Debra Smith brings years of experience in finance, risk management, and running utilities to her current role as the general manager and CEO of Seattle City Light. The utility serves a population of nearly a million and gets 86 percent of its energy from hydropower. Seattle City Light is amid a major push toward electrification, which will help decarbonize the local economy and transportation system while also improving the utility’s finances over the long term. Meanwhile, like many utilities across the nation and the world, it is experiencing major challenges related to supply chain disruptions and labor shortages created by the COVID‑19 pandemic and geopolitical shocks such as the war in Ukraine. In this interview, Ms. Smith tells us about how Seattle City Light is facing up to these challenges and planning for the future.
Hydro Leader: Please tell us about your background and how you came to be in your current position.
Debra Smith: I usually say that I fell into this industry quite by accident. My background is in finance. I worked for a bank and then for a small computer company in Eugene, Oregon, for 9 years. I also spent a year as a stay-at-home mom of three little kids. I thought I wanted to go back to school, and I applied to get my master’s at Oregon. Meanwhile, my family said, “You’re really not a very good stay-at-home mom. You should find something to do.” One day, another mom told me that her husband’s employer, the Eugene Water and Electric Board (EWEB), was hiring for a job share in accounting. I applied and started at EWEB in January 1996 as a senior staff accountant. Power risk management began to emerge as an important area of focus, and since I was only working half time in accounting, I was able to step up and learn new skills. EWEB had a trading floor, but at that time, most trading was done through bilateral agreements. As the energy markets became mature, power risk management became essential, and I had the opportunity to help develop the utility’s first risk management policies. Eventually, a job in traditional risk management opened up, and we were able to combine the role with power risk management. That was my turning point.
I moved into leadership at EWEB and spent 17 years serving in a variety of positions, starting as a staff accountant and ultimately serving as the assistant general manager. I knew I wanted the opportunity to lead at the highest level. I applied and became the general manager of a small transmission-and-distribution-only utility on the Oregon coast, Central Lincoln People’s Utility District, where I spent 5½ years. It was an amazing experience, and we accomplished a great deal, but it was clear that the organization needed to slow down and allow roots to grow under the changes we’d made. I, on the other hand, wasn’t ready to rest, and I started to look around at other opportunities.
At that point, a recruiter hired by the City of Seattle reached out to me, and the organization turned out to be a great fit. During my time at EWEB, I had served on the executive team and had been responsible for the environmental department, which included relicensing. EWEB was committed to energy efficiency and was a leader in providing low-income assistance programs, both things that Seattle stood for. In my initial conversations with Seattle, it became clear that my experience at EWEB would be directly applicable to a role there. I knew it was going to be a big scale-up, but I was confident that I could do it. I have been the general manager and CEO of Seattle City Light since October 2018.
Hydro Leader: How large is Seattle City Light’s service area, and how many people do you serve?
Debra Smith: Our service area covers 131 square miles and has a population of 955,116. We have 426,359 residential customers and 51,219 commercial and industrial customers.
Hydro Leader: What is the source of your electricity, and what portion is provided by hydropower?
Debra Smith: Our current power mix is 86 percent hydropower, 5 percent wind, 5 percent nuclear, 1 percent biogas, and 3 percent unspecified power from wholesale markets.
Hydro Leader: Please tell us more about Seattle City Light as an organization.
Debra Smith: One of the attractive things about Seattle City Light is the caliber and the quality of staff. I work with people who are well educated, great at their jobs, and committed to public service. When I came on, however, I noticed that the organization was not rowing together.
There were lots of good things happening in disparate ways, but it was neither a team-focused nor a customer-focused organization. It became clear that if we were going to change the nature of our relationship with customers, we were going to have to lean into creating an environment in which employees felt safe and supported.
For as long as I’ve been in this industry, we’ve talked about the changes that were coming. We now know that in fact, we are in the midst of a major transformation. One of our lead business strategies is to create our energy future and to do so in a way that delivers on customer expectations. We are working to do both at the same time that new technologies are emerging. The sweet spot is to plan for the future in a way that aligns customers’ wants with our vision for the future. It’s tricky at times.
Hydro Leader: Please tell us about your experience with electrification.
Debra Smith: When I got here, electrification was coming, but until the transportation electrification legislation was passed in Olympia, we weren’t equipped to develop or roll out specific programs. Some folks in the industry call Seattle the grandfather of energy efficiency, which is great. However, our cumulative investment in conservation also meant that loads were decreasing despite increasing customer counts and rapid growth in the city of Seattle and the surrounding communities we serve. Our load curve had been heading south for some time, which wasn’t sustainable. We were raising rates 5–6 percent every year because we needed to cover the increasing costs of labor and supplies but were having to spread those costs over a smaller number of kilowatt-hours. Our rate trajectory definitely didn’t align with our customers’ expectations. The State of Washington and the City of Seattle have both established building performance standards and requirements for new construction. Those new loads are critical to our ability to flatten the curve of our rate trajectory. We are all in on electrification because that’s what is going to allow us to continue leaning into energy efficiency. Our integrated resource plan will be submitted to the Washington Department of Commerce by the end of the year, and for the first time in a very long time, we have a plan that demonstrates a future need for new resources. We project that by 2027–2028, we will need additional resources to meet the electrification load that we see coming our way.
