training time or combining it with other activities
• 4. Decreasing “loading dock” setup and breakdown time

I applaud City Light and its crews on their efforts to curtail overtime spending and I understand that some level of overtime is necessary. Even with decreased overtime, City Light has done a great job of keeping outages at or below their goal of 1 per month. I will continue to look for ways to create efficiencies at the Utility and keep rates low. Again, these efforts do not exclude our work on conservation, building a reliable infrastructure or deferring to the good judgment of our field workers. It is however, an acknowledgment that City Light must remain a high performing organization and we will continue to look at ways to operate more efficiently.

On January 26, 2010 I wrote a letter to United States Secretary of Commerce Gary Locke explaining my directive to City light to produce a Smart Grid plan for the Council. This plan will be used to help the Council determine the best course for a Smart Grid implementation.

As you may know, President Obama has charged Secretary Locke and the U.S. Department of Commerce to develop a nationwide strategy to build a Smart Grid. I want to make sure our national leadership stays apprised of our activities in Seattle and make sure we preserve our reputation of having a competitive edge here. We must continue to preserve our image as being an innovative, forward-thinking and healthy environment for businesses and families.

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Columbia Ridge Exterior

You may recall in April of 2009 I presented legislation to the Full Council that passed which allowed City Light to enter into a 20 year power purchase agreement with Waste Management Inc. This agreement allows Seattle to receive electrical output and renewable energy credits from the Columbia Ridge Land Fill Gas (LFG) electric generating facility in Oregon. We are operational now, converting landfill gas from our garbage into energy!

Video link: Seattle City Light - Garbage to Power Program

City Light is purchasing approximately 5.78 average megawatts of power annually. This is enough to power over 5,000 homes! This is yet another element of renewable energy City Light can add to its portfolio as is required under I-937. By way of background, there are 509 LFG facilities nationwide and two-thirds of those facilities generate energy. Washington State currently has four operational facilities. As Chair of the Energy Committee, I will continue to add renewable energies to our already-clean hydroelectric power. If we generate energy from waste, it is a win-win for everyone.

Columbia Ridge Generator

I celebrated this partnership of clean power between City Light and Waste Management at a press event. Video link >>>

Following is a press release for that event. Continue Reading »