Centralia City Light Looks to Sell Excess Power; Hoping for Better Market

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To consumers and businesses, unexpectedly low energy prices might feel like a blessing, but they’re leaving the city of Centralia with a case of buyer’s remorse. 

At the advice of the Bonneville Power Association in 2011, the city of Centralia purchased two megawatts of power per year from a nonfederal marketer called the Shell Market for the years 2016 and 2017. 

Thinking new industry customers would raise demand, and energy prices would continue to rise, the city paid about $40 per megawatt hour; a comparably good deal at that time when people were talking about prices as high as $60 per megawatt hour, said M.L. Norton, general manager of Centralia City Light. 

“We don’t know anyone that can build a big load on us in a year or year and a half to use to megawatts,” he said. “The world has changed again.”

At the current market price of $29.02, power is a buyer’s market. But City Light is hoping market conditions will improve and it can lock in a better rate before its September deadline. However, in order for the prices to rise, there would have to be an increase in demand. 

“We’re going to remarket those at a time when it appears best for the market to absorb them,” he said.

The city purchases most of its power from the BPA, which produces the majority of its power through hydroelectricity. 



The city also produces some of its own power at a hydroelectric facility on the Nisqually River. Last month it produced over 8 million kilowatts of power, or about a quarter of the city’s supply. 

Norton said that amount is “outstanding” but serves only as an offset to the energy the city purchases from other sources.

“We hope in the market the price will shift and respond to the warm winter we’re having,” he said. “Less snow might mean less runoff and and thus less power in the summer so we can sell for a better price.” 

A resurgence in demand for power in Europe or China, or more problems in the Middle East could mean a rise in demand as well. 

To help sell the excess power, City Light is working with Northwest Requirement Utilities to monitor the markets and re-sell the power.