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Record No: CB 120233    Version: 1 Council Bill No: CB 120233
Type: Council Bill (CB) Status: Committee Agenda Ready
Current Controlling Legislative Body Transportation and Utilities Committee
On agenda: 12/1/2021
Ordinance No:
Title: AN ORDINANCE relating to the City Light Department; directing the transfer of certain funds in the Light Fund into the Rate Stabilization Account in 2021; and amending Section 21.49.086 of the Seattle Municipal Code to simplify the operation of the Rate Stabilization Account.
Sponsors: Alex Pedersen
Supporting documents: 1. Summary and Fiscal Note
CITY OF SEATTLE
ORDINANCE __________________
COUNCIL BILL __________________
title
AN ORDINANCE relating to the City Light Department; directing the transfer of certain funds in the Light Fund into the Rate Stabilization Account in 2021; and amending Section 21.49.086 of the Seattle Municipal Code to simplify the operation of the Rate Stabilization Account.
body
WHEREAS, the City established the Rate Stabilization Account (RSA) within the Light Fund to buffer the City Light Department ("City Light") and its customers from deviations of Net Wholesale Revenues (NWR) from those assumed in budgets; and
WHEREAS, over its past decade in operation, the RSA has proven to be a useful and effective mechanism for shielding customer rates from financial risks brought on by uncontrollable external factors like temperatures, rainfall, and wholesale market conditions; and
WHEREAS, the financial risk in NWR is smaller than when the RSA was first introduced due to smaller surplus volumes, lower average market prices and changes to City Light's contract with the Bonneville Power Administration; and
WHEREAS, the current $10 million band between surcharge thresholds is not well aligned to current revenue uncertainty and contributes to more frequent rate changes than necessary to buffer NWR risk; and
WHEREAS, in Ordinance 123757 the Council expressed a desire to reduce the likelihood of rate surcharges, as provided for in Seattle Municipal Code (SMC) 21.49.086, should revenue be less than that assumed in budgets; and
WHEREAS, City Light customers participating in focus groups in 2019 expressed a strong desire for rate stability; and
WHEREAS, City Light anticipates better than 1.85 times 2021 debt service coverage due to increased retail revenues, lower power contract costs, and favorable bond pricing; and
WHEREAS, City Light anticipates 2021 NWR will be significantly lower than the level assumed in the 2021 Adopted Budget, primarily due to the impacts of unforeseen and extreme weath...

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