Seattle Passes Legislation Temporarily Lowering Birmingham Steel Rates

Seattle’s City Council passed legislation Dec. 10 that will temporarily lower the electricity rates for businesses like Birmingham Steel. In exchange, companies have agreed to temporarily forego power on short notice in times of diminished generation capacity.

According to Michael Fong, a spokesman with the Seattle City Council, the deal would cover between 9-10 companies that operate within the city owned electricity utility.

Fong adds that Birmingham Steel, which operates a steel minimill in the city, is far and away the largest consumer of electricity in the area serviced by the electric utility. The company reportedly consumes more than 250,000 megawatts of electricity a year.

The bill means that rather than cutting power to residential customers and most businesses during shortages or regional transmission problems, City Light, the local public utility, will be able to maintain service. It also means that Birmingham Steel will remain in business.

The majority of the finished product produced by the minimill is rebar.

The ordinance provides short-term relief for Birmingham Steel and several other industrial users. City Light will waive Birmingham Steel's current electricity rate surcharges for two years. The company, and any other heavy power users who ask to use the new arrangement, will then repay City Light through higher rates over the subsequent five years. Under the provisions of the ordinance, other large manufacturing and industrial customers can come forward for a similar rate if they meet the specified high demand requirements.

When the ordinance takes effect, Birmingham Steel's electricity rate will drop from the current $52.50 per megawatt-hour (during peak-hours) and $44.80 per megawatt-hour (off-peak) to $40 peak-hour and $35.60 off-peak. After two years, the company will pay regular rates plus an additional $7.25 per megawatt-hour toward repayment of the deferral.