Tacoma City Council approves power rate hikes for next two years

The Tacoma City Council passed a revised plan for raising Tacoma Power rates Tuesday, weeks after it rejected the original plan that would have put the entire rate hike for residential and small commercial customers into the fixed, monthly charge.

The new proposal puts about half of the rate hikes for 2017 and 2018 into the fixed customer charge, and about half the increase into the variable, per-kilowatt-hour charge. The Tacoma Public Utilities board approved the plan two weeks ago after several members of the City Council said they were uncomfortable with the original plan.

The power utility pitched an average systemwide rate increase of 5.9 percent in 2017 and another 5.9 percent in 2018, the highest in more than a decade. That fact didn’t get as much attention as the structure for the residential rate hike, which irked environmentalists, members of the public and members of the City Council. It would have increased the monthly customer charge by $5.75 in 2017 and another $5.75 in 2018, which would have resulted in more than doubling that monthly charge by 2018.

Utility staff members said it was the first time they could recall the entire increase for residential rates was proposed to be added to the fixed charge. That charge covers such costs as billing, meter reading and connecting customers to the electric grid. The cost to connect each customer is close to $25 a month, staff have said.

Residential customers currently pay a fixed charge of $10.50 a month. The hybrid approach approved Tuesday will add $3 to that fixed charge in 2017 and another $3 in 2018. It increases the variable per-kilowatt-hour charge by about 3.7 percent in 2017, and about 3.8 percent in 2018 for residential customers. The small commercial service class will also see a hybridized rate increase, split between an increase in the fixed charge and an increase in the variable charge.

The rate increases for 2017 will go into effect April 16, a delay of more than two weeks from what was originally planned. Next year’s rate increase will go into effect April 1.

This story was originally published April 4, 2017 at 7:24 PM with the headline "Tacoma City Council approves power rate hikes for next two years."