Governor Gary Locke’s Remarks
Spokane Rotary Club
March 28, 2001

Thank you for that kind introduction.

Well, it's only March and no doubt you're aware we've been hit with more major events in three months than in perhaps the previous three years.

An energy crisis, a drought, an earthquake, and now, a goodbye note from Boeing headquarters.

So I'm glad to have this chance to both update you on what's going on in our state and tell you what I'm doing about it.

I want you to know that I am leading a coordinated effort involving every relevant state agency to guide us through both the energy crisis and the drought we face this year.

I also want you to know these problems, though volatile, have not steered me away from my primary long range focus: namely, a world class education system, an efficient transportation system that moves people and freight, and water laws that address the fact that Washington state is a very different place than it was 100 years ago when our water laws were written.

In fact, to say Washington has changed is a tremendous understatement.

The new census figures that tell us we are dealing with a million more people since 1980 and more growth is projected.

I am developing short and long range solutions. That means addressing what we can do right away and seeing to it we don't find ourselves in these situations again.

This time last year, electricity cost us 16 dollars a megawatt hour. It now fluctuates between $250 to $400 a megawatt hour. At times in January, it was $2,000 a megawatt hour. The price is likely to go even higher this summer and fall -- some say as high as $5,000 a megawatt hour.

You here in Spokane are fortunate because this area is served by two excellent utilities -- Avista and Inland Power and Light. Both have laid the necessary groundwork to provide reasonably stable energy prices.

My energy supply alert made it possible for Avista to extend the hours of operation of its Northeast Combustion Turbine. Instead of serving those homes part of the time, now it is serving them around-the-clock and at a third of the cost of purchasing the power on the open market. Under the terms of the supply alert, Avista has agreed to offset any additional soot it generates, pound-for-pound, through environmental mitigation projects. This 60-megawatt facility generates enough power to serve about 45,000 homes.

Inland Power is a BPA-served cooperative and BPA rates are going to rise dramatically this fall - as high as 266 percent. But Inland last year signed a contract that guarantees its rates over the next five years will not rise nearly as much as they would have. Other PUD's and utilities and their large industrial customers aren't so lucky.

Of course, we're all aware of the energy situation's impact on Washington businesses.

A powerful example of that is the aluminum industry. Nine of the 10 aluminum companies in the region have shut down. That's half of the aluminum produced in the entire country.

As for the future of the Kaiser operation in this area, it needs to be a good citizen and good neighbor. It should not take advantage of publicly financed or subsidized cheap power, i.e., power subsidized by other rate payers - you and me.

Everyone of us needs to be a good citizen and do our part to conserve energy. Some people are saying there's little point in conserving in Washington because BPA will send that electricity to California. That's a myth. The truth: California did receive BPA power. But our irrigators, food processing plants, homeowners and others benefit because California has paid us back at a ratio of 2 to 1.

Another myth: The state is at fault for not approving more energy projects. I want to emphasize, before this energy crisis began, state and local authorities had already approved six new gas-fired electricity plants to be built by private companies that could have provided 3,000 megawatts of power -- enough for more than two cities each the size of Seattle -- had they been built. The state did its part. But it was the companies that chose that chose to delay construction and invest their money in such things as dot.coms and the stock market.

Many more plants are in the siting process or have been proposed. Enough in fact to produce another 4,000 megawatts that would provide power to run an awful lot of irrigation pumps and food processing and storage facilities -- or 3 million households. In fact, several are being built now with power to be available this fall -- Walla Walla, for example.

Working for solutions
We need to look to the Legislature to approve other solutions. I'm working in Olympia to pass energy legislation that will do four fundamental things:

Result in the generation of more electricity.
Result in more conservation.
Reduce our reliance on fossil fuels by using renewable sources -- wind, solar, fuel cells.
And give more financial assistance to low-income citizens.
Let me compliment Spokane Senator Lisa Brown for her own hard in winning legislation to assist low-income citizens paying higher energy bills.

I've testified before Congress. And I'm continuing to press President Bush and the federal government to find a way to give us some relief from the obscenely high electricity prices from which we are suffering.

