With electricity rates from Seattle City Light (SCL) expected to increase next year, lawmakers and civilians alike are looking for ways to soften the blow while keeping the lights on. This summer, members of the City Council floated the idea of enrolling more people into a discount program to defray the impact on lower-income residents. Meanwhile, a volunteer review panel is exploring new ways to determine rates to recoup costs in a more equitable way.
The increase will equate to an additional $3.77 per month between 2019 and 2026, said Councilmember Teresa Mosqueda, who chairs the Housing, Health, Energy and Workers’ Rights Committee.
“We know this will have an impact on working families and working people and small businesses,” Mosqueda said from the dais. “We’re asking for additional feedback and thought on how we get more people onto the Utility Discount Program (UDP) as we think about affordability.”
Currently, the UDP cuts the power bills of income-qualified households by 60 percent and Seattle Public Utilities costs by half.
The rate increases are driven by needed infrastructure investments and reflect a growing population that has undertaken the shared community goal of energy efficiency. As SCL customers conserve and purchase less energy from the utility, revenues decrease, creating a gap in the utility’s finances.
Originally, SCL proposed average rate increases of 5.1 percent per year over the next six years. Mayor Jenny Durkan axed the idea, instructing the utility to cut it down to an average of 4.5 percent per year by finding $350 million in savings.
There is no plan on how to accomplish that goal as of yet.
Councilmember Kshama Sawant, the sole “no” vote on the proposal, told her council colleagues that, once again, she wanted to see the rate design reworked to put more of the onus on large businesses. Those businesses, like Amazon, have driven some of the expensive capital projects in the city as well as playing integral parts in the increasing cost of housing.
Sawant pointed to Amazon’s expanding footprint and energy demands, as well as new infrastructure needs due to the Alaskan Way tunnel, as examples of monied interests benefiting from public investment without kicking in cash themselves.
“It’s a failure of political will to shift the burden of who pays and make it a priority,” Sawant said.
The approved increases are a product of SCL’s six-year outlook, released this month. This is the second time that SCL has increased rates in accordance with their strategic plan. The proposed increases equated to a 4.7 percent annual hike, or an average of $34.86 per year, between 2013 and 2018.
At the time, SCL warned that “[e]lectricity is something many City Light customers take for granted,” and that “[c]ustomers flip light switches, turn on appliances, plug in devices, walk down well-lit streets and expect the power to be on.”
Until a rate redesign takes place, the UDP will continue to be the prime way to reduce the burden on low-income Seattle residents. The program is paid for by a small premium on full-price customers, which helps to defer the cost of funding a potential expansion.
In 2014, city officials discovered that the program was severely under-enrolled; of the estimated 65,000 households that met income requirements for the program, only 14,000 participated.
To qualify today, a one-person household has to bring in $32,376 or less in gross annual income, while a family of four can make up to $62,256. Former Mayor Ed Murray pledged to double the number of enrolled families by 2018, though there were clear challenges. Specifically, critics pointed to a convoluted application system that made UDP difficult to access.
In the years since, the city has streamlined the application process and worked with the Seattle Housing Authority to auto-enroll its clients, boosting participation and hitting Murray’s goal by 2016. As of July 2018, 33,545 households received benefits through UDP.
Low-income residential customers who could be hit hard by these continuous cost increases have options, like UDP, to help cover the bills — but there are also nonprofit organizations with tight budgets that just have to plan for the worst. Rick Reynolds of Operation: Nightwatch, an emergency shelter provider, told Real Change that the increases in utility costs take a back seat to other impending bills, such as a $200,000 repair on the organization’s building.
“Right now we’re grappling with a $200,000 estimate to repair the south and west facing windows,” Reynolds wrote in an email. “We’ve got water getting into the building thanks to ‘deferred maintenance.’ That will eclipse the light bill increase.”
Daniel Malone, executive director of DESC, Seattle’s largest shelter provider, said that the organization anticipates a hit from the new rates.
“We assume the SCL rate increases will increase operating costs for us,” Malone wrote. “We haven’t had a change in energy usage based on our shelter changes, but of course have to find a way to cover increased costs. That’s always tough when certain costs go up faster than our revenues.”
Ashley Archibald is a Staff Reporter covering local government, policy and equity. Have a story idea? She can be can reached at ashleya (at) realchangenews (dot) org. Follow Ashley on Twitter @AshleyA_RC
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