Seattle electrical rates surge for 3rd time this year

City Light customers will be hit with 9.3% raise July 1

Wednesday, May 30, 2001

By KERY MURAKAMI SEATTLE POST-INTELLIGENCER REPORTER

Seattle City Light's electrical rates yesterday went up for the third time this year as the City Council approved a 9.3 percent increase effective July 1.

That translates into a monthly increase of $4.21 for a typical family.

Coming on the heels of a 10 percent increase on New Year's Day and an 18 percent increase in March, the latest increase means the average family -- using about 860 kilowatt-hours of electricity a month -- will see their monthly bill rise to about $57, or about $15 a month more than last year.

Council members cautioned that rates will go up a fourth time -- by about 22 percent -- in October.

However, about 3,000 families who lead the city in electricity use were hit with an even higher increase -- an attempt to get them to cut back.

City Light had already based its rates on how much electricity a household uses in a month. The utility charges 4 cents per kilowatt-hour for the first 300 kwh used during a month in the summer and the first 500 kwh used in a month during the winter. After that, prices double to 8 cents per kilowatt-hour.

Council members unanimously created a third tier. The rate will double again, to 16 cents per kilowatt-hour, once a customer uses 1,800 kwh a month during the summer or 3,750 kwh a month in the winter.

"We believe this will hopefully encourage our customers to use less power," council Energy Committee Chairwoman Heidi Wills said.

Using less power, she said, means City Light will have to buy less power on the expensive open market. Ultimately, that could allow the council to take off the higher rates faster.

How many people the third tier will affect depends on the month, because energy use fluctuates throughout the year. Council analysts estimated that the top 1 percent of City's Light's 300,000 customers could be hit with the higher rate.

Although the top energy users include the city's wealthiest residents, a council analysis found about 200 low-income families and an unknown number of "regular folk" use enough electricity to be hit with the high rates.

This disparity caused concern on the council. Council President Margaret Pageler said the "regular folk" include large families. City Light Superintendent Gary Zarker didn't know for sure who will be affected, but said that people living in older rental homes that have not been made energy-efficient might be hit with the higher rates.

In response, council members raised the threshold for being charged the higher rates. Council members had considered having the third tier kick in once a family used 3,500 kwh in a month during the winter.

Wills said City Light would work with those low-income families who could be hit with the third-tier rates to use less electricity. Zarker said the utility also offers rebates to families buying energy-efficient appliances.

The 9.3 percent rate increase for other customers comes even while City Light is taking steps to stop buying power on the volatile open market. The utility is contracting to buy more power at set prices from a gas turbine in Klamath Falls, Ore., and the Bonneville Power Administration. Although that's expected to stabilize prices, the utility needs the rate increase to pay off $689 million in loans it took out to buy enough power to keep the lights on this year.

City Light says it found itself in a financial hole after last year's drought reduced the amount of power it could generate on hydroelectric dams. That forced the utility to buy more power just when electricity prices, driven partly by deregulation in California, skyrocketed.

http://seattlep-i.nwsource.com/local/25205_electric30.shtml

-- Martin Thompson (mthom1927@aol.com), May 30, 2001