Councilmember Bruce Harrell
Seattle City Light’s rate stabilization account is meeting Council goals
No surcharges forecasted for the remainder of 2011
Seattle – Today, City Light officials informed the Energy, Technology and Civil Rights Committee that the Rate Stabilization Account (RSA) is working as intended and there are no anticipated surcharges for the remainder of 2011.
Last year, Councilmember Bruce Harrell developed and passed legislation that implemented the Rate Stabilization Account (RSA) for Seattle City Light to better address revenue fluctuations in surplus power sales.
“We developed the RSA to protect City Light customers from service cuts due to funding shortfalls at the Utility, as well as rate spikes caused by fluctuations in wholesale revenue,” said Councilmember Harrell. “Through this account we are achieving those goals and providing the stability that our customers demand.”
Over the past five years, surplus power sales have ranged from 8 percent to 19 percent of revenues. Revenue fluctuations are caused by either low energy prices or a small snowpack. The RSA was developed to protect ratepayers from this volatility. The account was fully funded to $100 million by January 1, 2011.
The current 2011 outlook for wholesale revenue is $112.9 million, versus $96.8 million assumed in the 2011 budget. The wholesale revenue outlook is updated weekly by the Utility and fluctuates based on the Utility’s forecast of prices and energy production and usage volumes for the year. With the RSA balance exceeding the targeted $100 million, the surplus will help reduce the likelihood of any rate surcharge appearing during 2012.