Mayor to propose Seattle City Light rate increase of 31% over 6 years
Seattle City Light customers would pay 31 percent more over six years, under a proposal to be announced Monday by Mayor Mike McGinn.
Seattle Times staff reporter
Mayor Mike McGinn will propose a 31 percent rate increase over six years for Seattle City Light customers, at a news conference scheduled for Monday morning.
The rate hikes, which average 4.7 percent a year, are part of City Light's new strategic plan. In endorsing the plan, McGinn is expected to stress the predictability it brings ratepayers, according to his "talking points" for the news conference and other documents obtained by The Seattle Times.
McGinn plans to stress that businesses want predictable rates and that the six-year plan lets businesses and customers know what to expect.
For the average home, City Light says the increase will amount to roughly $35 a year; for a hotel it translates to an extra $109,000 annually; and for a large customer, such as a steel mill, the proposed increase would amount to $632,000 more per year.
The proposed increases, to start next year, would need to be approved by the City Council. The first two years of increases could be approved this year as part of the city's budgeting process. After that, the increases could be more or less than the plan calls for.
Rates have climbed 18 percent over the past two years.
Some of City Light's biggest customers, including Boeing, have lobbied against such rate hikes, saying the city-owned utility needs to attain savings through efficiencies before it jacks up rates.
Consultants hired by City Light identified last year $35 million in potential savings, based on comparing City Light's staffing and other spending with peer power companies.
"Talking points" for City Light Superintendent Jorge Carrasco for Monday's announcement say "no rate increase is easy to propose and we did not come forward with this recommendation without critical examination of our own operations."
Carrasco notes that City Light is committed to saving $18 million a year through efficiencies by the third year of the plan.
Some proposed efficiencies require changes in staffing practices, which means negotiating changes in union contracts.
City Light needs rate increases to decrease debt, invest in equipment, build up reserve funds and maintain ongoing cycles of maintenance for reliability, according to City Light communications director Suzanne Hartman.
The six-year strategic plan was developed through a customer committee that met 32 times. Talking points for the panel's Co-Chairmen Eugene Wasserman and Stan Price note that the process was "incredibly transparent."
On the eight-member panel, Wasserman was appointed to represent customers at large and Price was appointed to be an energy-efficiency advocate.
It's "not easy to recommend six years of rate increases," according to Wasserman and Price, "but we have a better understanding of what is driving rates and what needs to be done to protect and improve the incredible electrical system the city is blessed to have."
Bob Young: 206-464-2174 or firstname.lastname@example.org
Information in this article, originally published May 6, 2012, was corrected May 7, 2012. A previous version of this story gave a total rate increase of 28 percent, which didn't properly include the compounding of the annual increases.