Electric bills are going up in Seattle.
The Seattle City Council has approved a plan that will drive up rates for Seattle City Light customers an average of 4.5 percent a year for the next six years, starting with a 5.8 percent jump in 2019.
A typical residential customer’s monthly bill, now $65, would rise $3.77 next year, in 2019, assuming the customer does not lower their electricity consumption in response to higher prices or for other reasons, according to City Light forecasts.
Two factors are fueling the rate hikes: conservation and cost overruns.
City Light's success at getting customers to save energy means each kilowatt-hour sold has to recoup a greater share of the utility’s fixed costs.
Mismanaged megaprojects have driven up rates as well.
A new substation on Denny Way, aimed at keeping the lights on in the South Lake Union neighborhood surrounding Amazon’s rapidly growing headquarters, was supposed to cost $89 million. It wound up costing $210 million.
A new billing system and new smart meters also ran millions over budget.
“We have to make sure that we are using every penny of ratepayer money wisely," Bruce Harrell, Seattle City Council president, said Monday before the vote.
"If you still look at the rates at less than 10 cents per kilowatt-hour, and you look at the top 25 cities, we are still one of the lowest in the country," he said.
Only San Antonio and Charlotte have lower electricity rates, according to Seattle City Light.
Socialist Kshama Sawant was the only Council member to vote against the plan and its rate increases.
“I do not support a rate structure that puts the rate increases and the cost disproportionately on the shoulders of working families and also some of the most struggling businesses,” Sawant said. “The average residential customer pays almost twice per kilowatt-hour compared to a big business like Nucor Steel.”
The rate increases, which are the same in percentage terms for all customers, are lower than planned. In January, City Light had proposed boosting rates 10 percent next year and an average of 4.8 percent annually over the next six years.
A volunteer review panel and Mayor Jenny Durkan told the utility to get its costs under control and demand less of its customers.
City Light, which calls itself the nation’s greenest utility, has wasted enough money on just three projects' cost overruns to pay for a decade’s worth of salmon-restoration projects for Puget Sound, according to Todd Myers with the conservative Washington Policy Center.
The dams that provide most City Light power have taken their toll on salmon habitat.
In an email, Myers called for the state to reject City Light’s requests for more money for salmon restoration projects.
“If there is no accountability for Seattle City Light’s wasteful mismanagement, they will continue to be thoughtless about how they spend money,” he said.
Councilmember Mike O’Brien said the jolt to customers’ pocketbooks should be less than the amount of the rate increase would suggest.
He said City Light has been a national leader in energy conservation. He said its investments in energy efficiency—from LED light bulbs to heat pumps—help keep customers’ total bills down as they need less energy to keep their homes warm, well-lit and connected.
“What most consumers really care about is how big their bill is, how big a check they are writing,” he said. “Energy efficiency has offset a lot of the rate increases,” O’Brien said.
Officials said City Light will help customers who want to keep expenses down find more ways to save energy or see if they qualify for low-income discounts.
Over the next year, the city will revisit the utility’s ‘rate design,’ which determines how much of the cost to keep Seattle’s lights on should be borne by residential customers and by businesses of various sizes.