Seattle City Councilmember Bruce Harrell

Establishing financial policies for a billion dollar organization such as City Light cannot be taken lightly. Following the energy crisis of 2001, the Utility, the Council, the Mayor and the City Light Advisory Committee took great strides to ensure that the Utility continued to deliver reliable, low-cost and environmentally responsible power. Part of these efforts included the implementation of financial policies intended to restore and sustain the Utility’s financial health. The record is clear that thoughtful and deliberate actions were taken and our city is better for it.

In order to continually improve the Utility for the people, I have pushed for a renewed look at these policies to determine whether, given the current economic climate, any adjustments can be made to these policies. The goal is continued focus on the Utility’s core mission, but also to lower its costs and increase its efficiencies. Moreover, these policies should proactively reflect and define how the Utility addresses the fluctuations in its wholesale revenue activity.

Based on this rationale, the Energy, Technology, and Civil Rights Committee passed Resolution 31181 which establishes interim financial policies for City Light with respect to setting electric rates and on January 11, 2010 the Full Council approved these policies.

Specifically: The Council set rates to ensure a debt coverage ratio of 1.8 for 2010. The previous policy called for a debt coverage ratio of 2.0. It is my opinion that retention of 2.0 debt coverage would be too much of a burden on customers in this economic climate. Consequently, the Debt-to-Capitalization ratio target of 60% by 2010 has been extended until the end of 2012.

I have asked that, by March 31, 2010, the Utility complete a comprehensive review of City Light’s finances, budgets & financial policies and develop new financial policies by the same date. The goal of the review is the development of new policies that create a permanent mechanism to protect customers and the Utility from wholesale revenue volatility and help ensure long term financial strength. As I have said in the past, this kind of focus is the roll-up-the-sleeves policy work that keeps the lights on for your public Utility and it is my pleasure serving you in this regard.

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