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City Council approves City Light rate increases in 2023, 2024

After deferring or reducing increases in recent years, utility responds to pressures of inflation, growth and new technologies.

Seattle City Light is a public, not-for-profit utility, and we make decisions for the long-term benefit of our community and customers. We work hard to keep rates low and predictable for all our customers, and to provide individual assistance to those who are struggling. In response to the pandemic, we eliminated the planned rate increase in 2021 and reduced it in 2022. But due to increasing costs, rate adjustments are necessary to ensure the delivery of safe, reliable and environmentally responsible energy.

Yesterday, Seattle City Council approved City Light’s 2023-2024 Rate Ordinance, implementing the utility’s electric rates for the next two years consistent with City Light’s 2023-2028 Strategic Plan. That plan, approved by City Council in June, established a rate path of 4.5 percent increases annually for the first two years, then increases of 3.0 percent each year for the remaining four years. Two other components of the ordinance are introducing a base service charge (fixed charge) for non-residential customers in 2023 and introducing optional “time of day” rates starting in 2024.

While the average rate increase across all customer groups is 4.5 percent, residential customer rates will increase approximately 5.7 percent, which is less than forecasted inflation for 2023 and 2024. Effective Jan. 1, 2023, this translates to about $4 more a month for the average residential customer. Those enrolled in the Utility Discount Program will see a $2 monthly increase in their bills.

The City Light Review Panel endorsed the rate proposal. The panel consists of representatives from City Light’s customer groups and areas of utility business expertise and advises the utility on strategic planning and utility rates. It reported to City Council that the rate increase meets several policy goals established by the review panel:

  • Transparency of rates: It’s clear to residents what their rates are and will be in the future.
  • Revenue sufficiency: It’s essential that City Light has enough revenue to deliver power safely, efficiently, effectively and with the environmental and affordability programs that Seattle residents expect.
  • Efficiency: The proposed rates still ensure that consumers are incentivized to be efficient in their use of electricity.
  • Decarbonization: The rates ensure we move forward on our goals of decarbonization.
  • Customer choice: The rates, which will include some new rate structure options in 2024, increase customers’ ability to make choices around how they use electricity and manage their electric bills.

We know even a small increase can be a burden for some customers. For customers who are having difficulties paying their bills, whether they are business or residential, heavy or light users, we have programs that are tailored to meet their needs.

We are also making an important adjustment to how we charge for electricity by expanding a basic service charge to all customers (residential customer bills have long had this charge). This does not raise additional revenue for City Light but shifts to a more equitable way to charge for the services we all receive, regardless of how much electricity one uses. The residential customer charge will raise from $6 a month to $7 a month in 2023; the new charge will be $7 for small general service customers, $27 a month for medium general service customers, and greater for industrial and large commercial customers. This type of fee is a standard industry practice and supports bill stability and predictability.

Finally, in 2024 City Light will offer residential and small and medium general service customers new choices for managing their electric bills through time-of-day rates.

(Note, as of January 2024, City Light is continuing to develop time-of-day rates. We have provided an update on the current status of time-of-day rates.)

These are rates that charge a different price depending on when customers use electricity. This new rate plan is completely optional—you only switch if you think it is a good fit for you. Time-of-day rates could help both businesses and residents save money by shifting when they use power—by charging vehicles at non-peak hours, for example. These rates also incentivize customers to help meet the City’s decarbonization goals. There will be extensive outreach later in 2023 providing more information about time-of-day rates, including giving customers information about their consumption patterns and potential savings. 

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