On October 31, 1994, Gary Zarker takes over as Superintendent of Seattle City Light. Mayor Norm Rice nominated Zarker after the resignation of Superintendent Roberta Palm Bradley, who had the job for two years. Zarker will serve until spring 2003, when he withdraws his name for reconfirmation amid criticism for City Light's response to dramatic and artificial spikes in wholesale energy prices in 2000 and 2001.
In 1986, Mayor Charles Royer named Zarker superintendent of the Department of Engineering. In that position he implemented numerous reforms including a cost-saving reorganization and better customer relations. He received particularly high praise for his work on improving minority hiring in the department, despite budget cuts.
Gambling on the Market
Zarker followed four City Light superintendents in 15 years. Three were either dismissed or resigned after relatively short tenures. Zarker guided the utility through a constantly shifting energy supply landscape. In 1995, City Light began buying electricity off the open market, which was cheaper than power supplied by the Bonneville Power Administration.
Under Zarker, City Light established a policy of Salmon First, spending money and adjusting operations to benefit endangered fish runs on the Skagit, Cedar, and Tolt rivers. In 2000, City Light sold its portion of the coal-fired power plant in Centralia and contracted for power from a more environment-friendly gas-fired plant in Klamath Falls, Oregon.
Sunk by the Perfect Storm
Zarker presided over the utility during the severe distortion of western energy markets following California's deregulation of electric generation. In 2000, power shortages in California drove up the cost of power, until the utility ended the year $253 million in debt.
This "perfect storm" in wholesale prices was caused in part by manipulation by Enron and other suppliers, and had not been predicted. It caught City Light when it was most dependent on the open market due to the loss of Centralia Steam Plant power and a reduced allotment of Bonneville Power Administration energy. The cost of keeping the lights on led to a cumulative 58 percent increase in consumer rates over two years and pushed City Light debt to a record $1.7 billion.
Although these policies had been approved by the City Council, Zarker and his management team became the focus of criticism from the Municipal League, independent auditors, and Council members. When a preliminary committee vote made it clear that Zarker lacked the votes needed for reconfirmation to a new term as City Light Superintendent, an angry Mayor Greg Nickels (b. 1955) withdrew his name on March 7, 2003. He declared, "I am deeply disappointed in the council's decision. ... This decision was wrong for the utility, wrong for our ratepayers, wrong for businesses and wrong for the city."
