Piling on: City Council set to vote on new electricity rate increase
Outgoing Mayor Greg Nickels was so offended by a nearly 14 percent rate hike last year that he refused to sign the ordinance. Then the council added another 4.5 percent hike in March, and it is set to vote this week on an additional 8.5 percent in charges.
Kent Kammerer/Crosscut
What's going on at Seattle City Light?
No one needs to retell the story of our tattered economy. As a business person who lives and works here in Seattle, I think there is something you need to think about.
Times are tough for too many people. Senior citizens will not get a cost of living increase in their Social Security checks. Human services agencies are struggling to help an estimated 27,000 people in our city. Home foreclosures are occurring at a record pace.
The statistics also tell us that small businesses — the businesses that employ the most people are also struggling to make their payrolls and keep the lights on. In too many cases small businesses are barely surviving.
Yet each of us is doing his part to pull back, take another look at our budgets, sacrifice business as usual and tighten our belts.
But there’s one huge anomaly down at City Hall: Seattle City Light and runaway electric rates.
Just one year ago, the Seattle City Council overruled then-Mayor Nickels and raised electricity rates from his proposal for an 8.9% increase to — hold on — 13.8 percent. Mayor Nickels disagreed so strongly that he refused to sign the ordinance.
Then in March our rates went up another 4.5 percent as a “temporary” surcharge to create a fund to protect us from rate shocks. Yes, they raised rates to protect us from raising our rates. Go figure. So our electric rates went up over 18 percent in one year at a time of no inflation and dire economic conditions.
Imagine if you stopped by Ezell’s Famous Chicken (sorry about the plug!) and the clerk said, “By the way, we’ve raised our prices nearly 14 percent and now we’ve added a 4.5 percent surcharge because the price of chicken might go up someday. You don’t mind this do you?” Those of us at Ezell's know we make great chicken, but customers know when they’re being taken advantage of. They might not come back.
But that’s only half the story because when it comes to electricity, you can’t go down the street to another restaurant. City Light is the only game in town.
This week the city council is considering adding another 8.5 percent increase over the next two years. That means that even if the “temporary” surcharge goes away, our electric rates will have gone up by nearly 24 percent in just three years.
And, this brings us back to where we started. There are few city services as essential as electricity. The cost of electricity falls heaviest on those with the lowest incomes. Now, the people and organizations who can least afford to watch their electric bills shoot through the ceiling were clobbered by the 13.8 percent increase last November. Then they got whacked again by the 4.5 percent last March. And now, brace yourselves again. Another 4.3 percent this coming January and still another 4.2 percent in January 2012.
Ouch!
We’re all in this together. Whether you’re on a fixed income or struggling to keep your business open or just trying to save enough cash to buy that one nice Christmas present, none of us can afford runaway electricity costs. Please join in telling the council that it’s time for City Light to tighten its belt and this is not the time for more regressive rate increases.
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Comments:
Posted Thu, Nov 11, 9:32 a.m. Inappropriate
I attended a meeting yesterday at City Hall to learn about the City's future plans to address climate change. The City would like to move forward with programs to improve electrical efficiency in low income areas and to create jobs in weatherization and retrofit. I personally would like to install solar panels on my house. In both instances though, one finds that the cost of our electricity to be so low that it is not cost effective to make these investments.
Furthermore, if one looks at the city's electrical infrastructure, we have woefully under invested in needed maintenance and upkeep. In a meeting that I had with Bruce Harrell several years' ago, he commented that City Light managers have stated that the infrastructure north of the ship canal is about 30 years behind comparable infrastructure of other utilities.
We certainly do need to consider that low-income rate payers but keeping rates so low that we can't make future investments is not the solution.
Posted Thu, Nov 11, 11 a.m. Inappropriate
Why is the city spending valuable time and resources on an issue (Climate Change) that the rest of the world has by now discovered to be a minor or even non-existent issue?
Does the City of Seattle have so little regard for its citizens that it will spend precious local taxpayer funds to satisfy the pet projects of the global environment machine?
There's a reason the the economy is in the tank: Too many social programs spending too much money on bad investments that either don't produce a decent return (Drunk hotel, "sharrows", road diets) or create more problems (South Lake Union Trolley).
Tell your City council to get back to the business of managing a big city and leave the special interests to fund their own projects.
Posted Thu, Nov 11, 3:20 p.m. Inappropriate
Seattle: Utility rate increases needed; zero (0)
This is all about political patronage, not climate change nor real system maintenance. If there was really a maintenance problem it would have been taken care of during the recently past boom years when City Light was raking in the dough.
If the Seattle City Nobility really cared about climate pollution, etc., they would first turn off all the street lights. Yes, Colorado Springs turned off some of theirs earlier this year. Politicians like to act like shrieking ninnies and tell us we will all be run over and killed by cars and muggers if the lights are turned off. None of those are true. Street lights are a metropolitan vanity ..... "Ooooo, looook, we can see Seattle from space!!!!" What do you think your car lights are for ? Do you randomly crash into trees and cows when driving in the country ? Do you fantasize about a mugger hiding in the many dark corners of the City ? If so, you should move.
