SI Online
Posted: October 27, 2009
News You Might Not Want to Know
Hats off to Laura Onstot at the Seattle Weekly for spotting some bad news that hasn't really emerged yet from City Hall.
Past issues of Seattle Industry highlighted the growing abundance of natural gas thanks to new drilling techniques. This is a tremendously positive development for the economy and the environment because gas is so much cleaner than coal for electrical generation and the US possesses huge gas reserves (as does Canada). The New York Times (link) recently published a good story about the gas boom.
But, the great news about natural gas comes with a bad twist for Seattle City Light customers, as Onstot reported in the Weekly. Seattle City Light makes vast sums of money selling surplus hydro power. This revenue helps hold down local electricity rates.
But, the surplus power sums aren't nearly as vast as they once were because the availability of natural gas is depressing electricity prices throughout the country.
Result? You probably already guessed.
City Light proposes to make up for the declining revenue through a rate increase of nearly nine percent in 2010, followed by another 10 percent or so over 2011 and 2012. But the City Light proposal is based in part on a City Light staff assumption that gas prices will rebound next year. But, if gas prices remain low, as most expect, the proposed rate increases could grow even higher and the gas issue could impact City Light revenues and rates for years to come.
This issue is just beginning to make its way through the City Council. The council sets electric rates.
