9% cut in rates for City Light urged

Seattle City Council members recommended cutting electricity rates Monday an average of roughly 9 percent for City Light customers.

The 7-0 vote by the council's energy committee went beyond the 4.8 percent reduction recommended by Mayor Greg Nickels.

Council members said they were keeping a promise that steep increases during the West Coast energy crisis of 2000 and 2001 would be temporary.

A vote by the full nine-member council is scheduled for Nov. 20, said Councilwoman Jean Godden, who leads the energy committee. The new rates are scheduled to take effect over the next two years.

Big commercial and industrial customers would see bigger rate cuts than residential customers under both the council's and mayor's plans.

Bills for an average residential customer would be trimmed by about $24 a year, said Godden.

The annual bills for the city's largest electricity users, such as the University of Washington and Nucor Steel, would be reduced by more than $1 million, while a midsize business would pay about $10,000 less a year.

Godden stressed that a series of changes the council made to City Light's budget need to be analyzed more carefully before precise reductions could be calculated.

It was time to "give ratepayers some real relief," Godden said, after rates soared 58 percent during the 2000 and 2001 energy crisis. Business groups, including the Greater Seattle Chamber of Commerce, had lobbied for at least a 10 percent cut, noting that city officials had called the energy-crisis rate hikes a "temporary surcharge."

They pointed to City Light's current financial health, including $200 million in cash reserves, as justification for deeper rate reductions.

Council members noted City Light's increased spending on consultants, overtime and projects like the South Lake Union streetcar as further evidence of the utility's solid footing.

But City Light Superintendent Jorge Carrasco warned that the council's proposed cuts could be "detrimental" to customers and the utility. "The notion we're healthy and everything is fine is false optimism," Carrasco said. "We've made good progress but there's a lot of work and issues around the corner."

City Light's facilities and equipment are old and need repair, Carrasco said, noting that power outages are more frequent and last longer than in the 1990s.

He also said the utility's hydropower supply faces an uncertain future because of global warming, which appears to be producing warmer, drier winters in the Pacific Northwest.

"We have some of the lowest rates in the country," he added. "What I hear most from customers is they want reliability."

The council was prudent in its proposed cuts, Godden said. "We have conservative assumptions on top of conservative policies. We struck a balance in keeping City Light financially healthy and giving back to ratepayers."

Godden disputed that the vote was motivated by the fact that she and four other council members are up for re-election next year. "Absolutely not," she said.

Bob Young: 206-464-2174 or byoung@seattletimes.com