Ed Murray, Mayor
SUBJECT: River Conditions Improve, Lift City Light’s Financial Forecasts
7/21/2014 9:01:00 AM
Scott Thomsen (206) 386-4233
No Customer Rate Surcharges Expected in Foreseeable Future
SEATTLE – Improved water conditions in the rivers that power Seattle city Light’s hydroelectric dams are brightening the utility’s financial forecasts and helping to hold down costs for customers.
“While energy markets and hydroelectric power generation can be volatile, these improved conditions should avoid any rate surcharges for our customers for the foreseeable future,” General Manager and CEO Jorge Carrasco said.
The latest federal river flow models project more water being available for City Light’s Boundary and Skagit hydroelectric projects as well as the Bonneville Power Administration dams where City Light gets a slice of the output. More water means more electricity the utility can sell. Even with already low electricity prices dropping a bit recently, the increased power supply should mean more revenue for City Light.
The bottom line is a $2.7 million boost for City Light compared to June forecasts.
City Light now expects to earn $89.4 million from sales of electricity to other utilities, exceeding the amount called for in its 2014 budget. That is a significant change from January, when poor snowpack conditions suggested that City Light might not meet its budgeted revenue, which could have triggered surcharges on our customer-owners.
As a result of the improved conditions, City Light expects to avoid any rate surcharges through October 2017, which is as far as the utility’s forecasts project. Those forecasts are based on average water years in the future.
“To further reduce the risk of customer surcharges, our recently updated Strategic Plan steadily reduces the amount of money we depend on in our budget from sales of electricity to other utilities,” Carrasco said. “The goal is to continue providing low, predictable energy costs for our customers.”
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 about 750,000 Seattle area residents. City Light has been greenhouse gas neutral since 2005, the first electric utility in the nation to achieve that distinction.