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Seattle City Light Strategic Plan Outreach Franchise Cities - Burien April 2, 2012 City Hall – Burien Questions & Comments 1. Comment: Seattle city Light is a public utility, but Burien has no ownership. Public Utility Districts have their own commission and private utilities have the Washington State Utilities and Transportation Commission (UTC). Response: City Light does have a franchise agreement with the City of Burien. Seattle’s Mayor and Council is the governing board for the utility. However, they welcome input from the seven suburban cities that we serve. 2. Why are Burien customers paying for the new substation north of downtown? Shouldn’t those who directly benefitting from this $200 million investment the ones who should pay? Response: All City Light customers ultimately benefit from the addition of a new substation because it provides the utility with increased capacity and the ability to distribute power throughout our system. City Light hasn’t built a new substation in thirty years. Growth throughout our service territory requires this additional capacity and the cost is shared by all ratepayers. Now, there are customers in the immediate South Lake Union area who are asking for increased reliability through the availability of a network system. In those cases, they will pay the additional cost – their rates will be 21 percent higher than other similar customers. We do not ask the general rate base to cover this kind of requested increase in reliability. 3. The preferred path recommendation will mean nearly a 30 percent increase in rates by the sixth year, correct? And this is on top of a 23% increase in the last three years. Response: That is correct. However, it is important to note that prior to 2010, during the previous six years, there was a 12.8 percent rate decrease. We remain the lowest cost electric utility of comparably size cities, as well as one of the lowest cost electric utility providers in the region. We also have a tremendous advantage over other utilities that depend on coal. They face increasing costs because of CO2 emissions or finding new sources of energy to replace coal. City Light is more than 90 percent hydro, which is the cleanest source of renewable energy available today. 4. There was a recent article in the Economist that talked about how energy prices are going down because of the availability of natural gas. Isn’t it incorrect to say that energy prices are going up everywhere else? 5. Response: It is true that natural gas prices are very low right now and they are keeping all energy sources low. However, the investments that will be required for many of the coal plants to convert to natural gas will be considerable and the time that it takes either to convert or to build a new plant could see the cost for natural gas return to where it was just a few years ago. Today it is around $3/BTU, when five or six years ago it was more like $13/BTU. Our customers are fortunate that the majority of their energy source is low cost to begin with and environmentally sound. .
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