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Home / Washington Business - July/August 2004 / Utilities Execs Looking Beyond Hydroelectric |
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Utilities Execs Looking Beyond Hydroelectric |
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Written On: July/August 2004 |
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Editor’s Note: Washington Business Magazine’s Paul Schlienz recently spoke with the presidents of three investor-owned utilities — PacifiCorp’s Judi Johansen, Puget Sound Energy’s Steve Reynolds, and Avista Utilities’ Scott Morris. Here are their thoughts on the challenges facing our region’s investor-owned utilities.
"We are in a period where we need to make significant investment to update the infrastructure and to keep up with growth and to do that in a cost effective way. I think the combination of the big investment cycle we’re in and the need to find some regulatory certainty is really key. The regulatory certainty we need is not only at the state level but at the federal level. There are lots of policy issues that have remained unresolved. It’s a challenging thing for us to raise the capital and to feel confident in the investments we’re making."
“One area where we don’t have resolution between state and federal regulators is over how we proceed in investment in high voltage transmission going forward. That’s a huge area for the industry. The states and the federal government are at a jurisdictional loggerhead. The industry is caught in the middle of that turf battle.”
Judi Johansen, President
PacifiCorp, Portland
Judi Johansen has been president of PacifiCorp since 2001. Prior to joining PacifiCorp in 2000, she had a distinguished career at the Bonneville Power Administration where she served in several positions, including chief executive officer. In addition, Johansen was vice president of business development for Avista Energy. As an attorney, Johansen has specialized in issues relating to energy and natural resources. In 2003, the Oregon Legislature confirmed her appointment by Gov. Tom Kulongoski to the Port of Portland Commission. Johansen holds a Bachelor’s degree in political science from Colorado State University and a law degree from the Northwestern School of Law at Lewis & Clark College. A Colorado native, she lives in Portland with her husband and children.
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"I think the biggest challenge is securing long term, low cost energy supplies for the region. We see more demand already, and we see a shortfall of our own ability to serve the growing demand even now when people say we’re still in a recession."
“We are diligently pursuing two strategies. One, we’re trying to rebuild our financial health so we’re financially strong enough to make the investments that we believe we will need to make to acquire gas and electric supplies for the long term.
“We are committed to becoming a financially strong utility that provides great service at low cost. We’re continuing to find those low cost alternatives. We’ve just purchased one gas-fired electrical generation plant near Tacoma.
“Every two years we’re going to need to buy 200 to 300 more megawatts of power generation. We want it to be low cost, and we want to be the best service provider at the lowest cost in the state.”
Steve Reynolds, President
Puget Sound Energy, Bellevue
Steve Reynolds brought a wealth of experience in the energy field, dating back to the 1970s, when he became Puget Sound Energy’s president and chief executive in 2002. He has held top level positions with Pacific Gas & Electric and runs his own energy consulting firm, Reynolds Energy International. In addition, Reynolds has served as a trustee for the U.S. Federal Trade Commission, overseeing compliance in a significant energy merger. He holds a Bachelor’s degree in economics from the University of California-Berkeley and an MBA from the University of Oregon.
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"First of all, in the short term, weather and water have obviously been our biggest challenges. Washington has been blessed with hydroelectricity, which is one of our main areas of advantage in the energy field. When we have good water years, we really enjoy it. When we have less than normal water years, it puts a lot of generation pressure on all the investor-owned and public utilities. Even though we’re 85 or 86 percent of normal this year, it’s less than what we had hoped it would be. It adds pressure to find other short-term resources.”
“Number two, I would say it’s really the volatility of natural gas prices in the region. We continue to see price spikes. Natural gas prices are the opposite of what the fundamentals are. There’s plenty of storage, and there doesn’t appear to be any transmission bottlenecks that are significant enough to create the price hike we’re seeing in natural gas. We know some of it has to do with the price of crude, but in the long term I think the region will continue to try to find ways to hedge that volatility for our customers.”
“The third thing is if the economy recovers in Washington and hopefully more jobs are created and more businesses come to life, there still is going to be a need for new energy resources in the future. We need to look at how the new resources are going to look and figure out how we’re going to get them to be cost effective.”
Scott Morris, President
Avista Utilities, Spokane
Before Scott Morris became president of Avista Utilities, he served as general manager of Avista’s marketing division in southern Oregon and northern California. Morris currently serves as board chairman of the Spokane Regional Chamber of Commerce and serves on the boards of the Northwest Gas Association and Providence Services of Eastern Washington. He is a member of the Gonzaga University board of regents.
Morris holds bachelor’s and master’s degrees from Gonzaga. A Spokane native, he is married and has four children.
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