The New Century: Moving into leadership on green energy, conservation
Thanks to months of planning and preparation, the dreaded Y2K bug did not affect SMUD's systems. But just in case, several hundred SMUD employees were on hand New Year's Eve to keep all systems running smoothly.
The real crisis was one that no one expected: State-mandated deregulation of the electric utility industry, and the resulting power shortages, soaring wholesale energy costs and rotating outages.
Following deregulation, market chaos enveloped not just California but much of the West. Artificially tight power supplies and congested transmission sent electricity prices through the roof. In short order California's biggest investor-owned utilities were on the brink of bankruptcy and Californians were experiencing their first blackouts since the end of World War II.
SMUD found itself tied as never before to statewide difficulties in maintaining reliable electricity supplies, and in 2000 was forced to shut down power in rotating outages on seven days. By the following year, SMUD was putting plans into place to make the utility its own control area, thereby pulling away from requirements to shut down power to customers in all but extreme cases of statewide grid instability.
The terrorist attacks in New York in 2001 caused heightened security at SMUD's facilities and offices. Some employees went off to war, and SMUD extended help to their families.
By mid-decade. SMUD had paid off the last of the Rancho Seco plant investment and was dismantling the reactor building equipment and spent fuel pool and started construction on a new 500-megawatt gas-fired plant on Rancho Seco property. The utility had replaced hundreds of thousands of feet of underground cable to further improve reliability, applied for a renewed 50-year license on its 688-MW hydroelectric generation facilities.
Other agencies, such as the Western Area Power Administration, have joined SMUD's control area. Credit ratings continue to reflect SMUD's strong financial position.
In 15 years, SMUD has raised rates only two times -- during the deregulation energy crisis and following the jump in natural gas prices in the wake of Hurricanes Katrina and Rita. New renewable generation is set to open this year --expanded wind facilities in Solano County.
SMUD rates are nearly 30 percent below neighboring utility rates. Reliability is excellent.
And when it comes to customer service, SMUD customers voted the utility number one for five out of the last six years. SMUD's plan is to hold the course regardless of the uncertainties of the marketplace.