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   Revenue Model



2013 City Light Rates



City Light Comprehensive Rate Adjustment
Effective Jan. 1, 2013


On September 17, 2012, the Seattle City Council unanimously adopted City Light's 2013-2014 rate package. The new retail rate schedule is in line with the recently adopted six-year Strategic Plan. The Strategic Plan outlines the revenue required to meet City Light's basic operations, capital improvements, and modest initiatives to improve utility services. Consistent with the Strategic Plan, City Light average rate increases for 2013 and 2014 of 4.4 percent and 5.6 percent, respectively.

The Strategic Plan provides customers with information about how the utility arrived at its revenue needs, how the utility intends to realize the revenue necessary, and what impacts rate changes will have on customers.

Cost of Service
City Light had not done a cost of service study since 2006. Since that time, energy costs have decreased while distribution costs have increased. The revenue the utility receives from selling surplus power also has declined as energy prices have decreased. That means that the less wholesale revenue we receive requires us to increase our retail revenue - the revenue we get from customer rates. The table below highlights the changes.

Higher Distribution Costs, Lower Energy Costs, Lower Wholesale Credit
$M 2007-2008 2013 Change
Energy $477.1 $471.9 ($5.2)
Distribution $163.3 $255.5 $92.2
Other $68.6 $73.7 $5.1
Total Operating Costs $708.9 $801.0 $92.1
Wholesale Revenue $169.7 $90.0 ($79.7)


Customer Impact
Some customers will see relatively little change in their rates in 2013. However, for those customers that receive utility service that results in higher distribution costs to the utility, there will be a greater rate impact. For instance, customers who are on what is known as a "network" rate where there is service redundancy to increase reliability, it means higher distribution service costs to the utility and these customers will experience higher 2013 rate increases than other customers. Some customer classes will even see rate decreases because their distribution costs are relatively low while the actual cost of energy to the utility has declined. The 2013 changes in average rates by class are shown below.

2013 Average Rate Changes
Total Residential Small Medium Large High Demand
All Areas 4.4% 6.2% 3.4% 3.1% 5.3% -3.3%
City 3.6% 6.8% 3.8% 0.2% 0.2% -4.1%
Network 12.2%     12.0% 12.5%  
Tukwila+Shoreline 2.8% 4.8% 1.0% -0.2% -1.0% -0.7%
Other Suburbs 2.8% 4.0% 0.8% -0.9% 0.2%  


These rate adjustments begin Jan. 1, 2013. The changes for 2014 will be much more uniform, as the table below demonstrates.

2014 Average Rate Changes
Total Residential Small Medium Large High Demand
All Areas 5.6% 6.3% 5.4% 5.3% 4.4% 6.1%
City 5.6% 6.3% 5.4% 5.3% 3.4% 6.1%
Network 5.4%     5.2% 5.5%  
Tukwila+Shoreline 5.6% 6.2% 5.3% 5.2% 3.4% 6.0%
Other Suburbs 6.0% 6.3% 5.4% 5.3% 3.5%  


Even with the new 2013 rates, City Light rates continue to be competitive both regionally and nationally. This chart compares City Light's rates to those of 25 other, similar-sized cities in the U.S.

25 Cities Rate Table
Summary Rate Impacts
Glossary of Electric Utility and Ratemaking Terms
 


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