Earlier this year, we worked closely with Mayor Jenny Durkan to develop a new six-year Strategic Plan that reflects our shared priorities and addresses some of the challenges we face as a utility, like changing energy usage, declining retail energy consumption and an aging workforce.
To tackle those challenges, we’ve developed a plan that focuses on four priority areas:
- Strategies to control costs, capture new revenues and restructure rates
- Modernizing customer service
- Promoting the efficient use of clean energy
- And investments in infrastructure and the workforce to provide a consistent level of service, reliability and response.
As we developed that plan, Mayor Durkan directed us to identify more areas where we could control costs to reduce the impact on ratepayers.
We did just that.
Beginning with an initial and permanent cut of $18 million in 2019, we will reduce our operations and maintenance budget by six percent. Additionally, we will cut capital spending over the next six years by over $240 million, a nine 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.
As we went through the Strategic Plan process with Mayor Durkan , at every point we lowered the preliminary estimates for rate increases.
|2019 Average Rate Adjustment||2020 Average Rate Adjustment|
|January 2018: Current Strategic Plan, updated with new retail sales forecast||10.0%||3.5%|
|February 2018: New Strategic Plan, preliminary forecast||8.2%||3.8%|
|April 2018: New Strategic Plan, initial City Light proposal||6.5%||6.5%|
|May 2018: Council-Adopted Strategic Plan, as approved by Mayor||5.8%||5.4%|
Additionally, Mayor Durkan 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 and keep rates as low as possible.
Even as we take significant 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.
So earlier today, Seattle City Light submitted to the City Council today a rate schedule for the next two years
This 2019-2020 rate schedule is designed so that City Light – a 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.
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, which serves about 33,000 customers in the greater Seattl area, would pay an additional average of $1.50 per month in the first year. No UDP customer will see bill increases of more than $2 per month. 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 on January 1, 2019.
We will continue to tackle the challenges we face, innovate, and reach new heights as we keep customers’ bills as affordable as possible and stable, even as Seattle continues to grow. We power Seattle, and we’re proud of it.