Two of the Puget Sound region's largest utilities are asking customers to brace for higher bills, with multiyear rate increases now on the table. For a typical Seattle City Light residential customer, the proposal would mean an increase of about $10 a month next year, and then another $10 a month the year after that. The utility's chief financial officer, Christy Granger, said the plan is based on two years of planning and forecasting, and that demand for electricity in Seattle is projected to increase significantly.
Much of that growing demand, according to Granger, is expected to come from electric vehicles and heat pumps. While she described that shift as good news for shrinking the area's carbon footprint, she said it also puts unprecedented pressure on the power supply and on the electric grid. To keep up, City Light says it will need to procure new clean energy resources and is anticipating higher power supply costs as it does so.
The utility also points to rising expenses tied to its existing system. Granger cited higher costs from legacy hydropower, including a new license for the Skagit dams and a long term power supply contract. Aging infrastructure was described as another major factor, and one that is already causing outages for customers. Part of the proposed increase, the utility says, would help cover work such as the replacement of underground cables.
Inflation is a further driver. Granger said the utility is seeing higher prices for raw materials such as copper and poles, along with the impacts of tariffs and the rising cost of specific electric parts, with the supply chain making those harder and more expensive to secure. She said inflation has increased by nearly 40 percent over the last five years. City Light says it is doing its best to contain costs while still investing in the grid and securing power supply, which it argues will help keep rates lower over the long term.
City Light presented the rate hike proposal to a Seattle City Council committee on Wednesday, with a final vote expected this summer. That vote would potentially approve the increases for the next two years. Looking further out, the utility anticipates potential rate hikes in the range of 7 to 11 percent between 2029 and 2032, while Granger noted there is significant uncertainty down the road, especially when it comes to the potential demands from new data centers.
Customers of Puget Sound Energy are facing an even steeper path. The company is proposing increases of nearly 30 percent over the next three years for residential electric customers, with the biggest jump coming next year at a nearly 17 percent rate hike. For PSE's residential gas customers, the proposed increase is nearly 20 percent over three years, with the largest single rise of more than 13 percent also landing next year.
PSE attributes the spike to a three year rate plan that includes the cost of nearly a dozen new renewable energy projects, more than $3.2 billion invested to modernize and upgrade its gas and electrical system, and an additional $3.5 billion to meet growing demand and comply with mandated state clean energy targets. The proposal is currently being reviewed by the Washington Utilities and Transportation Commission. Both utilities note that they offer help for struggling customers, including bill discounts, payment plans and one time assistance for those who qualify.