Update January 4, 2022: City Light became aware of an error in our billing system that resulted in some Seattle City Light residential customers receiving bill notifications on Jan. 4, 2022, that show double charges for the same usage. The error was limited to a subset of approximately 12,500 residential customer bills processed. We have paused all bill processing until we are certain the issue is fixed.
We learned of the issue in time to stop the mailing of the potentially impacted paper bills and prevent payment processing for those customers on autopay. However, customers who are signed up for e-billing may have received an email alert with the erroneous bill information. Customers who received such a bill should not pay it. If a customer already paid the bill due to receiving the email, please contact (206) 684-3000.
We will reprocess all incorrect bills and send revised bills to impacted customers. We expect revised bills will be issued by the end of the week.
Effective Jan. 1, 2022, Seattle City Light customers will see a rate increase of approximately 3.9%. However, due to a passthrough credit from the Bonneville Power Administration (BPA), City Light customers will receive a bill credit of 1.8% on average, making the net 2022 rate increase closer to 2.1%.
|2022 Rate Increase|
|Adopted City Light Rate Increase||3.9%|
|Average BPA Passthrough Credit||-1.8%|
|Average 2022 Net Increase||2.1%|
BPA Passthrough Credit
BPA is a nonprofit federal power marketing administration that provides wholesale energy and transmission services to customers in the Pacific Northwest, primarily to public power customers. City Light purchases approximately 40% of its total electricity from BPA. City Light generally sets its own retail rates well in advance of BPA finalizing its wholesale rates and relies on a forecast of what BPA rates and purchase volumes will be. After BPA rates are final, City Light uses an automated mechanism called the “BPA passthrough” to adjust City Light rates to reflect any material difference in BPA costs from the forecast values that were used to set City Light retail rates.
In 2022, this results in a BPA passthrough credit of $0.19 cents per kWh for all City Light customers. The credit is a 1.8% rate decrease on average, but the actual percentage impact will be slightly different for each customer based on their rate schedule and consumption profile. The passthrough credit was driven by a decrease to BPA power rates along with a significant drop in the amount of energy City Light purchases from BPA. Lower power costs were partially offset by higher transmission rates and an increase in the amount of transmission capacity City Light purchases from BPA.
Adopted 2022 Rate Increase
The 3.9% rate increase was adopted by the Seattle City Council in July 2021 and is endorsed by Seattle City Light’s 2022-2026 Strategic Plan. The plan includes a five-year rate path averaging increases of 3.5% annually. According to the plan, rates increase by 3.9% on Jan. 1, 2022, 3.8% in 2023 and 2024, and 3.0% in 2025 and 2026.
While the rates past 2022 have not been formally adopted, the Strategic Plan rate path reflects the utility’s commitment to deliver low rate increases that resemble inflation. In fact, the increases in this plan are lower than those in City Light’s last Strategic Plan approved in 2018, which called for a 3.6% increase in (which we did not implement due to the pandemic), then 3.9% in 2022, 4.0% in 2023 and 4.2% in 2024.
City Light’s Rate Philosophy
City Light’s rates are designed to collect the revenue needed to maintain existing and planned operations while also moving forward on our strategic programs and investments. The revenues from our rates cover debt service, operations and maintenance, and costs associated with delivering power. As a publicly owned utility, customer affordability is a key driver to our financial planning and actions. City Light is committed to providing stable, predictable rates that allows us to deliver affordable, reliable, and environmentally responsible electric power.
Information on adopted rates (through 2022 at this point) is always available for viewing in the Seattle Municipal Code Chapter 21.49. However, the municipal code does not take into account reductions such as the BPA passthrough or surcharges such as the RSA Surcharge (not currently in effect).
For more information on residential rates, visit https://www.seattle.gov/city-light/residential-services/billing-information/rates.
For more information on business rates, visit https://www.seattle.gov/city-light/business-solutions/business-billing-and-account-information/business-rates.
Article Source: News from City of Seattle