Electricity rates would increase 10 percent, on average, over the next two years under a proposal that goes to the Seattle City Council on Monday.
Electricity rates would rise 10 percent, on average, over the next two years under a proposal approved Tuesday by the Seattle City Council Energy and Environment Committee.
Within that average, different classes of customers would see varying increases. Residential customers, in general, would face greater rate increases than businesses. That would be especially true next year when Seattle City Light proposes rates based on the actual cost of providing service to different customers. City Light says such a “true-up” hasn’t been done since 2006. In 2014, residential and business rates would be more similar.
The average Seattle household would see its yearly bill increase by about $40 in each of the next two years.
The impact on businesses varies significantly based on their usage and kind of service. A small office might see its annual bills increase by less than $40 next year; a cruise-ship line would likely pay about $5,500 more, according to City Light. A large office tower in the downtown-service network, charged more for extra safeguards against outages, might pay $150,000 more next year.
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“While very few feel good about paying their electric bills, what I’ve heard is people feel comfortable about the process” behind the increases, said Mike O’Brien, chairman of the committee.
O’Brien was alone Tuesday in approving the rate proposal, which goes to the full council Monday. The other committee members, Tim Burgess and Sally Clark, were at a meeting relating to a new sports arena. O’Brien said he expected the council to unanimously approve the rate package.
The increases are part of a City Light strategic plan that calls for a systemwide average rate increase of 31 percent over six years.
Some large customers criticized the plan last year. They stressed that a City Light consultant had reported the city-owned utility was less efficient than its peers, to the tune of almost $30 million a year.
But the plan was endorsed by a citizen-review panel that met 32 times over two years. The panel was co-chaired by Eugene Wasserman, president of the North Seattle Industrial Association, and a past critic of City Light.
Wasserman and his group said the review process was thorough and transparent. In a letter to city officials, the panel called the rate increases “prudent” and necessary to maintain service levels and make key investments, including a new substation for the north downtown area, which would serve explosive growth in the South Lake Union neighborhood.
Some of the city’s largest customers would see rates decrease next year under the proposal. O’Brien said that’s mainly due to the “true-up” in service-allocation costs, not because City Light sought to appease customers who were protesting loudest. “It’s probably more serendipitous. I was convinced no one was sticking their thumb on the scale,” O’Brien said, after reviewing City Light’s methodology.
As part of its strategic plan, City Light Superintendent Jorge Carrasco said the utility would attain $18 million in annual savings in three years, although that requires changes in union contracts that haven’t been negotiated.
More than 80 percent of City Light customers are in Seattle. The utility also provides electricity to Burien, Normandy Park, SeaTac, Renton, Tukwila, Shoreline, Lake Forest Park and unincorporated areas of King County. Those suburbs would see slightly smaller rate increases next year than city customers. According to City Light, they tend to have contracts based more on energy costs, which have gone down in recent years, than distribution costs, which have gone up.
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