A few months ago, the idea that electric companies wouldn't be able to meet demand sounded preposterous. But on the evening of January 18, the lights went out in San Francisco. "Black Wednesday" became a milestone to American consumers—much like the first time gas prices exceeded $1 a gallon in the 1970s' energy crisis.
Northern California's surprise conversion to candlepower coincides with a slew of falling stereotypes. High-technology and Internet industries, once assumed to be clean and eco-friendly, have been fingered as major new drains on the energy grid. Deregulation has proven that, despite some philosophical objections to the old publicly controlled electricity monopoly, the private market can do worse. Washington Governor Gary Locke acted as a decisive leader, proposing a package of legislative fixes for our state's energy market on January 24. (OK, the ever-cautious Guv isn't recommending drastic steps, but remember it was broad, sweeping changes that got California in the soup to begin with.)
Electricity shortages are a big deal. If you dial your phone and get "all circuits are busy," the system has failed, but it's just another bad day for the phone company, says Seattle City Light Superintendent Gary Zarker. Turn on the light switch and nothing happens, and to most consumers, that's an outrage. And with California's two major electric utilities more than $12 billion in debt to power suppliers, the Golden State's electric woes are only beginning.
To the average Seattle resident, things might not seem so rosy here either. Electric bills already include a 10 percent surcharge, and the Seattle City Light Council added another 18 percent on January 29. The city still faces a $340 million tab for unanticipated energy costs over a one-year period. But assuming the California electricity crunch is the opening thunderclap in a coming storm of electricity shortages and soaring costs, Washington state finds itself well-situated to ride it out. In fact, the crises down south might be the best thing that could have happened to this state's energy situation. Here's why:
DEREGULATION IS DEAD
State Senator Bill Finkbeiner, a Redmond Republican who led the unsuccessful push to pass a Washington deregulation bill in the 1997 session, says the California situation will cool lawmakers' jets for years to come. Factor in the narrow partisan split in the Legislature and be assured that Washington will remain one of the states with the wisdom to let California's deregulation scenario play out before making sweeping changes in electricity delivery.
This latest deregulation disaster began in 1992, when Congress lifted regulations on the wholesale electric market. Some 23 states have followed with their own deregulation legislation. As California legislators were approving drastic system changes in 1996, business owners in Washington watched approvingly. Frustrated by having to buy electricity at state-mandated prices when cheaper power was available on the open market, a consortium representing the state's major businesses led the push for deregulation. "When the issue first came up, you could hardly find anyone in the region who didn't think it was inevitable," says Zarker.
The issue came to a head in 1997. "I don't know how near we came [to passing a bill]," says Finkbeiner, who narrowly avoided being the Father of Washington Electricity Deregulation. "I think Washington state has a lot of unique issues that kept that from happening."
A cadre of Seattle-area critics fought the state's urge to make a snap decision on deregulation. City Light's Zarker, City Council member Margaret Pageler, state Representative Erik Poulsen, and even officials of Puget Sound Energy, the privately owned utility that serves many of Seattle's suburbs, pointed out that this state had far more to lose than to gain from monkeying with the system. Pageler, then chair of the Council's Utilities Committee, began her stump speech against deregulation as follows: "When I think about deregulation, I think about Valu-jet; I think