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South Whidbey dodges electricity price bullet -- for now

"Electricity users all over Western Washington will be getting an ugly New Year's gift in January or February -- electric bills that are 30 to 100 percent larger than those they received just a few months before.But that won't happen on South Whidbey, at least for another year. Puget Sound Energy, the company that provides electric power to Whidbey Island and large portions of Snohomish, Skagit, and Whatcom counties, cannot raise its prices until after Jan. 1, 2002. Well, not much anyway.Two weeks ago, the Snohomish Public Utility District's board of commissioners approved a 38.5 percent increase in residential rates for its customers in Snohomish County and on Camano Island. The increase came on the heels of an electricity crunch caused by heavy usage in California and by reduced hydroelectric power generation in the Northwest. The rate hike went from 5.2 cents per kilowatt hour to 7.15 cents, which translates into an extra $22 tacked onto the average $63 household electric bill in those areas. But just a few miles across the water, Whidbey Islanders will keep the rate they have had for more than a year. PSE will not raise rates on the island in response to the power crunch, said company spokesman Karl Kirn, because the state will not allow it. The only increase will be less than one one hundreth of a cent per kilowatt hour, an increase approved by the state in 1997.Early this year, the company merged with Washington Natural Gas. One of the terms of the merger set by the Washington Utilities and Trade Commission was that PSE could not raise its electric rates until 2002. That would not be much of a problem, Kirn said, if PSE generated enough power to supply all its customers. This winter, however, its 1,123 megawatts of generating capacity is not enough, so the utility has been forced to purchase power costing up to and exceeding 100 times the standard rate of about $9 per megawatt.Thankfully, Kirn said, PSE customers have responded to the power crunch by turning off lights and turning down their thermostats, among other conservation methods. The result has been a marked drop in power demand.We've seen a drop in electricity usage, Kirn said. I think there's going to be a renewed emphasis on conservation. Currently, residential electric customers on Whidbey Island pay about 5 cents per kilowatt hour. As part of the deal PSE made with the WUTC, that rate will increase by 1.5 percent on Jan 1. Kirn said he does not know if that rate will go up further in 2002It's like looking into a crystal ball, he said. The crystal ball is clearer for Snohomish PUD spokeswoman Julee Cunningham. She said it is unlikely that prices will come down again. This winter, her agency has paid up to $800 per megawatt on peak power purchases. This compares to $30 at the same time last year.We anticipate (prices) are going to stay high, Cunningham said.She added that staff at the PUD feels for PSE because the private utility is locked into a rate structure for the coming year. She said it will be interesting to see what the company does when 2002 rolls around.It's an ugly time in the power industry, she said.Kirn did say that there is hope on the horizon. He said a number of West Coast power plants will go on line in the next few years and should fill a 3,000 to 4,000 megawatt shortfall in winter energy supplies.PSE will make an increase in part of its energy business. Natural gas customers will pay 25 percent more for their gas due to increases in the gas market. Kirn said the increase is a cost adjustment that will not add to PSE's bottom line. "

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