Long in the works, increases over the next two years will address rising distribution costs, which affect households more than large-scale electricity users in business and industry.
The Seattle City Council voted unanimously Monday to increase electricity rates 10 percent, on average, over the next two years.
Different kinds of customers will see different impacts. Residential customers, in general, will face greater increases than businesses.
That’s particularly true next year, when rates would be linked to the actual cost of providing service. Seattle City Light hadn’t studied the cost of service and adjusted rates accordingly since 2006.
The average Seattle household will see a 6.8 percent increase next year, and its annual bill will go up by about $40 next year.
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City Light’s largest commercial customers will see a 4.1 percent rate decrease next year. Rates for small businesses will rise 3.8 percent.
In 2014, rate increases for residential and business customers will be much closer to equal. Residential rates in Seattle will go up 6.3 percent; rates for the largest commercial customers would increase 6.1 percent.
According to City Light, the largest customers tend to be charged much more for energy costs, which have gone down in recent years, than for distribution costs, which have gone up. The opposite is the case for residential customers.
No one testified against the rate hikes, and no council members commented on them except Mike O’Brien, chair of the council’s Energy and Environment Committee. O’Brien noted the increases were no surprise, as part of a six-year City Light plan that a citizen panel spent two years reviewing before endorsing.
That plan would raise rates 31 percent, on average, over six years. The vast majority of the proposed rate increases will go toward maintaining City Light’s current levels of service.
Some large customers, such as Boeing, had protested the proposed six-year rate plan. They pointed to a City Light consultant’s finding that the utility was less efficient than peer power companies.
City Light has committed to saving $18 million in three years through efficiencies. Some of those savings require changing work conditions in upcoming negotiations with employees.
Next year’s decrease in rates for large electricity users is a positive step, though City Light should push for more efficiencies, said a Boeing spokeswoman.
“This proposal, while it means a near-term dip in Boeing’s power costs, is an initial step toward that goal,” said Susan Bradley of Boeing. “There’s much more work to do, and we look forward to working with all parties as we progress toward a sustainable, balanced solution.”
Bob Young: 206-464-2174 or email@example.com