To account for rising costs and address our shared challenges, we’re proposing some changes to customer electricity rates

August 16, 2018 by thomses Leave a Comment

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.

Soft Market for Surplus Energy Sales Triggers Electricity Surcharge

July 6, 2016 by thomses Leave a Comment

Low revenue from the surplus energy Seattle City Light sells to other utilities has triggered a 1.5 percent surcharge on electricity rates, starting in August.

City Light generates power at its hydroelectric projects. When the utility has more electricity than its customers need, it sells that power to other utilities and uses the money to keep prices low for its retail customers. For 2016, City Light anticipated $60 million in revenue from such wholesale energy sales, but the utility is on track to earn only about $43.5 million as a result of warm spring weather at a time of low prices on the wholesale energy market. The warm weather melted mountain snow earlier than is typical, which meant City Light’s hydroelectric projects were producing surplus energy at a time of lower demand and lower prices than the utility might have seen in June or July.

To make up the difference between what was expected in the budget and actual revenue, City Light draws from a rate stabilization account created in 2010 to offset the volatility that comes with generating and selling hydropower. If the amount in the account dips to $90 million or below, a 1.5 percent surcharge is automatically applied to every customer’s bill until the account is refilled to $100 million.

The rate stabilization account had $89.1 million in it June 30, which triggers a surcharge that will be applied to customer bills, starting in August. The surcharge will add $1 to the typical residential customer bill every month. This is the first time an automatic surcharge has been triggered since the rate stabilization account was created.

Based on current financial forecasts, City Light projects that the surcharge could stay in place into 2019. Should the rate stabilization account’s balance fall to $80 million or below, the surcharge would automatically increase to 3 percent.

Once the account balance is refilled to $100 million, the surcharge is automatically removed. If strong surplus energy sales ever push the rate stabilization account’s balance to more than $125 million, the City Council can choose to reduce rates, have City Light pay down existing debt or direct the utility to pay for capital expenses with cash instead of borrowing money.

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.

Seattle City Light Delivers Real Value with Electricity

February 18, 2015 by thomses 1 Comment

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.

Seattle City Light Rate Changes Go Into Effect Jan. 1

December 30, 2014 by thomses Leave a Comment

Seattle City Light is investing in its operations to maintain reliable, environmentally responsible electricity service for our customers and to enhance the services provided in several key areas, outlined in a six-year Strategic Plan unanimously approved by the City Council.

This work is designed to improve customers’ experience and rate predictability, increase workforce performance and safety practices, enhance organizational performance and continue our conservation and environmental leadership as the nation’s greenest utility.

To pay for those investments and the rising costs of goods and services, the Strategic Plan also outlines modest anticipated rate increases through 2020. Those changes take effect Jan. 1 of each year.

“Investing in critical infrastructure improvements, service enhancements and regular maintenance are important steps in continuing to provide our customer-owners with the reliable power they depend upon,” General Manager and CEO Jorge Carrasco said. “Even with the rate changes for 2015, City Light will still deliver great value, offering the lowest cost electricity for any large city in the country.”

For 2015, City Light’s rate increases average 4.2 percent across all customer classes.

	Total	Residential	Small	Medium	Large	High Demand
All Areas	4.2%	3.8%	4.8%	3.9%	3.7%	5.6%
City	4.5%	3.5%	4.6%	4.4%	5.6%	6.2%
Network	2.1%			2.7%	1.6%
Shoreline	4.2%	3.9%	5.6%	4.2%	5.3%
Tukwila	4.3%	5.2%	4.9%	4.1%	5.4%	3.4%
Other Suburbs	5.4%	5.6%	5.9%	3.7%	5.6%

A complete set of individual rate schedules will be available online, starting Jan. 1.

Additionally, City Light has simplified the rate structure for streetlighting from 119 classifications to 18. These changes go into effect at the same time.

Rate Code	Description	2015 Rate
MRL1	Monthly Residential LED	$8.45
MAH1	Monthly Arterial HPS	$20.20
MAL1	Monthly Arterial LED	$11.59
MFH1	Monthly Floodlight HPS	$17.82
MDH1	Monthly Decorative/Misc. HPS	$22.22
MDL1	Monthly Decorative/Misc. LED	$21.85
MMH1	Monthly Customer owned, city maintained HPS	$12.85
MML1	Monthly Customer owned, city maintained LED	$4.10
MEA1	Monthly Customer owned and maintained	$4.25
BRL1	Bi-Monthly Residential LED	$16.91
BAH1	Bi-Monthly Arterial HPS	$40.39
BAL1	Bi-Monthly Arterial LED	$23.18
BFH1	Bi-Monthly Floodlight HPS	$35.64
BDH1	Bi-Monthly Decorative/Misc. HPS	$44.45
BDL1	Bi-Monthly Decorative/Misc. LED	$43.69
BMH1	Bi-Monthly Customer owned, city maintained HPS	$25.69
BML1	Bi-Monthly Customer owned, city maintained LED	$8.21
BEA1	Bi-Monthly Customer owned and maintained	$8.50

River Conditions Improve, Lift City Light’s Financial Forecasts

July 21, 2014 by thomses

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.”