The Pacific Northwest is blessed with abundant hydro resources. This makes the transportation sector, rather than electricity, the region’s largest contributor to greenhouse gas emissions, at about 45 percent. Therefore, we’re very focused on transportation electrification. We’re looking beyond personal vehicles to transit, ferries, commercial fleets, medium- and heavy-duty trucks, ride-share vehicles, and micromobility options such as e-bikes and scooters. We recently launched a pilot program to install public level 2 electric vehicle chargers at curbside locations. In a dense city like Seattle in which many residents live in multiunit dwellings without off-street parking, this is a game changer. Unique to the program is that we’re asking residents to submit requests to determine where it makes the most sense to locate these chargers.
Hydro Leader: What supply chain disruptions have you been dealing with, and how have you responded?
Debra Smith: Supply chain disruptions are a huge talking point and area of concern at almost every national or even regional meeting that I attend, whether in person or remote. These disruptions are affecting every industry, and energy is no exception. We started to recognize the problem when the lead times for some of our commodity-like products, such as transformers and cable, started to grow. We began to see early signs of disruption early in 2021 as activity levels in Seattle began to rebound from the pandemic; by fall 2021, the effect of delays was becoming noticeable. By the start of 2022, we had significant concerns. The global disruption caused by the COVID‑19 pandemic has contributed to the scarcity of goods in many ways, including through a lack of raw materials and a shortage of labor. The labor market is tight, which affects transportation, manufacturing, and even ports, as we’ve all seen. City Light currently has a 15 percent vacancy rate, so we certainly understand how similar vacancy rates at various points along the supply chain create issues for the folks who supply us with critical products. The war in Ukraine has further exacerbated these issues. For instance, I worry that more difficult access to the raw materials essential for battery production will slow our nation’s progress toward decarbonization goals. Ukraine is a primary source of lithium, after all. Our industry is scrambling to find alternative sources of raw materials and to bring the manufacture of some of those products home.
Hydro Leader: What sorts of price increases have you seen?
Debra Smith: Our price increases have ranged anywhere from 6 percent to 90 percent. We submit a strategic plan to the city council every 2 years that includes a 6‑year rate trajectory. Our previous strategic plan projected rate increases of 3.7 percent for 2023 and 2024. In the plan update that’s just been completed, we’ve had to increase those projected increases to 4.5 percent to help cover the price inflation we’re experiencing. We’re also just absorbing a good chunk of those increased costs. We’ve had to look strategically at all our work and ask, “Are there ways in which we can meet our developers’ and customers’ timelines, even if it might mean temporary deviations from our previous standards?” We are also committed to looking for alternative ways to meet our own construction needs. For example, we are amid a multiyear accelerated overhead pole replacement project. Typically, when we replace a pole, we always hang a new transformer on it, but to save costs, we are rehanging the cans. In the future, we’ll wind up going back to replace some of these transformers at additional cost, but rehanging them now allows us to keep our workforce engaged and on track to meet our pole-replacement goals. We’ve also created an internal task force, implemented our incident command structure, and asked one of the best and brightest distribution engineers to lead the effort. He has a core team with folks from procurement, contracting, communications, operations, customer design, and engineering. It’s an all-hands-on-deck effort. In addition, and because of our 15 percent vacancy rate, City Light is using more contractors to ensure that customer work is at least designed and that work packages are ready so that as materials do become available, we can get to work right away.
Hydro Leader: Would you tell us about your current relicensing work?
Debra Smith: We are currently relicensing one of our major projects, the Skagit River Hydroelectric Project, a series of three dams that provide 20 percent of City Light’s power. The current license expires in 2025. Renewing the license means reviewing the safety, cost, environmental, and cultural impacts of the continued operation of the project. From 2020 through 2023, we are collaborating with 38 partner organizations and consulting parties, including federal and state agencies, Indian tribes, and nongovernmental organizations, to gather the information needed to ensure the protection of natural and cultural resources within the Skagit Project area for the duration of the new license, which will last 30–50 years. The license will include requirements to protect the environment and the culture of the watershed.
Relicensing often involves rewinding and sometimes even replacing turbines—projects with long lead times that involve a significant amount of raw material. We are several years away from implementation, so fortunately, supply chain disruptions are not an issue at this time. Nonetheless, I worry. I know there are many hydro projects due to be relicensed over the next 10 years. I hope that we as a country work through the supply chain issues before these projects are in the implementation stage.
Hydro Leader: What is your vision for the future?
Debra Smith: At the beginning of the pandemic, we brought together a group of City Light’s most innovative employees and asked them to figure out what it would take to make us a utility of the future. We called the resulting portfolio of projects Utility Next 2.0, and my hope was that we’d be ready as an organization to pursue federal stimulus–type funding when and if it became available. Implementing that portfolio of projects will bring together the two priorities I discussed earlier— creating our energy future and improving the customer experience. That’s my vision for the future. Having a smart, resilient, interactive grid, compared with what we have now, will be like going from a flip phone to the latest model of the iPhone. The flip phone lets us make calls, and that’s about it. The apps available for smartphones help us manage every aspect of life. I believe a smart grid will do the same for civic life, and I can’t wait to help make it happen. Smart electrification is about embracing technology in ways that improve our quality of life: Managed charging, integrated smart appliances, and even vehicle-to-grid technology all require a modern grid. Seattle City Light is all in on that effort, and we are focused on carrying it out with an equity lens. We are committed to ensuring that folks who have traditionally had to do more with less because of institutional racism and bias will be the first people to receive the benefits of our portfolio and our grid modernization efforts.