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Electric rates go up again
And two more large increases are likely before year's end
Tuesday, January 30, 2001
By KERY MURAKAMI SEATTLE POST-INTELLIGENCER REPORTER
When you turn your lights on in March, you probably won't like what you see.
Seattle City Council members -- hit with a "perfect storm" of an unusually dry winter and skyrocketing electricity costs -- unanimously approved an 18 percent increase in electric rates yesterday -- less than a month after a 10 percent rate boost went into effect New Year's Day.
And, they acknowledged, even higher bills could be on the way.
Families who paid the average monthly bill of about $35 last year will probably be paying about $45 a month after the new rates kick in on March 1.
With two more double-digit increases on the horizon, that average bill could be closer to $60 by Christmas.
City Light is caught in the same problem as other West Coast utilities. The dry winter means the utility can't generate as much of its own hydroelectric power. It has had to buy more electricity from private energy generators at a time when prices are going through the roof. That's blown a $300 million hole in the utility's budget that must be made up through higher rates.
"I think people are sophisticated enough to understand why we'll be increasing rates today," said Councilwoman Heidi Wills, chairwoman of the council's Energy and Environmental Policy Committee.
"Not a one of us here likes to raise taxes or rates," said Budget Committee Chairwoman Jan Drago. "But one of our highest priorities as elected officials is to preserve the fiscal integrity of City Light."
Wills noted that the utility has taken steps to avoid the private market by buying more juice from the Bonneville Power Administration, and contracting for more electricity from other sources, including a gas-fired plant in Klamath Falls, Ore.
But council members went a step further yesterday. The BPA has been slammed for giving the Northwest first crack at cheaper electricity. Concerned the city might be caught flatfooted should it lose its special right for BPA power, the council also unanimously approved a resolution urging City Light to diversify, seeking power from alternative sources such as small plants using landfill gases to turn turbines.
"If we're asking customers to make sacrifices, we should take sweeping strides to make sure this never happens again," said Councilman Jim Compton, who sponsored the resolution.
Council members also continued to urge customers to conserve, saying they can cut electric bills and reduce the need for additional increases because City Light would have to buy less power.
To encourage conservation, council members decided not to raise rates across the board, but approved a rate plan that raises rates an average 18 percent, but is weighted so that people who use more electricity will see bills go up more sharply. City Light had charged customers about twice as much for power after they'd used 480 kilowatt hours, but will now charge 2 1/2 times as much after that threshold.
Families who heat their houses with electricity would see an increase of about 21 percent, while families who use gas heating would see a 19.8 percent increase, and people living in apartments would see their bills go up by about 16.2 percent.
Whereas families with electric heat used to pay about $412 a year more than families with gas heating, they will now pay about $512 more annually.
Council members also unanimously passed a separate resolution using some of the additional $4 million in utility taxes coming from the higher fees to exempt low-income families from the higher rates.
The council will use the rest of the money to increase advertising for the program, and to encourage more conservation citywide.
Members of the community group, ACORN, held signs demanding the city extend the low-income assistance program to people who make slightly more money.
City Council members said they are studying the idea, but it probably won't be in place when the new rates kick in.
A number of uncertainties remain, but council members may have to approve two more double-digit rate hikes before the year's over. By the end of the year, electric bills may have gone up by 75 percent.
Rates could go up by another 15 percent in July unless it begins raining more, and the federal government imposes a price cap on wholesale electricity prices across the West Coast.
Another 25 percent increase could follow Oct.1 if the BPA raises its rates by as much as it has threatened.
-- Martin Thompson (firstname.lastname@example.org), January 30, 2001