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Invest in Seattle City Light to keep the lights on

IN many ways, we are the invisible service. When your lights go on, you don't think about how it happens; you just expect that it will. You likely don't think much about the poles, the cables, or the transformers that keep our system operating. But when you lose power, you want to know why, and how long it will take before your power is back.

In today's technology-driven world, having electrical power is essential. At home, at work, or at a sporting event, so much of what you do involves reliable electric service. Soon, you may rely on electricity to power your car.

City Light is fortunate to have the cleanest and most environmentally friendly source of electricity available in the United States. Ninety percent of your power comes from renewable hydroelectric sources, and another 4 percent comes from wind. You own the seven operating dams that make up about 50 percent of that power. Our low-cost, clean power makes us the envy of the nation. In fact, City Light has been greenhouse-gas neutral since 2005, the first electric utility in the country to be climate neutral.

Yet, much of the utility's infrastructure is in poor condition and needs maintenance or replacement. We're a 100-year-old utility, and we have many facilities operating at the end of their useful life.

In September, 12,000 Queen Anne businesses and residents experienced five outages. Two of those were planned for necessary repair work. The other three can be directly attributed to failing underground equipment. We have 2,500 miles of underground cable. Much of that cable is "direct buried," meaning that it was put into the ground in the mid-1970s without protective conduit. Nearly 40 percent of that cable needs maintenance work. Yet City Light has not been able to fund this necessary work.

In August 2008, in the middle of a workday, City Light came within 10 minutes of losing power to much of downtown because four of six major transformers serving the downtown network failed — in part, due to equipment age.

Right now, the Seattle City Council is deliberating whether to accept the mayor's recommendation for an 8.8-percent rate increase. You might wonder why the utility is asking for an increase now, especially in a lagging economy.

There's never a good time for a rate increase. This year we've been financially impacted — in particular, revenues from the sale of surplus power that we generate. We have come to rely on these revenues to keep rates low. Relying on energy markets is risky. Energy prices have fallen so dramatically in the past 16 months, the revenues we planned for 2009 are $70 million less than anticipated.

We've adjusted to that reality, making significant reductions in 2009 expenses, a total of $64 million. And, we have proposed another $24 million in cuts for 2010. The fact remains: The utility's infrastructure requires attention.

Remember the windstorm in December 2006? It was dramatic evidence of the need to improve our system and to find better ways to communicate about power outages and restoration.

Right now, we face a $142 million budget gap. We plan to address this by:

• Temporarily lowering our debt-service-coverage requirements;

• Changing how we manage surplus-power sales;

• Selling surplus property; and

• Balancing revenue with a modest rate increase.

For average residential customers, the increase adds $3.93 per month to their bills. Even with that increase, Seattle will continue to enjoy the lowest rates of comparably sized cities, as well as lower rates than our neighboring utilities.

Our commitment is to be a world-class utility, to continue our leadership in environmental stewardship, conservation, and the use of clean, renewable resources that minimize climate impacts. To retain our competitive advantage in today's technology-driven economy, we must make necessary investments. Now.

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