|
Soundings
Let's talk about Power to the People
March 30, 2005
In case you wondered, life on the other side of the notepad for this recovering journalist is proving to be a fascinating ride. In my second year as a Seattle City Councilmember, I'm immersed in reviewing and revising financial policies that will help determine new electric rates for Seattle City Light customers. Yes, that's ultimately about the amount of money you and I will end up paying on our electrical bills every month - but that's only the short answer. We've a long road to travel first.
As chair of the Council's Energy & Environmental Policy Committee, I can report that Seattle City Light is currently on sound financial footing. We're now being asked to trim electrical rates to keep Seattle's industrial base humming. Before your eyes glaze over, remember, though I'm in the hot seat, we're all on this tight rope together. So, pay attention. There's going to be a test.
I've heard many competing proposals, ideas and visions about where our public electric utility is headed and how fast it should get there - and I'm certain I'll hear many more. However, there's no question that all of us share the common goal of bettering City Light's financial health. All of us would like to establish stable rates for businesses and homeowners. All of us want to craft rates that we can count on while protecting one of our most cherished civic institutions for years to come.
The devil, as they say, is in the details.
The Energy & Environmental Policy Committee, last week began to discuss proposed changes to financial policies. Mayor Nickels supports a plan that will increase the existing contingency account - read "rainy day fund" - from $25 million to $100 million. He wants also to reduce the utility's debt to equity ratio to 60 percent by 2011 maintaining a confidence level that would ensure City Light would be able to cover costs 19 years out of 20. This approach, if adopted by the City Council, would mean that rates would likely remain where they are today.
However, leading members of the business and industrial community beg to differ.
They say, "Give the ratepayers a break." They point out that, with only slightly different financial assumptions, Seattle City Light could provide its customers with a 10 percent reduction in rates. That's certainly an attractive proposition! They say, to support their argument, that Seattle City Light is charging one of the highest rates in the region, a rate that is about 21 percent higher, on average, for industrial customers, and 8 percent higher for residential customers.
So that's where my colleagues and I sit. We're hearing contrasting views that set the stage for looking at City Light's financial policies - the first step in the rate review process. With the energy crisis of 2001 fresh on our minds, we're committed to keeping electric rates stable and sustainable and to having sound financial practices. This 'stay the course' approach has its feet in hard won experience.
Most of us are inclined to err on the side of caution when it comes to financial policy decisions. No one wants to relive the days when Enron took us all to the cleaners. However, there are those who accuse us of wanting City Light to wear belts, suspenders and more belts. No one wants to have to pay the premium for being too fiscally conservative by setting aside unnecessary cash. I believe the key word here is balance.
It's too early to make predictions on the outcome. I can only make predictions about the process. As chair, I am approaching this task much like a journalist-with an open mind. No one will have the upper hand as these financial policies and electrical rates are set. I'm going to preside over process that will be open and challenge everyone to work collaboratively. That's how government is supposed to work.
Now, I know I promised a test - but let's think of it as a challenge.
Getting to fair and equitable rates that are stable and predictable will take a real effort on everyone's part. We'll need to work together. Not just on the financial policies now being considered, but also on the upcoming rate proposal these policies will help create.
In June, Mayor Greg Nickels will bring a rate proposal to the City Council. Remember, this is your city. This is your city-owned utility. The city's continued livability and cost of living are at stake. We must labor together to find the answers and come up with a rate structure that is equitable, that is sustainable and that best delivers power to the people.
We will need to hear voices. Lots of voices. Your voice. We especially want to hear from homeowners, ratepayers, stakeholders, commercial and industrial users and from anyone who cares. So, come down to City Hall…
I'll be listening with my notepad.
Seattle City Councilmember Jean Godden is a former columnist for the Seattle Times and now chairs the Council's Energy and Environmental Policy Committee. You can learn more by going to http://www.seattle.gov/council/ratereview.htm.
|
