On May 1, 2003, new rate schedules were established for City Light customers in Tukwila. No customers outside the City of Tukwila were affected. Higher Tukwila rates are effective May 1, 2003 for the following customer classes:
Estimated Annual Rate Increase
Residential Rate Assistance: Tukwila
Small General Service: Tukwila
Medium General Service: Tukwila
Large General Service: Tukwila
High Demand General Service: Tukwila
Variable Rate General Service: Tukwila
*No customers are served currently under Variable Rate General Service.
Q 2 Why did rates increase for Tukwila customers but not for other customers?
City Light serves most of its customers outside the city limits of Seattle under franchise agreements. These are agreements between Seattle City Light and the governments of cities outside Seattle, which specify the conditions under which City Light will serve the franchise area and the rates to be charged.
City Light's former franchise agreement with Tukwila specified that rates charged in Tukwila would be the same as those charged in Seattle through 2008. However, in 2002 Seattle and Tukwila renegotiated the franchise agreement. The new franchise agreement states that in return for Tukwila not exercising its right to create its own municipal electric utility, City Light will make an annual contract payment to Tukwila. In 2003 and 2004, the contract payments will be equal to about 4% of the amounts paid by Tukwila residents and businesses to purchase electricity from City Light. Payments will increase to 5% in 2005 and 2006, and to 6% in 2007 and beyond. The franchise also recognizes that City Light may charge higher rates to Tukwila residents but places limits on the amount by which rates in Tukwila can exceed rates in Seattle.
Q 3 What legal authorization does City Light have for charging higher rates to Tukwila customers?
The City Council passed Ordinance 121097 on March 24, 2003. This ordinance approves a 15-year franchise for the operation of an electric light and power system by Seattle City Light in the City of Tukwila and includes the authorization for higher rates.
The City Council also passed Ordinance 121098 on March 24, 2003. This ordinance establishes separate Tukwila rate schedules and the rates to be charged by City Light under these rate schedules.
Q 4 Will Tukwila rates change again in the near future?
No further rate changes are planned over the next 12 months. However, rates could change (either up or down) to pass through increases or decreases in the rates charged to Seattle by the Bonneville Power Administration for the energy City Light buys from Bonneville to serve its customers.
Q 5 How will Tukwila rates change over the longer term?
City Light's rates must remain at their current levels, or higher, until the Utility pays back all of the short-term debt it borrowed in order to meet the energy needs of its customers during the power crisis of 2000-2001. We expect that to occur in mid-2004. When that happens, the City Council plans to set new rates that are likely to be lower than rates in effect prior to that time. The extent of that possible decrease is uncertain at this time.
City Light plans to review all its rate schedules in 2004, and any changes required based on changes in costs of service would be applicable to 2005 and 2006. At that time, the basis upon which Tukwila's rates are established could change.