SEATTLE- Mayor Greg Nickels today proposed the most sizable rate cuts for City Light customers for at least the past 35 years. Under the mayor’s 2007 and 2008 plan, rates would drop between 2.2 percent for Seattle City Light residential customers and 14 percent for medium-sized commercial customers.
The mayor’s new rates proposal sets the stage for steady and reliable power rates for Seattle City Light customers in the years ahead.
"This proposal signals the end of the 2001 energy crisis for Seattle’s electricity customers," said Nickels. "With prudent planning and good financial management, we have dug ourselves out of the financial hole we were in five years ago. The days of using our credit card and racking up debt are over. We are now in a position to begin work on some major projects such as Alaskan Way tunnel utility relocation while reducing rates and paying down debt."
City Light is projecting net revenues for the biennium of $317.6 million from sales of surplus power. The utility also has reduced its annual operating and capital spending by $22 million since 2000.
"We’ve put City Light back on solid ground by using conservative financial practices and living within our means," Nickels said. "The hard work is paying off for the utility and the ratepayers."
The new rates mean that Seattle has the lowest commercial rate and the second lowest residential rate of comparably-sized cities in the nation. In addition to general rate relief, the proposal achieves City Light’s long-term goal of setting rates to reflect the actual cost to serve its various classes of customers. As a result, Seattle residential and low-income customers will pay a lower rate, as will commercial and industrial customers. Other customers may experience a small rate increase to reflect cost of service delivery.
The rate proposal now goes to the City Council for review and consideration. Once passed, new rates will take effect on January 1, 2007.
"The proposed rates will generate sufficient revenue to operate our utility, maintain our physical plant and infrastructure, pay down the debt incurred as a result of the energy crisis, align rates with the true cost of service, and provide more financial flexibility to carry us through good and bad water years," said Jorge Carrasco, superintendent of Seattle City Light.
"These rates are fair and equitable," Carrasco said. "No customer classes will be unfairly subsidizing others. The mayor’s proposal delivers on the rate relief we promised our customers, it will address our remaining energy crisis debt and it will put us in a sound financial position to meet any future challenges."