Seattle City Light rolls out proposal for rate increases — including ‘large-load’ data centers

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Seattle City Light has proposed an average 9.5% annual retail rate hike for 2027 and 2028 to combat an aging grid, inflation, and surging demand. The proposal includes changes that officials say will help Seattle be more fairly compensated for the energy demands of “large-load” data centers.

The Seattle City Council’s Parks and City Light Committee will hold a public hearing on the proposal Wednesday afternoon.

Under the plan (PDF), typical residential monthly bills will climb by about $10 in 2027 and another $10 in 2028. To protect vulnerable households, the utility is expanding its Utility Discount Program eligibility to include an additional 30,000 customers, offering income-qualified residents a 60% bill discount.

A major shift in the legislation is a new approach to handling large digital loads. SCL is establishing a dedicated rate class for new or expanding data centers requiring 10 MVA or more. Rather than making residential and commercial customers subsidize these energy-intensive operations, the policy mandates that data centers pay upfront for all necessary grid infrastructure upgrades. Their electricity rates will also be tied directly to the full marginal cost of procuring new power and transmission.

Utility officials say the targeted data center policy ensures the community’s legacy investments are protected and existing ratepayers are held harmless if highly portable operations relocate.

The higher rates are also driven by an aging grid, inflation, rising power resource costs, expanding technology needs, and growing energy demand from electric vehicles and heat pumps.

Seattle is already putting a one-year moratorium on new data centers in place as Mayor Katie Wilson and the city council hope to buy time to better regulate the rapid growth of the industry.

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