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Weather challenges, demand increases, and rising costs result in changes to customer electricity rates

Seattle City Light will implement new rates effective Jan. 1, 2024. In addition to the planned 4.5% base rate increase adopted by City Council last fall, we will apply two automatic surcharges:

  • A 1% “passthrough” increase to account for higher costs from the Bonneville Power Administration (BPA) in 2024.
  • A 4% Rate Stabilization Account (RSA) surcharge due to increased net wholesale power costs resulting from unfavorable weather and market price conditions.

The anticipated bill increase for a typical residential customer will be about $9 per month, or $18 per bimonthly billing cycle. Customers enrolled in the Utility Discount Program will see an estimated $4 monthly increase on average.

We understand that rate increases are never welcome. But with atypical weather and rising costs over the last year, they are necessary so we can continue delivering safe, reliable power.

We encourage customers struggling to pay their utility bills to contact us for support. We offer flexible payment plans to all customers. For income-eligible residential customers, we have bill assistance programs available, including emergency bill assistance and the Utility Discount Program. 

Low precipitation and high prices caused RSA surcharge

We aim to provide stable, predictable rates that allow us to deliver sustainable, reliable, and affordable service. Under typical hydro and weather conditions, our resources produce more power than our customers can use. The surplus is sold on the wholesale market. Revenues from surplus electricity sales help keep customer rates low. When there are fluctuations in this revenue, we access the RSA, a cash reserve of approximately $100 million. The RSA helps to lessen the financial impacts of uncontrollable external factors like weather, market price changes, and hydroelectric production.

Over the past year, drought conditions reduced our hydroelectric generation. Colder winter and spring temperatures and warmer summer weather caused greater electricity demand regionwide. For City Light, customer demand exceeded the supply from our predominantly hydroelectric resources. We purchased the additional power needed to meet customer demand on the wholesale market when prices were very high, exceeding budgeted costs and drawing down the RSA. Per Seattle Municipal Code 21.49.086, if the RSA becomes depleted, a temporary rate surcharge is automatically added to customer bills to replenish it. RSA surcharges remain in place until the RSA is refilled to $100 million.

We tried to avoid the automatic surcharge by twice transferring surplus cash to the RSA in 2023. But low precipitation impacting hydroelectric projects, greater demand, and high market prices persisted through the year, and a surcharge was triggered at the end of September.

Additionally, a BPA passthrough will mean an approximate 1% increase in rates. BPA is a federal power-marketing administration that supplies about a third of City Light’s total energy. Every other year, BPA updates its rates and purchase amounts. We have an automatic power cost adjustment that modifies customer rates to reflect these costs. The BPA passthrough is permanent until we implement our new retail rates, scheduled for Jan. 1, 2025.

2024 customer rate impacts by class

The table below shows the combined impacts of the base rate increase, BPA passthrough, and RSA surcharge by customer class. Rate increases for network customers are lower than for other customers due to cost-of-service adjustments that are a part of the original 4.5% average base rate increase. The BPA passthrough and RSA surcharge are applied the same way to all customer classes.

2024TotalResidentialSmallMediumLargeHigh Demand
Network6.5%  6.8%6.3% 

While City Light continues to offer electricity rates lower than many cities in the country, we understand increases are never good news. The $70 million deficit in the RSA is significant. We are aggressively seeking ways to replenish the RSA to its required $100 million threshold and remove the surcharge as soon as possible while continuing to deliver safe, reliable, and environmentally responsible power.