Posted: October 12, 2011
Stuck in a transmission tower
Unlike nearly any government agency – or any of the rest of us – Seattle City Light is sitting pretty when it comes to cash.
The utility saved nearly $9 million this year through new efficiency efforts. In 2011 it has also collected $21 million more in revenue than was expected through rate increases and the fact so many of us cranked up the heat last year to get through one of the coldest and crappiest spring times ever.
Yet, in spite of all the cash, the city presently plans to raise City Light electric rates in 2012 by 3.2%.
The question is being posed by Bruce Harrell, chair of the city council utility committee.
In a letter to City Light superintendent Jorge Carrasco, Harrell suggests using the money to lower rates, or finding some other way to reinvest the surplus.
You might think city leaders would welcome the chance to hold down customer costs in light of our continuing economic distress. But City Light finances aren’t that simple and neither is the utility's financial relationship with City Hall.
Six percent of City Light gross revenues go into the city’s general fund where it can be used to plug any revenue shortfall. And City Hall is not doing as well as City Light is.
Mayor McGinn projects that the city faces a $67 million shortfall in balancing a 2012 budget of nearly $4 billion. Revenue from a rate hike would help close the gap and because of the scale of City Light operations, six percent adds up fast.
According to the utility’s annual report, in 2010 City Light took in gross revenues of $732 million. Six percent of that could be nearly $45 million. “Could be” is used here because the report makes it very difficult to figure out how much the six percent actually produced.
Nor does City Light’s contribution to City Hall stop with the tax on revenues. City Light customers also pay for a wide variety of services provided to the utility by other city agencies for financing, personnel, legal, etc.
The annual report estimates City Light paid $39.7 million for such services in 2010. Then again, City Light also collected more than $22 million from other city departments for electricity and other services.
Then again (and again), regardless of which agency is charging which department for what, it all adds up to $61.7 million in fees that are almost entirely paid for by ratepayers and/or city taxpayers just to keep the gears of city government turning.
You might think city voters would worry about such things. They don’t. And why should they? Because City Hall has historically loaded utility costs onto the commercial sector, only 35% of City Light revenue comes from residential customers, the customer class with by far the largest number of city voters.
So, the vast majority of City Light revenues and related taxes and fees come from businesses run by people who don’t have the time for civic affairs because they are too busy trying to make enough money to pay all the taxes that attach themselves to local businesses the way manure sticks to a dairy farmer’s boots.
If you would like to urge Councilmember Harrell’s colleagues to shelve the rate hike, visit www.seattle.gov/council. That’s where you can find their email addresses to tell them how you feel.
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