Ed Murray, Mayor
3/19/2014 2:00:00 PM
Jeff Reading (206) 684-4000
Megan Coppersmith (MO) (206) 684-8379
Record-setting Mountain Snows Pay Dividends for City Light Customers
Utility Anticipates No Customer Surcharges in 2014
SEATTLE (March 19, 2014) – Seattle Mayor Ed Murray and Seattle City Light General Manager and CEO Jorge Carrasco today announced that February’s record-setting snowfall in the mountains and subsequent storms this month are paying big dividends for Seattle City Light customers.
The improved snowpack conditions mean City Light will be able to make and sell more electricity from its hydroelectric dams to other utilities this summer when that snow melts. As a result, City Light’s revenues could increase by $19 million and the utility would avoid any surcharges on its customers in 2014, according to its most recent forecast.
“This is great news for residents and businesses,” Mayor Ed Murray said. “Seattle is fortunate to have a well-run, publicly owned electric utility where improvements in the bottom line are shared directly with all of its customer-owners.”
Dry conditions in December and January caused worries about how much electricity City Light would be able to generate at its dams. With less surplus power available to sell, the utility was concerned it would miss revenue projections that would then trigger surcharges on customers to make up the difference.
In February, City Light transferred $21 million in savings left over from its 2013 operating budget into the Rate Stabilization Account to help offset any lost revenues from surplus energy sales.
That transfer and the heavy snows that followed have brightened the outlook for the utility and its customers substantially.
“While any forecast can and will change based on how much electricity we can produce and the price we can get for that power, we are in a much better position today than we were earlier this year,” General Manager and CEO Jorge Carrasco said. “We are always working to keep costs low for our customers and we will stay committed to that task.”
The Rate Stabilization Account was created in 2011 to protect Seattle City Light and its customer-owners against the volatility associated with hydroelectric power production and wholesale energy sales. The $100 million account can be drawn on when revenue from surplus energy sales does not meet expectations so the utility does not have to cut back on maintenance, tree-trimming and other work that provides reliable service. If the account dips below $90 million, it triggers surcharges on all customers’ bills until the fund is replenished.
Seattle City Light is the 10th largest public electric utility in the United States. It has some of the lowest cost customer rates of any urban utility, providing reliable, renewable and environmentally responsible power to nearly 1 million Seattle area residents. City Light has been greenhouse gas neutral since 2005, the first electric utility in the nation to achieve that distinction.