Costs Rise for Future Denny Substation

Design changes added in the permitting process, higher prices for electrical equipment, a construction delay and additional soil cleanup have increased the anticipated cost of Seattle City Light’s future Denny Substation by $27.4 million, the utility announced today.
Image of proposed Denny Substation design.

The proposed Denny Substation design.

Design changes added in the permitting process, higher prices for electrical equipment, a construction delay and additional soil cleanup have increased the anticipated cost of Seattle City Light’s future Denny Substation by $27.4 million, the utility announced today.

Higher costs for the substation will not result in higher electricity prices for City Light customers. City Light is reprioritizing other capital projects within the overall Denny program to stay within the rate path called for in the utility’s six-year Strategic Plan.

“Building something as complex as a substation in a fully developed urban area is challenging and often requires adjustments along the way,” City Light Interim General Manager and CEO Jim Baggs said. “At the 30 percent design phase, the substation project was expected to cost $173.6 million. We have now completed the 90 percent design phase and the updated estimate is $209.5 million. The utility is looking to offset some of this increase with $8.5 million to be realized by selling part of the land that has no utility function after construction.”

Several factors are adding costs to the project.

Revisions to the design of electrical equipment to adjust to new industry standards and safety regulations were required. Subsequently, bids for some of the electrical equipment came in higher than expected based on an earlier market survey. During the environmental cleanup of the construction site, crews had to remove more soil contamination than initial testing indicated. During review by the Seattle Design Commission, enhancements for community spaces at the facility were required for approval. And a seven-month delay in construction added to the utility’s financing costs.

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.