Seattle City Councilmember Bruce Harrell

Press Release issued on Monday, 6/07/2010:

Seattle – Today, the Seattle City Council approved Resolution 31219 establishing new protocols for City Light to use when seeking approval for large capital projects. This new process was developed following challenges City Light experienced in providing the Council with information related to meeting power demands in the South Lake Union area. Councilmember Bruce Harrell asked the City Council to retain Energy and Environmental Economics (EEE) to establish best practices for determining the process by which capital projects are approved.

The new protocols guided by the recommendations of EEE are designed to enhance communication between City Light and the Council and augment the Council’s ability to review the Capital Improvement Plan (CIP) during the budget process. It will be a tool for Council to use when it analyzes the need for new capital expenditures. These protocols will also be conducive to third party review. This effort is part of the larger scale, strategic planning at City Light which will establish priorities of what projects are immediately necessary and what expenditures can be eliminated or strategically deferred.

“Passage of this resolution will help guide Council’s decisions on future capital expenditures by requiring the Utility to provide justification for significant projects,” said Councilmember Bruce Harrell, Chair of the Energy, Technology and Civil Rights Committee. “Large, unmonitored capital projects can increase customer rates and it is critical to have a thorough analysis of any factors that have a tendency to increase rates.”

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As you know, for the past 12 months I have been working on improving City Light’s financial and risk management policies, as well as building components of its strategic plan. This work has paid off and has resulted in huge benefits to the residents and businesses in Seattle.

Fresh on the heels of establishing the Rate Stabilization Fund (RSF) we received the great news that Standard & Poor’s and Moody’s retained City Light’s favorable bond ratings. Standard & Poor’s affirmed the AA- bond rating, while Moody’s affirmed the Aa2 bond rating; both with a stable outlook. This puts the Utility in the top tier with respect to national bond ratings. Maintaining strong bond ratings means City Light can borrow money at favorable interest rates, which reduces the cost for necessary investments in the utility’s infrastructure. It also means City Light can continue its commitment to providing low-cost, reliable, environmentally sensitive electricity to our residents.

By implementing the RSF and revising financial policies, we were able to improve City Light’s current financial status and prepare it for the future. The Council carefully and thoughtfully reviewed the revenue requirements for the utility – not just for today, but for the years ahead – and took action to guarantee long-term stability for our ratepayers.

[Press Release issued Friday, 5/14/2010]

Good planning and timing lead to huge savings

Seattle – Seattle City Light and its customer base saved $57 million dollars by refinancing its revenue bonds. Even with a historically low snow-pack year and an economy not seen since the Great Depression, prompt and prudent action by the City Council allowed City Light to retain its premium bond ratings of AA- (Standard and Poor) and Aa2 (Moody’s). Earlier this year, the City Council, Mayor, and City Light’s Superintendent worked together to create the Rate Stabilization Account (RSA), a $100 million dollar reserve fund, to maintain and strengthen City Light’s financial position. The $57 million in savings will go toward building the reserve fund.

“Even though we have faced one of the worst snow-packs in 50 years and the worst recession in 70 years, we were able to develop a strategy of changing our financial policies and chose to refinance about 40% of the Utility’s debt, using the bond market and cutting costs to achieve $57 million in savings. This is great news for City Light and its customers,” said Councilmember Bruce Harrell, Chair of the Council’s Energy, Technology and Civil Rights Committee. “This is strong policy work intended to achieve a specific outcome for the people and businesses of Seattle. It worked.”

Great news! We have gotten our streetlight outages significantly and measurably lower over the last few years. Properly functioning streetlights are an essential element to public safety. I am proud of the progress City Light has made under ETC direction.

In a snapshot from May of 2009, there were approximately 4,500 streetlights needing repair. One month later, after implementation of the group relamping scheme, this number was reduced to 1,665 lights in need of repair. By the end of 2009, over 90% of the streetlights that were reported by citizens were repaired within 10-14 days. By comparison, in 2004, more than 23,000 Streetlights were reported out and often it took more than a month for repair.

Presently City Light has approximately 1,500 open tickets in the system for streetlight repairs. We are currently in phase 3 of a 4 phase group relamping scheme and when it is complete there will be even fewer burned out streetlights. I commend City Light workers and their commitment to improve our streetlight system. This has been one of my goals since I took office.

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The DOE has recognized our leadership with LED streetlights and chose Seattle City Light to lead a national effort to promote the installation of LED streetlights. The “Municipal Solid State Street Lighting Consortium” has been established to share information, performance results and residents’ feedback about LED streetlights with participating communities nationwide.

You may recall that City Light received a $1 million grant from the United States Department of Energy (DOE) for the beginning phases of our transition to LED streetlights from the high-pressure sodium streetlights used currently. This year the Utility will install 5,000 LED streetlights and 40,000 over the next five years.

