News Releases
Office of Governor Gary Locke
FOR IMMEDIATE RELEASE - November 2, 2001
Contact:  Governor's Communications Office, 360-902-4136

Federal energy policy should not supplant state and local regulation, Locke tells FERC

SEATTLE – Gov. Gary Locke today urged the Federal Energy Regulatory Commission (FERC) not to push for changes in energy markets that would diminish the role of states in regulating local electric utilities or managing regional transmission facilities.

At a one-day conference in Seattle to discuss energy infrastructure in the Western states, Locke commended the commission for its action last summer to implement a mitigation plan that helped stabilize the volatile wholesale prices resulting from California’s failed energy restructuring plan. However, he said, the Northwest’s energy infrastructure is fundamentally sound, and cautioned FERC against implementing new governance and market structures to promote new infrastructure development.

“Energy policymaking is not an exercise in abstract economic theory,” Locke said. “Remember that the steps you propose will affect the lives of real people, real families and real communities.”

The governor reminded FERC and its chairman of the risks of energy restructuring to people and businesses. Referring to failed restructuring in California that led to recurring blackouts, volatile wholesale prices and utility bankruptcies, Locke noted that “restructuring energy markets is a grand experiment that can go terribly wrong.”

“In my view, policy should not be focused on energy restructuring, deregulation or competition,” the governor continued. “There is one and only one public policy goal - to ensure reliable and affordable energy for businesses and consumers who depend on it day in and day out.”

FERC has proposed the rapid formation of a West-wide power transmission coordinating organization that would include California and the Southwest. Pacific Northwest regulators and utilities oppose the plan, noting the short timelines for implementation, the inclusion of California where two large utilities are in bankruptcy proceedings, and the unique characteristics of the Northwest energy market.

“There is no apparent crisis in development of new transmission in our region,” Locke said. “I see no need to rush to form new organizations or consolidate all of the Western regions. More than half of our power is hydropower. That means that energy policy in the Northwest is inextricably tied to agriculture policy, environment policy, transportation policy, state-tribal relations, nautical transportation and recreation.

“We don’t fit into a West-wide, one-size-fits-all organizational model,” the governor continued. “We are moving effectively toward needed generation and transmission infrastructure enhancement.”

Locke noted that legislation he supported this year streamlined power plant siting procedures. More than six gas-fired power plants are currently under construction in Washington. The nation’s largest wind project is also under construction in the state.

“Have any obstacles been encountered that require FERC to make major changes in the way it regulates markets? No,” Locke said. “I believe we weathered a crisis this year that resulted largely from California’s failed restructuring efforts and the FERC’s failure to respond quickly last winter.”

“But let’s not pursue further changes in our energy markets unless and until we know with certainty that the benefits outweigh the risks,” the governor added. “Let’s acknowledge that both the states and the federal government have important roles to play in regulating energy markets.”

In response to tight energy supplies caused by California’s failed energy restructuring and this year’s near-record drought, Locke declared an energy supply alert last Jan. 26 to reduce energy use among state agencies and local governments, and to increase supplies through temporary generation or expanded operation of power plants. During the alert, state agencies overall reported using 10 percent less electricity and 20 percent less natural gas through conservation and curtailment.

Exemplary state agency energy savings since January include:
  • A 30 percent reduction in electricity use at the Department of Personnel
  • A 29 percent reduction in electricity use at the Health Care Authority
  • A 25 percent reduction in electricity use at the Department of Agriculture
  • A 17 percent reduction in electricity use at the 33 buildings on the Capitol Campus.

Outside state government, homes and businesses in Washington state realized energy savings of 5 to 8 percent through utility buybacks and government calls for voluntary reductions in energy use.

The Northwest Power Planning Council, which had forecast a 12 to 17 percent chance of blackouts occurring in Washington this fall and winter, improved its outlook and last month announced a less than 1 percent chance of blackouts this winter.

Following the council’s announcement, the governor ended the state’s energy supply alert on Oct. 22.

“We got through this year because we made the necessary sacrifices,” the governor said. “I am pleased that we probably won’t have to worry about blackouts this coming winter. However, we must not become complacent. Despite the end of the energy alert, the public and government should continue to use energy wisely.”
Related Links:
- Federal Energy Regulatory Commission
- Washington's Energy
- Northwest Power Planning Council


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