Unexpected Mountain Snows Are Great News for City Light Customers

March 24, 2014 by Kendehl Corley

Seattle City Light customers can expect to keep more green in their pockets thanks to February’s record-setting snowfall in the mountains and this month’s additional storms. The increased snowfall means a greater snowpack for use in generating electricity at our hydroelectric dams.

According to the most recent financial forecast, the improved snowpack will allow City Light to make and sell more electricity to other utilities once the snow melts, increasing City Light’s revenues by a projected $19 million – and avoiding any customer surcharges for the duration of 2014. You can track City Light’s snowpack and water conditions here.

“This is great news for residents and businesses. We are fortunate in Seattle to have a well-run, publicly-owned electric utility where improvements in the bottom line are shared directly with all of its customer-owners,” Mayor Ed Murray said.

Dry weather conditions throughout December and January caused concern that Seattle City Light might not be able to generate enough electricity at its hydroelectric dams for surplus electric sales. A reduction in surplus sales of electricity to other utilities could cause City Light to miss its revenue projections. Automatic rate surcharges are triggered when revenues fall short in order to maintain adequate levels of service for customers.

City Light transferred $21 million in savings left over from its 2013 operating budget into the Rate Stabilization Account in February in hopes of offsetting the lost revenues from surplus energy sales. The Rate Stabilization Account was created in 2011 to protect customers and the utility from volatile price swings associated with hydroelectric power generation and changing revenues from wholesale energy sales.

That transfer and the unanticipated record-setting snows have led to a much brighter outlook this year for City Light and its customers.

“While any forecast can and will change based on how much electricity we can produce and the price we can get for that power, we are in a much better position today than we were earlier this year,” General Manager and CEO Jorge Carrasco said. “We are always working to keep costs low for our customers and we will stay committed to that task.”

The Rate Stabilization Account is drawn on when revenues do not meet expectations, in order to prevent damaging cuts to maintenance, tree-trimming and other work that allows for reliable service for customers. When the account runs low it triggers automatic surcharges on all customers’ bills until the fund is replenished.

Seattle City Light is dedicated to finding ways to improve customer service and reliability while keeping rates low and predictable for customers. For more information on our conservation efforts and how the utility works to save customers’ money, visit our website.

Seattle City Light Proposing $21 Million Transfer to Delay Possible Surcharges

February 13, 2014 by thomses

Seattle City Light’s successful efforts to hold down operating costs in 2013 could lesen the potential impact of surcharges that could be triggered by low wholesale energy prices and below normal snowpack could have on its customers.

City Light has $21 million left over from its 2013 budget as a result of sound management decisions throughout the year. City Light is asking the City Council to transfer that money into the utility’s rate stabilization account, which would delay the possibility of surcharges.

“We recognize the importance of providing reliable, affordable power to our customers,” General Manager and CEO Jorge Carrasco said. “We want to use the savings we achieved last year to help our customers avoid increases in their bills as much as we can.”

The proposed transfer was endorsed by the Council’s Energy Committee 2-0 Wednesday. If approved by the full Council, it would delay possible surcharges that could be triggered by low wholesale energy prices and below normal levels of the snowpack City Light depends on to power its hydroelectric dams.

Seattle City Light’s Ross Dam and Powerhouse on the Skagit River.

Seattle City Light uses the revenue it receives from surplus energy sales to hold down costs for its customer-owners. The $100 million rate stabilization account was created in 2011 to protect the utility and its customers against the volatility associated with surplus energy sales and hydroelectric energy production. Without those reserves, any shortfalls in expected revenue could force the utility to cut back on maintenance work, tree trimming and other projects that support the reliable delivery of electricity while increasing future costs for repairs and outage response.

With the rate stabilization account in place, in years where revenue does not meet projections, the utility can draw funds to maintain the level of service it provides customers. If the account drops below $90 million, temporary surcharges are automatically triggered on all customers until the account is refilled, and then they go away.

Below-normal snowpack conditions currently affecting the watersheds that feed City Light’s hydroelectric dams mean the utility could have less electricity to sell. Low wholesale energy prices mean the utility might not get as much money for the electricity that it can sell. As a result, the utility’s most recent estimates suggest surplus energy sales might bring in about half of the money that was anticipated in the 2014 budget, a difference of about $36 million.

While snowpack conditions and wholesale energy prices could change, any shortfall in revenue will increase the likelihood that temporary surcharges will be triggered.

