SEATTLE - Massive budget cuts are expected at Seattle City Light despite a proposal that will have you paying nearly 27% more for your electricity over the next six years.
This is all part the utility's strategic plan which looks out over six years but gets resets every two years.
City Light is the 10th largest public utility in the United States.
A letter of recommendation from a citizen review panel to Mayor Jenny Durkan obtained by KIRO 7 states "As a panel, we are ringing the alarm bell: it is time for the city to place much more focus on controlling the Utility's costs going forward."
When asked to respond to the statement, City Light spokesperson Scott Thomsen said, “We are always looking to control costs from the utility.”
City Light originally proposed a rate increase of about 30% over the next six years.
But the review panel refused to support that plan, saying, "City Light has entered a new reality of declining retail demand that is projected to continue for the foreseeable future."
After receiving the panel's recommendations, Durkan wrote back last week saying "I share your concerns about the financial stability of City Light..."
She instructed City Light to make more cuts.
The final proposal calls for a rate hike of nearly 27% over the next six years. The biggest increase of 5.8% would happen next year, with an average of 4.5% a year.
“That's going to line out to $18 million in permanent cuts from operational and maintenance budget and $240 million over the next six years from the capital improvement budget,” Thomsen said.
Where those cuts will be made is still to be determined.
KIRO 7 asked if it could lead to layoffs.
“At this point there is nothing that has been decided in terms of where those dollars are going to come from. Some things are certainly going to be looked at [such as] leaving positions vacant a little bit longer,” Thomsen explained.
Despite the lower rate path, it's not good news for customers either.
Seattle City Light says it works out to an extra $39 a year for the typical home. That translates to $234 over the next six years.
A small business like a coffee shop will cough up $432 more a year, which is almost $2,600 over the next 6 years.
However, Seattle City Light says that the trend has been that consumers are using less electricity over time as technology and efficiency improve.
From 2011 to 2015, the average electrical usage for a residence in Seattle dropped nearly 15 percent.
“Ultimately, we still to pay for the poles, wires, transformers that deliver electricity to customers. Those are the biggest costs for the utility and those costs aren't going away even while electricity use is declining,” Thomsen added.
The city council select committee will review the proposal Thursday.
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