The Seattle City Council approved rate increases for Seattle City Light at levels slightly below those proposed by Mayor Mike McGinn. The Council approved rate increases of 4.3% for 2011 and 3.2% for 2012. Seattle ratepayers may not notice the effect of the 2011 increase, however, as the Council directed the utility to remove the 4.5% rate stabilization account surcharge – put in place at the beginning of 2010 – effective the first of 2011. The rate stabilization account was created as a structural mechanism providing a budgetary cushion against unpredictable net wholesale power revenues. The surcharge was to remain in effect until the fund reached $100M. Though the fund had not yet reached that amount, the Council directed the utility to divert operating cash of $10M from the current budget to fill the account. This action reduces 2010 operating revenue for the utility and lowers its debt service coverage from a Council stipulated target of 1.8 to 1.7.
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