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City Light provides electricity and electrical and conservation services to its public and private customers. It is the largest public utility in the Pacific Northwest. Public responsibility for electrical energy dates back to 1890 with creation of the Department of Lighting and Water Works. The formulation of this public utility stemmed from fear of monopolization by private companies and was reinforced by the inadequacy of those companies during the Great Fire of 1889. Unable to gain access to private water, much of the business district was burned to the ground. Citizens responded eagerly to the idea of publicly owned water and electricity, which was later encouraged as part of President Roosevelt's New Deal in the 1930s.

In 1902, Seattle voters passed a bond issue to develop hydroelectric power on the Cedar River under the administration of the Water Department. This was the nation's first municipally owned hydroelectric project. Electricity from this development began to serve customers in Seattle in 1905. A City Charter amendment in 1910 created the Lighting Department, making it a full member of the City's Board of Public Works. Under the leadership of Superintendent James D. Ross, the department developed the Skagit River hydroelectric project which began supplying power in 1924 with the completion of the Gorge Dam.

Both public and private power was supplied to Seattle until 1951 when the City purchased the local private electrical power company, the Puget Sound Power and Light Company, making the Lighting Department the sole supplier. The Boundary Project in northeastern Washington began operations in 1967 and supplied over half of City Light's power generation. By the early 21st century, approximately ten percent of City Light's income came from the sale of surplus energy to customers in the Northwest and Southwest with the remainder of City Light's financial support coming from customer revenue. The remainder of City Light's financial support comes from customer revenue.

The current name of the agency was adopted in 1978 when the department was reorganized. As a municipally owned public power system, Seattle City Light is governed by elected Seattle officials. Administrative authority rests with the Superintendent and an executive team that includes the department's Chief of Staff, Service and Energy Delivery Officer, Human Resources Officer, Power Supply and Environmental Affairs Officer, and Chief Financial Officer. City Light is responsible for electrical service and streetlight service, streetlight problems, and also conservation, both residential and commercial/industrial.

City Light provides low-cost, reliable, and environmentally responsible electric power to approximately 395,000 customers in Seattle and neighboring areas, including Burien, Lake Forest Park, Normandy Park, Renton, SeaTac, Shoreline, Tukwila, and unincorporated King County. It is the ninth-largest public power system in the United States and has the lowest rates among comparably sized cities in the United States.