The Bush Administration doesn't support temporary wholesale price caps. It wants want more oil and gas exploration, but that will take 5 to 10 years to build the pipelines to supply our power plants.

Our businesses and homeowners can't afford to wait 5 to 10 years.

Furthermore, simply drilling for more oil cannot be our sole long-term strategy.

As I mentioned, the legislation I'm proposing would diversify our energy sources. I want us looking ahead to renewable sources such as wind, solar and fuel cells. We have to stop our reliance on only a very few exhaustible sources. Our utilities must not put all our electricity eggs in one basket.

Energy, at least in our region, depends on water -- which leads me to another real challenge facing us… the drought.

We could be facing the worst drought since record-keeping began in 1929. Rainfall and our mountain snow pack are at about 50 percent of normal. Record low flows are being set daily in our rivers. We can't be misled by the little bit of rain in parts of the state the past couple of weeks.

Two weeks ago I announced the drought emergency standing in Alder Lake's dry bed in Pierce County. I was standing on a spot where which normally would have been under 12 feet of water. I could have been standing in any number of dry lakes throughout our state.

The effects of the drought will be felt in different ways and at different times throughout the state. Fortunately, the geology of the Spokane area is thought to provide a water supply resilient to short-term drought. Your water comes from an aquifer. But if current weather patterns continue for a second or third year, the Spokane aquifer will decline and other more shallow water supplies will be affected.

The City of Spokane has a more immediate concern - that rolling blackouts will affect their ability to pump water. And Avista is working on contingency planning.

In the agriculture community, dryland farmers are not reporting drought concerns at this point since they don't irrigate. But farmers planning spring wheat and barley will need timely rains in May and June for their crops.

For now, the biggest impact of the drought is on farmers who irrigate. 75% of the water consumed in our state is for agriculture. The agriculture industry feeds us all and provides thousands of jobs. It's a major component of our state's economy. So when it hurts, we all suffer.

The drought emergency I declared activates $5 million to assist farms, communities and fish. We expect to supplement that with federal funds. In addition to financial help, here's what the drought declaration does.

Water can be transferred quickly and easily from those who have it to those who don't, be they farmers, families or whole communities. And it authorizes emergency water permits -- where available water exists. Let me emphasize that state government cannot erase the effects of a drought.

We need to manage this crisis together. That includes the Legislature. My proposed water legislation will help manage this year's drought, if we can get it passed fast enough. But my plan goes further than that.

I am committed to updating our water laws over the next four years. Updating the laws will streamline our permitting process and stop penalizing those who don't use water -- the so-called "use it or lose it" doctrine.

Updating the laws will ensure we capture and store the normally abundant rainfall and river flows in our wet seasons to help us out in the dry seasons.

These are the essential elements of my long-range effort to see to that we can ride out the worst of droughts in the future.

My Focus
These extraordinary circumstances are just that, extraordinary. But they are part of the circumstances of governing. They cannot and do not deter me from my goals of providing a world class education.

That superior education includes individualized learning for students, outstanding teachers and principals, and the flexibility they need to teach effectively. I will not give up on making schools accountable for their progress.

And I will not be deterred from my goals of providing a transportation system that moves people and freight efficiently.

Perhaps nothing illustrated more urgently our need to get on with our transportation efforts more urgently than Boeing's recent announcement.

Boeing, as do all businesses in the state, needs a fully functioning transportation system. You should know that more than a dozen new ways to reform our system are making their way through the Legislature right now. They include streamlining the building process to eliminate delays in construction and expediting environmental reviews.

The people of Eastern Washington need and deserve to have their products moved over the mountains and out to port without delay, without added cost of transport.

In closing, let me say that the energy crisis, the drought, the best education and fine transportation systems are not political or partisan issues.

They are issues of quality of life. In one way or another, they affect all of us. And in one way or another, all of us can have an effect.

These fresh challenges tossed at us by both man and mother nature make us stronger, force us to find solutions to big problems and demand we become creative.

We are up to these challenges and I look forward to tackling these issues with you.

We are all in this together.

And working together we can keep our farmers and industry in business, keep our salmon alive, meet the electricity needs of our home and provide a pure water supply for our people.
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