Currently there are LED pilot projects in Capitol Hill, West Seattle, and South Park. When surveyed, 85 percent of respondents approved of the new lights. This is a transition I am excited about because LEDs use less energy and the light emitted is more precise so there is no “light spillage.” This efficiency will mean reduced cost to run and maintain streetlights to the tune of $2.4 million per year, which will result in savings to you.

[Update 5/01/2010] Seattle City Light’s bond rating from Moody’s, below is a press release of Standard & Poor’s rating

Press Release issued April 30, 2010: Moody’s affirms City Light bond rating

Second Rating Agency Also Gives “Stable” Outlook

SEATTLE – Mayor Mike McGinn announced today that Moody’s has affirmed Seattle City Light’s Aa2 bond rating with a stable outlook. Moody’s is the second rating agency to maintain high ratings for the utility this week.

Standard & Poor’s (S&P) announced Monday that it was maintaining an AA- rating with a stable outlook for City Light. Moody’s made their announcement on Tuesday.

“The past two years have brought many challenges to the utility, including falling energy prices in 2009 and a low snowpack this year that have resulted in significant revenue shortfalls,” said McGinn. “The Council, and particularly Councilmember Harrell, has taken difficult but necessary measures to keep City Light financially healthy. My office will continue to work with the Council and Superintendent Carrasco to ensure that City Light remains a stable and strong provider of services for our city’s residents.”

Earlier this year, the City Council approved a Rate Stabilization Account that will help to protect City Light against such future volatility in its revenues. McGinn and the Council are now working with City Light to develop a strategic plan for the utility. The plan will define programs to improve system reliability and meet customer needs. In addition, a recently created City Light Citizens Task Force will be assessing financial policies along with the strategic plan in an effort to provide transparency on cost and rate consequences.

“Maintaining strong bond ratings mean that City Light can borrow money at lower interest rates for long-term investments in the utility’s infrastructure,” said Councilmember Bruce Harrell, who chairs the Energy, Technology and Civil Rights Committee. “The favorable bond ratings are a key element that allows City Light to keep rates as low as possible for the residents and businesses of Seattle.”

The bond rating for City Light was reduced several times after the on-set of the West Coast energy crisis in 2000. In January 2001, City Light received an AA-/Negative rating. By July, 2003, the rating had dropped to A/Negative. The turnaround began in December, 2004 with an A/Positive rating. In 2008 City Light was upgraded to AA-.

“This second vote of confidence shows that City Light’s efforts to manage its finances through effective controls on cost and debt and,our continued efforts working with the City Council to develop sound financial policies are working,” Superintendent Jorge Carrasco said. “But the real winners because of these recent bond ratings are our customers.”

Press Release issued April 26, 2010 with Mayor Mike McGinn

SEATTLE – Mayor Mike McGinn announced today that Standard & Poor’s (S&P) has affirmed Seattle City Light’s bond rating as AA- and a stable outlook. This rating is good news for ratepayers and independent validation that City Light is in good financial condition.

“Maintaining an AA- bond rating is essential for Seattle City Light to continue providing excellent service for residents of our city,” said McGinn. “But we aren’t out of the woods yet. Seattle City Light is facing serious challenges, including a shortfall in revenues due to a far below average snowpack. As chair of the Energy, Technology and Civil Rights Committee, Councilmember Bruce Harrell has played a key role in facing these challenges. I thank him for his hard work and I look forward to continuing my work with him. I know that we are both committed to a sustainable path for Seattle City Light to ensure that the utility remains a national leader.”

The bond rating for City Light was reduced several times after the on-set of the West Coast energy crisis in 2000. In January 2001, City Light received an AA-/Negative rating. By July, 2003, the rating had dropped to A/Negative. The turnaround began in December, 2004 with an A/Positive rating. In 2008 City Light was up-graded to AA-.

“Our decision to create a Rate Stabilization Account and develop best practices for our financial policies and risk management efforts, all lead to a rating that will benefit our residents, low income customers, and businesses, both small and large. We will be able to invest in our infrastructure and maintain our commitment for low, competitive rates,” said Councilmember Bruce Harrell, Chair of the Energy, Technology and Civil Rights Committee.

Superintendent Carrasco was pleased with the vote of confidence from S&P. ”Given the current economy, this is great news. City Light has worked hard to control costs, pay down debt, and together with the City Council, have put into place new financial policies that have strengthened our financial position,” he said. “These steps are paying off and ultimately, our customers benefit.”

About Seattle City Light: Seattle City Light is the ninth largest public electric utility in the United States and was the first electric utility in 2005 to be greenhouse gas neutral and remains net zero today. City Light has the lowest cost customer rates of any urban utility, providing reliable, renewable and environmentally responsible power to nearly 1 million Seattle area residents.