TPU board offers revamped plan for power rate hikes

The Tacoma Public Utilities board scrapped its original plans for power rate hikes for residential and small commercial customers Wednesday night after City Council members said they didn’t like the way the proposed rate increases were structured.

Now, the utility board is forwarding a hybrid proposal — one that splits the increase in rates between a hike in the fixed monthly customer charge and a hike in the variable per-kilowatt-hour charge — to the City Council for approval.

“We acted on this a few weeks ago, the board had a study session with City Council members that … raised some questions, so this resolution is designed to address some of those questions,” said utility board chair Mark Patterson.

The utility’s hope is to get the power rate increases, initially scheduled to go into effect April 1, in place as soon as possible. After a joint study session with the board and City Council two weeks ago, it became clear that the utility’s rate plan, which would have added $5.75 to each residential customer’s monthly bill in 2017 and another $5.75 to the monthly charge in 2018, had detractors on the council.

The council voted Tuesday night to table that power rate proposal and directed the utility board to come up with a “hybrid” model, which the utility already had drawn up.

The new rate hikes still represent the same average rate increase for residential customers, but instead of the entire increase coming as a flat charge, about half of it will show up in the fixed customer charge and the other half will show up in the per-kilowatt-hour charge.

Residential customers will see a $3 increase in the monthly fixed charge in 2017 and another $3 increase effective in April 2018, instead of $5.75 each year (that monthly charge is currently $10.50, and would reach $16.50 in 2018).

Also, the variable amount residential customers are charged for using power will increase by about 3.7 percent this year and about 3.8 percent next year.

For the small general service class, which represents smaller commercial customers, the monthly fixed charge will increase $1.75 in 2017 and another $1.75 in 2018, said power superintendent Chris Robinson, as opposed to $3.25 each year as was originally planned. The per-kilowatt-hour usage rates also will increase for that class.

Board member Monique Trudnowski was the sole vote against adopting the new plan Wednesday, saying it wasn’t transparent and that she hadn’t seen the new proposal before or known about it until Wednesday’s meeting. She said it wasn’t discussed by the board at the study session Wednesday afternoon.

“We unanimously passed a rate increase, done the right way with lots of debate, with many study sessions, with lots of feedback from staff … and we came back with a solution we thought was fair,” she said of the board’s approval of the original rate hike plan. “To have this all new in front of me, I do not feel very good about this.”

The average 5.9 percent power rate hike proposed for each of 2017 and 2018 is the largest the utility has pitched in more than a decade and is largely due to falling wholesale and retail revenue, TPU has said.

This story was originally published March 22, 2017 at 10:36 PM with the headline "TPU board offers revamped plan for power rate hikes."