The current forecast suggests a 3 percent surcharge could go into effect in November. For a typical residential customer, that would add about $1.80 per month to electricity bills. For the average participant in the Utility Discount Program for low-income customers, the added cost would be about 80 cents per month.

“As we work to update City Light’s strategic plan, one of the considerations is how much should the utility depend upon revenue from wholesale energy sales to support its operations,” Carrasco said. “Resolving the current imbalance would reduce the likelihood of surcharges and provide our customers with even more predictable electricity costs.”

Talk With Us About How We Structure Our Rates

January 24, 2014 by thomses

Seattle City Light invites its customers to participate in a live social media chat session Tuesday, Jan. 28, regarding how the utility structures its rates.

Chief Financial Officer Jeff Bishop and Chief of Staff Sephir Hamilton will answer your questions about base rate charges, energy use charges and the services they pay for from noon to 1 p.m. via our Twitter feed and Facebook page.

City Light is on the way to meeting the goals of a six-year Strategic Plan that was approve by the Mayor and Seattle City Council in 2012. The Strategic Plan reflects what City Light’s customers want and the values of the community it serves: reliable energy at an affordable cost along with tools like mobile and online outage information; power consumption and comparison information; cost savings when they lower their energy use; community solar projects-where individuals can get credit on their bill. The Plan addresses all of these things, and more.

The next step is to examine the utility’s revenue structure to make certain rates are fair and predictable, as well as to ensure the utility’s has a sustainable source of revenue in order to implement the Plan. You can learn more about some of those challenges here.

Tuesday’s chat session is one of the ways the utility is trying to engage as many customers as possible in that discussion.

If you have a question, you can send it to us in advance or anytime during the chat session. Our executives will answer as many as they can during that hour.

On Twitter, submit your questions to @SEACityLight with a #ratedesign hashtag. On Facebook, type them into the comments on any of our posts about the session. We’ll create a new status update Tuesday specifically for the chat session.

We look forward to hearing from you.

What a Possible Surcharge Could Mean to You

January 23, 2014 by thomses

You might have seen some of the media coverage from Wednesday’s meeting of the Seattle City Council’s Energy Committee where Seattle City Light General Manager and CEO Jorge Carrasco discussed the possibility of a surcharge on electricity bills later this year.

The reasons for this risk are low prices on the energy City Light sells to other utilities and uncertainty about how much snow might fall in the mountains to feed the utility’s hydroelectric dams, which generate that electricity.

If those conditions persist, and City Light’s reserve funds continue to drop, a temporary 1.5 percent surcharge would automatically be enacted until conditions improve. Here’s what it could mean for you.

Seattle City Light’s average residential customer pays about $60 a month on electricity. A surcharge would add about 90 cents to each month’s cost.

For customers who participate in the Utility Discount Program, the average monthly cost is $23. A surcharge would add about 40 cents a month.

Business customers account for about two-thirds of the energy delivered by City Light. They would receive the same 1.5 percent surcharge. The financial impact would vary greatly among businesses depending on their energy consumption. For a small business, the surcharge could mean as little as $1.13 a month. For a large business with intensive energy use, the surcharge could add several thousand dollars to each month’s electricity costs.

More information about the rate stabilization account City Light has used since 2011 to limit the utility’s financial risk from fluctuations in energy markets and snowpack can be found here.

Utility Discount Program Can Cut Winter Heating Costs by 60 Percent

September 24, 2013 by thomses

Before cold winter weather returns to the Seattle area and starts driving up heating costs, Seattle City Light is working to help income-eligible customers cut their utility bills by 60 percent.

“It can be tough enough to make ends meet on a limited income,” City Light Energy Delivery Officer Phil West said. “People shouldn’t have to choose between staying warm in the winter and buying groceries. We’re here to help.”

The Utility Discount Program helps seniors and income-qualified families by lowering rates on the electricity provided by Seattle City Light and services from Seattle Public Utilities, including water, sewer and garbage. The average annual savings on electricity for participants is $450.

About 13,500 customers are already participating. An estimated 20,000 others are eligible for reduced rates, but have not yet signed up for the program.

City Light has started several efforts to break down barriers to participation caused by language differences, cultural skepticism and the required documentation. Staff members are available to help customers with their applications. Staff will hold office hours in neighborhood service centers to answer questions, guide people through the process and accept applications. And a pilot program is being developed to reach out to East African communities and seniors.

Additionally, staff will offer home visits to participants to identify opportunities for reducing their energy consumption. Participants will receive energy efficient compact fluorescent light bulbs, outlet gaskets, low-flow showerheads and referrals to the Homewise weatherization program and other resources. Visit www.seattle.gov/light/discount, call (206) 684-3417 or email scl_rateassistance@seattle.gov for more Information.

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 nearly 1 million Seattle area residents. City Light has been greenhouse gas neutral since 2005, the first electric utility in the nation to achieve that distinction.

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