Seattle City Light 2024 rate increases

Seattle City Light will increases rates effective January 1, 2024. In addition to the planned 4.5% base rate increase adopted by the Seattle City Council last fall, they will apply two automatic surcharges: 

• A 1% “passthrough” increase for higher costs from the Bonneville Power Administration (BPA) in 2024.
• A 4% Rate Stabilization Account (RSA) surcharge due to increased net wholesale power costs resulting from unfavorable weather and market price conditions.

Seattle City Light aims to provide stable, predictable rates that allow them to deliver sustainable, reliable, and affordable service. Under typical hydro and weather conditions, City Light’s owned and contracted resources produce more power than our residential and business customers can use, and the surplus is sold on the wholesale market. 

The revenues from surplus electricity sales help to keep customer rates low. When there are fluctuations in this revenue, the utility accesses the Rate Stabilization Account (RSA), a cash reserve of approximately $100 million. The RSA stabilizes rates by buffering the financial impacts of uncontrollable external factors like weather, wholesale market prices and hydroelectric production.

Over the past year, drought conditions reduced our hydroelectric generation while colder winter and warmer summer weather caused greater electricity demand regionwide. 

For City Light, customer demand exceeded the supply from their predominantly hydroelectric resources. 

To close this gap, they had to purchase supplemental power on the wholesale market at a time of very high prices, exceeding budgeted costs and drawing down the RSA. Per Seattle Municipal Code 21.49.086, if the RSA becomes depleted, a temporary rate surcharge is automatically added to customer bills to replenish it. RSA surcharges remain in place until the RSA is refilled to $100 million.

2024 customer rate impacts by class

The below table shows the combined impacts of the base rate increase, BPA passthrough, and RSA surcharge by customer class. Network rate increases are lower than for Non-Network due to cost of service adjustments that are a part of the base rate increase (the original average 4.5%). The BPA passthrough and RSA surcharge are applied the same way to all customer classes.

The bill increase for a typical residential customer will be about $9 per month ($18 per bimonthly billing cycle). Customers enrolled in the Utility Discount Program (UDP) will see an estimated $4 monthly increase on average.

City Light has flexible payment plans available to all customers. For income-eligible residential customers, we have bill assistance programs available, including emergency bill assistance and the Utility Discount Program. 

While City Light continues to offer electricity rates lower than many cities in the country, we understand increases are never good news. The $70 million deficit in the RSA is significant and we are aggressively seeking ways to replenish the RSA to its required $100 million threshold and remove the surcharge as soon as possible while continuing to deliver safe, reliable and environmentally responsible power.

See the October 12 SCL Powerlines blog post for more information or call customer service at 206-684-3000.