Accomplishments and future challenges

By Peter R. Keat

When I first ran for the Board, SMUD was in trouble. In the five years before I was elected SMUD rates had doubled and Sacramentans were very divided about the future of Rancho Seco, SMUD's nuclear power plant. As a small-business owner I knew my experience and knowledge could set SMUD on the right track. Since then the only rate increase I voted for came during the California energy crisis, when the California energy market was manipulated by companies like Enron. And since 2001, I have voted to reduce rates six percent.

There is still much work to be done and I want to continue to serve ratepayers. All Americans are faced with rapidly rising energy prices and SMUD is no exception. SMUD purchases natural gas to power our cogeneration plants and our new Cosumnes Power Plant. The rising price of natural gas is our biggest future challenge and the only reason that SMUD's costs are increasing.

SMUD has received approval for a 1000 megawatt Cosumnes Power Plant. Phase one is under construction and will deliver 500 megawatts to SMUD customers. We are moving forward in phases in order to keep our bond rating high and borrowing costs low. It would be financially irresponsible to borrow hundreds of millions of additional dollars to build phase two now, before we are assured of a market for its electricity.

I pledge to you that I will continue to keep SMUD an electric utility that puts ratepayers first. If you have any questions or comments please feel free to call me at home: 442-7350.