Mayor Greg Nickels announced today that Seattle City Light will respond to declining revenue from its surplus power sales by making
cuts in its operating and capital budgets this year.

The reductions will allow the utility to avoid any changes in rates, according to a city press release.

“These budget cuts will have some impact to customers, but during a recession, we have to be sensitive to our ratepayers,” Nickels said.

The revenue City Light generates from selling its surplus power on the wholesale energy market is tied closely to natural gas prices. With the downturn in the nation’s economy and lower demand, the price of natural gas has dropped more than half since July 2008.

The utility now projects $78.9 million in surplus power sales in 2009, down from a forecast of $142.2 million at the end of 2008.

“In addition to the recession, we are facing a lower than normal water year," said Jorge Carrasco, City Light superintendent. "While we anticipate having enough power for our own customers, it means we also will have less power to sell to an already depressed market."

The utility will cut $21 million in its operations and maintenance budget (about 11 percent) and reduce its capital improvement program by
$43 million (about 20 percent).

Some measures include:

·Hiring freeze affecting 170 positions.

·Restricting travel to essential operations; cutting purchase of supplies and equipment.

·Reducing by half the number of miles of tree trimming near power lines.

·Substantial restrictions on use of overtime.

Effects of these cuts include longer times to complete electrical service connections and street light repairs, and longer wait times at
the utility’s call center.

The budget cuts are being made to contain spending while holding the line on rates in 2009. During the past five years, City Light has
reduced rates by 12.1 percent and reduced its debt load from 85 percent to 65.9 percent, putting it on sound financial footing.