Seattle City Light proposes rate hikes for 2023, 2024 as customer debt mounts

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With Seattle City Light customers owing nearly $49 million in overdue balances, the public utility is seeking its first significant rate hikes since the pandemic began.

A City Light proposal to Seattle City Council calls for the city to approve a series of rate increases in 2023 and 2024 to help the agency combat the effects of inflation and a growing number of connections to services.

Although the rate increase would vary between 1.7% and 5.7% depending on the billing class, the average increase would be about 4.5% and would add about $4 more per month to residential customers in 2023 and an additional about $5 in 2024 cost more.

The hikes would be lower than pre-pandemic hikes – which ranged from 5.4% to 5.8% from 2018 to 2020 – but would be the first notable hikes after no rate change in 2021 and just a 2.1% hike this year.

“We have done our best to contain costs and keep our increases low. As part of our response to the pandemic, we canceled a planned rate increase in 2021. And we would be kept to a minimum in 2022. But you know, the impact of inflation is real,” City Light’s chief financial officer Kirsty Grainger said on Wednesday.

“These rate increases are really about catching up and making sure we have enough revenue to provide a good service for years to come,” she added.

While the combined additional monthly costs for residential customers will be less than $10 per month, the increase comes at a time of unprecedented City Light debt.

Unpaid utility debt in Seattle continues to rise, reflecting the long-lasting financial impact of COVID-19 and the ongoing struggle by renters, homeowners and businesses to afford basic necessities.

According to official figures, about 9% of Seattle City Light customers and 5% of Seattle Public Utilities customers are behind — still well above pre-pandemic levels.

“Eventually we mapped the entire city, and that didn’t just focus on low-income areas,” said Leslie Brinson, senior policy adviser for Seattle Public Utilities. “It was just very clear that people were struggling across the city.”

Seattle Public Utilities, which primarily serves homeowners and real estate owners, owed about $3 million in customer debt as of February 2020, according to spokeswoman Jenn Strang. That number rose to about $15.3 million in December 2021 and is now at about $17.3 million.

Defaults are even higher at City Light, which serves significantly more customers, including renters, who tend to have lower incomes than homeowners. Before the pandemic, customer debt was approximately $16.9 million. As of July 31, around 43,000 customers owe around $48.9 million.

“Prior to the pandemic, we always offered our customers different types of payment arrangements to cover overdue debt, but we gave customers much more flexibility to top up some of those balances,” said Craig Smith, Chief Account Manager at City Light.

“Our main concern and focus is that they contact us to keep the service going,” Smith said. “If you contact us, we’ll find a plan that works for you.”

Officials said they are trying to be considerate of customers’ financial health, especially as inflation puts additional pressure on household budgets.

“Kids go to school, there’s a lot of expenses and pressures that our community faces,” Smith said. “We want to do what we can to help people.”

Since April, both SCL and Seattle Public Utilities have introduced residential payback plans to slowly eliminate unpaid bills over a period of up to three years. Government funds aimed at reducing customer debt are also expected to be disbursed soon, Brinson said, and the utility has conducted extensive media work in multiple languages ​​to share information about repayment options. Since last year, at least 3,700 City Light customers have received up to $1,000 in emergency utility assistance to pay off unpaid bills. Late fees were also waived until June 2023.

During the pandemic, the city and state banned turning off power for overdue bills, allowing some customers to build up significant City Light debt.

Though the state and city moratoriums have been lifted, Grainger said SCL has “no plans to separate anyone before the case.” In the meantime, SCL encourages customers with past due balances to take advantage of billing assistance programs for qualifying customers and past due payment plans, which are available to all customers and provide up to three years’ grace period for repaying balances.

City Light has begun screening customers “with the highest risk” and plans to send out urgent communications to those who have not yet reached repayment agreements by the end of September, according to Smith.

For more information on Seattle City Light and Seattle Public Utility’s financial relief plans, visit seattle.gov/utility-bill-help or call 206-684-3000.

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