Neighborhood Transportation and Freight Mobility. There is a long backlog of
transportation improvements in neighborhoods throughout Seattle. While working to
implement these, it is particularly important to respond to the neighborhood plans and
changing conditions in neighborhoods undergoing major transformation and development,
such as Northgate, South Lake Union, Ballard, Downtown, the University District, and
Rainier Valley. At the same time, it is important to continue our work on freight
mobility, to implement new approaches to major corridors like Lake City Way and Aurora,
and to implement new technologies such as parking pay stations and improved approaches
to traffic calming on neighborhood arterials.
I look forward to working with communities throughout Seattle to expand transportation
choices, take care of the existing transportation infrastructure, make certain all
transportation providers work together, and develop strategies and improvements for
areas of critical concern.
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NUCOR STEEL ELECTRIC RATES UPDATE
On Monday, March 15, the City Council will vote on a proposal to provide a special
rate schedule for Nucor Steel Corporation that will reduce their rates by several million
dollars. On Wednesday, March 10, the Energy Committee approved the legislation 3
(Godden, Della, Compton) to 2 (Conlin, Licata). The Committee legislation changed the
contract proposed by Mayor Nickels to increase the payment to the City by some $750,000.
However, the contract still provides a several million-dollar subsidy from the rest of
Seattle's ratepayers to a single corporation, and violates the principles of fair
ratemaking for Seattle City Light.
This proposal follows up on a contract negotiated with Birmingham Steel, former owner
of the steel plant now operated by Nucor, in 2001-2002. Because Birmingham Steel was in
deep financial difficulty, the City developed an agreement to defer some payments, to be
paid back (with interest) in future years. Birmingham eventually went bankrupt anyway,
and Nucor took over the plant and the agreement.
However, the Birmingham agreement is fundamentally different from the current
proposal. It stretched out payments, but was financially neutral for City Light -
basically the same arrangements that City Light would make with any customer who had
difficulty paying their bill. The Nucor arrangement liquidates the arrangements that
Nucor inherited when it took over Birmingham's plant, and cuts Nucor's rates below those
paid by other industrial customers.
Calculating the actual subsidy is difficult because of the complex contract, but a
reasonable estimate is $4 million: about $2 million directly forgiven in return for
paying off the accumulated contract debt early; $1.5 million in lower rates for 2004;
and about a quarter million in lost interest which will not be charged on approximately
$3.5 million in payments deferred until 2005.
City Light will benefit from having the lump sum payment for the accumulated contract
debt, and the reduced uncertainty. It is also claimed that the deal helps preserve the
jobs at the Nucor Steel mill.
However, the accumulated contract debt is an obligation that Nucor voluntarily took
on, so that it could benefit from the lower rates in 2003 that were part of the
Birmingham arrangement. And there is no evidence that modestly higher electric rates
would endanger the operation of the steel plant. It is one of the most energy efficient
plants in the country, using 60% less energy per unit than the average plant, partly
thanks to more than a million dollars in conservation investments paid for by Seattle
City Light under conservation incentive programs.
The fact that Nucor eagerly took on this asset from the bankrupt Birmingham indicates
its value - and it has continued running at full pace even at the higher rates being
charged in 2004. Even with this contract, the rates would be 30% higher than in 2003,
so the anticipation of a possible rate break has not been a factor in Nucor's continued
operation of the plant. The volatile world steel markets are far more likely to force
decisions on plant operations than the electric rate.
The City Council and Mayor adopted principles for electric rate making in Resolution
28004 in 1989. Among these principles were that rates should be based on cost of service
to the customer, that rates should reflect a fair apportionment of the different costs of
providing service among different groups of customers, and that rate levels and rate
structures should be changed in an orderly manner over time.
Giving this special rate to Nucor starts the City down a slippery slope. Which
company will be next to ask for a special deal? How is the City to decide who is
worthy of a multi-million break, and who is not? Negotiated rates opens the way for
difficult and potentially unfair decisions, advantages some businesses over others, and
changes the normal rate process in unpredictable and legally risky ways.
Seattle's rate allocation process needs review. The appropriate time to do that is
during a full-scale rate process, scheduled to happen within the next year. Then it can
be done in public, with the assistance of the Rates Advisory Committee, and lead to a
new rate structure accessible to all businesses.
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SAME SEX MARRIAGE
On Monday, March 8, Mayor Nickels issued an Executive Order recognizing the validity
of same sex marriages granted by other governmental entities, and, with Councilmember
Tom Rasmussen, proposed legislation to expand the City's discrimination laws to protect
gays and lesbians who are married. The City of Seattle does not issue marriage licenses,
but the City provides benefits to domestic partners, requires major City contractors to
provide equal benefits to domestic partnerships, and enforces anti-discrimination laws
in areas such as housing and employment.
The Mayor's proposals expand and codify our long-time city commitment to equality and
fairness for all. I support them, and applaud Mayor Nickels and Councilmember Rasmussen
for their initiatives.
Society should welcome the love, dedication, and maturity of a relationship between
two adults who seek legal and social recognition as a long-term commitment. Our society
is steadily emerging from the era of denial, discrimination, and distrust of same sex
relationships. The civil recognition of same sex marriage is another positive step
forward to treating all members of our society with dignity and respect.
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"We all naturally move on the edges of eternity, and are
sometimes granted vistas through the fabric of illusion."
-- Ansel Adams
"Men stumble over the truth from time to time, but
most pick themselves up and hurry off as if nothing happened."
-- Winston Churchill
Citizen participation and
engagement are critical for maintaining democracy --
fostering it is a key task of elected officials. It's my
hope that this newsletter will inform you about issues,
inspire you to get involved, and that together we can
make things work better in this great city. Please send
me your feedback, so we can keep things lively, interesting, and
useful. And please forward it along to friends who might be
Your Seattle City Councilmember
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