Seattle City Light Submits 2019-2020 Rate Schedule to City Council

Seattle City Light submitted to the City Council today a rate schedule for the next two years that follows the directions Mayor Jenny Durkan gave us during development of our Strategic Plan, which was approved in June.

Mayor Durkan was clear: She directed City Light to identify more areas where we could control costs to reduce the impact on ratepayers. We did just that. Additionally, the mayor expects whomever is selected to become City Light’s next general manager and CEO later this year to continue to look at how to cut costs.

This 2019-2020 rate schedule is designed so that your nonprofit, community owned utility can collect just enough revenue to cover its operating expenses while addressing some of the challenges we face, such as changing energy usage, declining retail energy consumption and an aging workforce.

We will reduce our operations and maintenance budget by 6 percent, beginning with an initial and permanent cut of $18 million in 2019.  Additionally, we will cut capital spending over the next six years by over $240 million – a 9 percent reduction.

We’ll carefully manage these budget reductions to minimize future service impacts and financial risk through a rigorous capital prioritization framework, budget review and monitoring of performance metrics.

Even with such cost-saving measures, our costs to operate and maintain generation facilities, transmission lines and our distribution grid continue to rise. To account for those costs, we will need to make some changes to customer electricity rates.

In our planning process, we had initially proposed a plan that projected a 5.1 percent six-year average rate increase and included a 6.5 percent increase in retail rates in 2019 and 2020.

The plan Mayor Durkan submitted and the City Council approved includes a lower electricity rate path with an average of 4.5 percent increases over the next six years. For a typical residential customer, those changes would amount to an $3.77 per month in the first year and less in subsequent years. Participants in the City’s Utility Discount Program would pay an additional $1.50 per month in the first year. And a small business, such as a coffee shop, could pay approximately an additional $42 per month in the first year.

If approved by the City Council, the rate changes would go into effect Jan. 1.

Seattle City Light Delivers Real Value with Electricity

Seattle City Light delivers reliable, environmentally responsible electricity to all our customer-owners at the best price in any large city in the country.

We’re also helping our customer-owners use less electricity, so they save even more.

Even with the recent rate increase so City Light can invest in reliability improvements, maintenance and other customer service initiatives, it only costs $2.09 for a typical residential customer to power his or her home for an entire day — lights, TV, washing machine, dryer, microwave oven, stereo, charging the cell phone and more.

That’s real value.

You could spend that much on a cup of coffee, an eight-pack of colored pencils, a Betta fish or a 250-count box of toothpicks.

A Betta fighting fish can be energetic, but it won’t power your day.

A cake pop can power up your snack break, but it won’t power your day.

Colored pencils can create powerful art, but won’t power your day.

Toothpicks can be a powerful cleaning tool, but they won’t power your day.

River Conditions Improve, Lift City Light’s Financial Forecasts

Improved water conditions in the rivers that power Seattle city Light’s hydroelectric dams are brightening the utility’s financial forecasts and helping to hold down costs for customers.

“While energy markets and hydroelectric power generation can be volatile, these improved conditions should avoid any rate surcharges for our customers for the foreseeable future,” General MAnager and CEO Jorge Carrasco said. 

The latest federal river flow models project more water being available for City Light’s Boundary and Skagit hydroelectric projects as well as the Bonneville Power Administration dams where City Light gets a slice of the output. More water means more electricity the utility can sell. Even with already low electricity prices dropping a bit recently, the increased power supply should mean more revenue for City Light.

The bottom line is a $2.7 million boost for City Light compared to June forecasts.

City Light now expects to earn $89.4 million from sales of electricity to other utilities, exceeding the amount called for in its 2014 budget. That is a significant change from January, when poor snowpack conditions suggested that City Light might not meet its budgeted revenue, which could have triggered surcharges on our customer-owners.

As a result of the improved conditions, City Light expects to avoid any rate surcharges through October 2017, which is as far as the utility’s forecasts project. Those forecasts are based on average water years in the future.

“To further reduce the risk of customer surcharges, our recently updated Strategic Plan steadily reduces the amount of money we depend on in our budget from sales of electricity to other utilities,” Carrasco said. “The goal is to continue providing low, predictable energy costs for our customers.”

Seattle City Light is the 10th largest public electric utility in the United States. It has some of the lowest cost customer rates of any urban utility, providing reliable, renewable and environmentally responsible power to about 750,000 Seattle area residents. City Light has been greenhouse gas neutral since 2005, the first electric utility in the nation to achieve that distinction.