So lets turn off the lights and take a look at the night. The City, and all of us, can save Seattle Light from fear of rate increases. We can also give the machine a little indigestion.
Time for the hysterical people to grow up.
Jamesa
Posted Thu, Nov 11, 4:56 p.m. Inappropriate
City Light rates have been among the lowest in the region for decades. And, despite the increases noted above, only Tacoma's are marginally lower. Unlike most utilities, the rates we pay don't cover the full cost of the electricity we use. Years ago Seattle decided to generate and contract to buy more energy/electricity than it needs. The surplus is sold to other utilities, primarily in California, and the "profits" are used to keep our rates low. For years that was a great strategy that help keep City Light's rates lower - some might say artificially low. What happens when the economy tanks and the price of the surplus electricity drops? The "profit" is reduced and suddenly we no longer have the means to keep our rates low. City Light has cut costs, but at the end of the day the strategy that worked so well for years has come back to "bite" us - the rate payers.
Posted Thu, Nov 11, 5:48 p.m. Inappropriate
The city also needs to invest in upgrading the power lines to houses if the plan for us to all drive electric cars is really what they want.
I see that climate change deniers are alive and kicking, but it's already happening. It's like gravity, it doesn't matter whether you believe it or not. The question left is what if anything are we going to do to adapt.
Posted Thu, Nov 11, 6:23 p.m. Inappropriate
An email forwarded from the Seattle Ratepayers' Association argues that because "City Light does not have an Asset Management Plan and it has an outdated strategic plan," a review process must precede any rate hikes:
"Less than one year after passing the largest single rate increase in almost a decade, and in the midst of the Great Recession, the City Council seems poised to approve two additional City Light rate increases for 2011 and 2012 totaling another 8.5% on top of everything. Seattle families and businesses are struggling to survive this terrible recession. We have suffered record high unemployment and anemic economic activity. The last thing the city should do in this economic environment is add to the cost of doing business or living in Seattle without the benefit of a full rate review process.
"These proposed rate hikes, together with the 13.8% increase passed last November, will cost rate payers more than $130 million over the next year. The 2012 increase being considered would add another $25 million to that total. On top of that ratepayers contributed another $20 million to the Rate Stabilization Fund in 2010. And all of this without the benefit of an in-depth review of City Light's finances and performance.
"City Light does not have an Asset Management Plan and it has an outdated strategic plan. City Light has not undergone the kind of thorough review of its finances, cost structure and rate schedule required of most other utilities seeking rate adjustments in many years. Instead the utility proposes rate increases as a part of the city's annual budget process thereby putting council members in the position of having to make multi-million dollar rate decisions quickly and without the benefit a full review.
"Seattle businesses stand ready to pay the rates required to support investments needed to keep Seattle City Light a first-class utility. We understand the need to invest in plant and equipment but we also know that such investments must be supported by a clearly demonstrated need. Without a full rate review there are simply too many unanswered questions for the council to again increase rates.
And there's more. State law exempts City Light from a thorough review. Regulated utilities like Puget Sound Energy undergo a comprehensive 10 month process during which the utility must clearly demonstrate that the proposed rate increase is needed by showing what its costs are during a given year. This rate review process includes:
1. Identification of what groups will actively participate in the review
2. Setting a schedule for discovery, testimony and hearings
Submission of supporting documents and written testimony
3. A discovery process during which time the applicant must respond to questions posed by case participants
"Last year a City Council member told a group of Seattle business people that one of the reasons for last year's 13.8% rate increase was approximate $5 million in general fund revenue the increase rate would generate through the utility tax. That is because the city levies a 6% utility tax on City Light rates. Thus, today we are also concerned that the $3 million in increased annual utility tax the proposed rate increase brings to the city is playing a role in the rate decision.
"An open, thorough and transparent rate review process is the way to build trust and support of Seattle ratepayers. There is simply too much at stake to do anything less."
The group recommends telling City Council members "they should not approve a rate increase unless it is based on an open, transparent process like other utilities and until proposed rate increases are tied to a completed Asset Management Plan and Strategic Plan."
Makes sense to me. You?
Posted Fri, Nov 12, 12:53 a.m. Inappropriate
The next scam is the forced use of battery cars and the fiat to install "charging stations". Government would like nothing better than to have us all pumping electricity into these sieves 8 hours a night, driving electric rates through the roof.
And last I heard, 80 percent of power around here comes from the Columbia. So, did the river ask for a raise?
Posted Sun, Nov 14, 10:51 a.m. Inappropriate
Our City has some of the cheapest electricity rates in the nation and I have confidence that Bruce Harrell's oversight of City Light has them going in the right direction. Harrell has a reputation of having an astute business sense and for keeping rates low. This increase is no big deal and i am certain that if it were reasonable to not have any increase at all that is what would have happened.
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