Declaring that City Light had "turned the corner" on its financial problems, Mayor Greg Nickels announced today that his administration would not seek a further City Light rate increase.

"I have taken a close look at City Light's financial situation, and I am announcing to City Light customers today that rates are high enough. There will not be another rate increase," Nickels said at a news conference today at City Hall.

The mayor said an improved financial outlook for the utility precluded the need for a rate increase. City Light is projecting revenues of $110 million above expenses from sales of surplus power. The utility has also cut its budget this year by about $37 million. "This past year has been a difficult one, but the utility has turned a corner," the mayor said.

The mayor's office has been studying City Light's financial situation since shortly after Nickels took office at the beginning of this year. The utility is recovering from the energy crisis of 2000-2001 that caused dozens of West Coast utilities to raise rates and borrow money to pay for extremely expensive wholesale market power.

Even as the crisis intensified, City Light was strengthening its resource portfolio and had hoped to recoup its losses by selling into the high-price market. But power prices plunged last summer and fall, delaying City Light's recovery. Now, however, prices have rebounded, although not to previous levels, and City Light's revenue projections have risen.

"Because of these improvements, I'd wish I could tell you that we are rolling back rates immediately. I don't like paying the higher rates either," the mayor said. "But we have to be realistic about what's needed for City Light to work its way out of a $600 million debt. My goal is to hold the line on rates, stop the practice of borrowing to keep rates artificially low, and make City Light live within its means."

Seattle City Councilmember Heidi Wills, also speaking at the news conference, said that City Light's strong resource portfolio and new, more conservative financial policies will help the utility make a strong recovery.

"We have put the tools in place and I am optimistic that by working with the Mayor and City Light, we now have a much stronger and healthier publicly owned utility," Wills said.

Both Nickels and Wills repeated their intention to roll back rates as soon as City Light retired its short-term debt and built up a reserve to insure the utility against bad water years in the future.

Mayor Nickels also addressed a rash of erroneous high bills recently mailed out to City Light customers. He said he was pleased at the utility's progress in resolving disputed bills and improving the customer complaint process.