Deseret News, Friday, February 02, 2001

Energy outlook growing darker

Leavitt to share his concerns with other Western governors

By Brice Wallace Deseret News business writer

Gov. Mike Leavitt's plans to discuss energy problems with his Western colleagues Friday were prefaced with his warning that energy problems are likely to worsen.

"This problem has not yet matured," he said during a news conference about energy Thursday. "As difficult as it seems right now, we have not reached the peak in consumption." Summer weather, with heavy use of air conditioning placing a burden on electricity supplies, "will bring an entirely new perspective to this."

Leavitt was to join Western governors today in an energy summit in Portland, Ore. Earlier this week, he called together government and energy company leaders to start forming plans for a collaborative effort to solve current energy problems and update the state's energy policy.

The governor noted Thursday in San Jose, Calif., that one cause of the current situation is that water usually accumulated behind hydroelectric dams in the Northwest in winter has instead been at low levels, leaving the entire West at risk of not having enough electricity to meet the peak demands this summer.

"We'll need a three-month plan and a three-year plan," he said of Utah's energy efforts.

Leavitt also had bad news for ratepayers already facing two utility rate increases. Questar Gas has received approval on an interim basis for a $167 million increase, boosting the average customer bill by 29 percent.

The Public Service Commission is considering a similar interim increase for electric utility PacifiCorp, which is asking for $142 million hike equating to a 19 percent increase for the typical homeowner.

"Ultimately we cannot shield the ratepayers from the cost of power," he said. "Ultimately that will come home."

During the meeting with Western governors, he said, he would advocate an effort to pin a number to indicate how much electric supply is needed in the future. "I believe that can and should be done within the next 30 days," he said.

He also will push for the formation of regional transmission organizations that would allow different parts of a region to make load-handling adjustments without affecting other grids and otherwise coordinate electrical transmission.

"I hope that we will come away with a series of action points that will begin to unify us as a region," he said. "We cannot in the long term have an ideal energy circumstance without the entire region having a steady supply of power."

Availability of energy is a key, he said. "Our highest priority is not price. Our highest priority is availability. . We do have, in fact, low prices, but it isn't our highest priority."

The governor also is looking to find ways to quicken the permitting process for new energy generation facilities by having regulators make decisions in months instead of years. "The idea is not to shortcut the system but to fast-track it," he said.

While Utah has put on hold any electrical deregulation move and is stressing energy conservation, other Western states are responding to the crisis in varying degrees. For example, Washington Gov. Gary Locke has ordered a 10 percent reduction in electricity usage and natural gas consumption statewide and is spending $100,000 in emergency funding to finance a state investigation into recent rate increases.

Washington shelved its deregulation plans two years ago, and Colorado, Wyoming, Nevada and New Mexico are all reconsidering whether to move ahead with their deregulation plans.

E-MAIL: bwallace@desnews.com

-- Swissrose (cellier@azstarnet.com), February 03, 2001