Boeing finds power bills a real shock

2000-12-14 by Chris Genna Journal Business Reporter

The recent electrical power emergency had rogue wits at The Boeing Co. asking to ``Break out the candles'' and, more seriously, wondering about production interruptions from brownouts.

Production was never affected, though the crisis prompted fliers and memos to managers, said Boeing spokesman Bob Jorgensen, to ``redouble our conservation efforts'' that already have seen the company reduce its energy use by 16 percent.

The electrical emergency in the Northwest ended yesterday morning, after moderating temperatures reduced demand on a stressed system, the Associated Press reported.

But the fallout doesn't end there for a big power consumer like the Northwest's largest employer. ``We're paying in one day for electricity what we used to pay in a month,'' Jorgensen said.

Boeing buys power from a number of suppliers, spokesman Dean Tougas said, but its Bellevue, Renton, Longacres, Auburn and Frederickson facilities get it from Bellevue-based Puget Sound Energy under a contract that calls for Boeing to pay rates that fluctuate daily.

Five years ago, Boeing, Intel, Georgia-Pacific, King County, the Port of Seattle and other industrial users got approval from regulators to break away from Puget Sound Energy's fixed prices and buy electricity at market prices.

It was a great deal until this year, The AP reported, when the market zoomed upward. A megawatt-hour that sold for $27 a year ago hit $781 on Friday and was predicted to jump to the neighborhood of $3,000 this week, Melinda Davison, a Portland, Ore.-based attorney for the industrial customers, told The AP.

Boeing joined in a complaint Monday to the Washington Utilities and Transportation Commission that accused Puget Sound Energy of reaping huge profits by selling power at outrageous market prices even though it bought or produced the electricity for far less.

Yesterday, Puget Sound Energy issued a statement saying Boeing and the others were trying ``to back out of an agreement they demanded be put in place in 1996'' and added, ``The actions of the complaining customers are an obvious attempt to make all PSE customers pay for the failure of those customers to properly manage their energy risks,'' said Tim Hogan, the utility company's Vice President, External Affairs. ``It's outrageous.''

Tougas said the utility's scathing statement was ``reactionary'' and didn't address Boeing's main point: The planemaker agreed to pay market rates based on the Dow Jones Mid-Columbia Index, a daily quote of electrical prices on the open market. But lately, Tougas said, the index -- and Boeing's power bills -- have been going up faster than the cost on the open market.

The three-member commission ordered its staff to look into the matter this week and report its initial findings at the panel's meeting Wednesday.

http://www.eastsidejournal.com/sited/retr_story.pl/36627

-- Martin Thompson (mthom1927@aol.com), December 14, 2000