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Does City Light Need a Rate Increase?

By Erica C. Barnett July 1, 2009

City Council member Bruce Harrell says Seattle City Light may propose a rate increase of as much as 20 percent next year, because revenues from wholesale power sales have been falling short. (Since this time last year, the cost of wholesale power has plummeted more than 50 percent.) Harrell says City Light managers and representatives have been "going around to a lot of public forums" and "politicizing" the shortfall, which could be more than $80 million this year. Harrell says he's "not convinced at all that that kind of increase is wise or necessary," and says he plans to "scrub the numbers" to determine what, if any, rate increase is justified.

City Light communications director Suzanne Hartman says the utility doesn't know if it will seek a rate increase, and won't know until the city's rate advisory committee—which will likely be appointed by the City Council next Monday—comes back to the mayor with a recommendation later this year. Hartman notes that rates have gone down 12 percent since hitting their highest level in 2002, and are lower now than those of any comparable utility. "You can't find  another utility where the rates have gone down," she says. "It's not like we've got a huge rate base to begin with."

However, Harrell objects to City Light's heavy reliance on wholesale power sales for its revenues. "City Light should not make a practice of relying on wholesale revenue as a means of doing business," he says.
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