Typical residential utility customers in Tacoma would see their power bills climb next year by about $8 per bimonthly billing period – and their water bills rise by about $4 – under new rates proposed Tuesday by Tacoma Public Utilities officials.
In 2014, power and water bills would increase again by the same amounts under the proposed two-year rate plan.
The prospective rate increases – about 4.2 percent per year on average for Tacoma Power customers, and 6.5 percent per year on average for in-city water customers – are generally needed to cover each utility system’s rising costs amid decreasing revenues, TPU director Bill Gaines told the Tacoma City Council on Tuesday.
“Unfortunately, we are proposing rate adjustments,” Gaines said when presenting TPU’s 2013-14 budget proposal to the council. He added TPU officials are “trying to minimize the increases as much as possible.”
If the rate plan is approved, next year’s power and water rate increases will begin April 1, officials said.
Under the budget plan, customers of Click Cable TV also would see higher bills. Typical cable rates would jump by about $8.10 per month in 2013 and by an additional $4.85 per month in 2014.
The rate increases are part of a $1.1 billion proposed budget for TPU for the next two years – a $110 million increase from the most recent biannual spending plan adopted for the city-owned utility.
TPU’s prospective rate increases come at a time when the city’s general government utilities also are proposing increases to surface-water and wastewater services for the next two years.
City wastewater rates – which now cost the typical single family about $42.94 per month – would rise by 4.8 percent each year in 2013-14. That would increase typical wastewater monthly charges by $1.92 next year and $2.25 in 2014.
Surface-water rates would rise 5.4 percent next year and 5.5 percent in 2014. That translates to a $1.02 monthly increase in 2013, and a $1.12-per-month rise in 2014.
Meanwhile, the city isn’t planning to raise rates for garbage services, which are set to go to an every-other-week collection schedule in March. If approved, next year’s rate increases for Tacoma’s surface- and wastewater rates would kick in March 1.
The council, which has final say on any utility-rate increases, will consider all proposals during its city budget deliberations over the next two months.
Monthly bills for Tacoma Power have increased by about 22 percent from 2003-12, records show. Over the same span, Tacoma Water’s summertime bills have climbed by about 40 percent, with customers bearing rate increases every year going back at least a decade.
Still, TPU officials say power and water rates remain comparatively low when held up against rates for other regional utilities.
“We’ll still have some of the lowest rates in the area,” Gaines said.
Yet like most other utilities, TPU is facing unfunded regulatory mandates, market downturns and aging infrastructure – all of which drive up costs systemwide, officials said.
“Many of these things are caused by drivers really beyond our control,” Laura Fox, chairwoman of TPU Board, told the council Tuesday.
A nearly 8 percent increase on wholesale power rates expected to be imposed by the Bonneville Power Administration – from which Tacoma Power buys about 60 percent of the electricity it sells to its customers – is one of the biggest culprits in driving up expenses, Power superintendent Ted Coates said.
For Tacoma Water, customer demand has decreased at the same time the utility faces a $195 million project to build the Green River filtration facility to meet a federal mandate for safe drinking water, Water superintendent Linda McCrea said.
TPU officials stressed they’ve worked hard to reduce the costs they can control – primarily by eliminating positions. Power is calling to eliminate 15 positions in 2013, while Water seeks to cut 14 jobs. Most of the job reductions would occur through attrition, not layoffs, Gaines said.
Overall, TPU staffing – which accounts for about 20 percent of its budget – would fall by just 11 positions. That’s because Tacoma Rail – experiencing big revenue gains, largely thanks to the Grand Alliance’s increased shipping business through the Port of Tacoma – is adding five employees. TPU also is hiring 13 employees systemwide to augment customer service and technology staffs, officials said.
Amid TPU’s calls for rate increases, several council members suggested utility officials examine extending TPU’s 10-day payment periods, as well as increasing its maximum annual discounts ($150 for power, and $50 for water) and other programs available to assist qualifying low-income customers.
“If we’re going to be increasing rates, maybe that (discount) amount isn’t enough,” Councilman Jake Fey said.
TPU officials said they’d examine such suggestions. Overall, TPU’s proposed budget is aimed at continuing low-income assistance programs at least at current levels – about $6.65 million, TPU spokeswoman Chris Gleason said.