The Legislature could foil Tacoma’s controversial plan to fund Click Cable TV’s expansion with electric utility revenues.
State Sen. Steve O’Ban, R-Tacoma, introduced a bill Thursday that would ban the city’s public utility from charging customers on their power bills to cover the cost of the cable company’s expansion into selling retail internet and phone service.
“It’s just not right for utilities to be subsidizing what is really a different service,” O’Ban said.
Supporters of having electric ratepayers fund Click say it’s necessary for the network’s expansion, which they say will help provide low-cost internet in the city. They’ve argued that Click is an integral part of Tacoma Power, since at least part of its infrastructure is used by the utility.
“I think it’s incredibly interesting that this got dropped at the 11th hour,” said Tacoma Mayor Marilyn Strickland, who has championed the move to keep Click publicly owned and operated as it transitions to a new business model. “It’s also interesting to me that the large corporate entities that are in the telecommunication space, and the internet service providers, did not seem to mind an alleged subsidy until Click said we were going to get into the retail business.”
The funding model for Click has drawn criticism from some members of the utility board, as well as former Tacoma Public Utilities officials and community members, who say it hurts low-income electric customers.
They’ve said that funding Click’s expansion on the backs of power ratepayers is illegal, especially since there are tens of thousands of Tacoma Power customers who can’t subscribe to Click.
In February, a former Tacoma mayor, a former city attorney and a former Tacoma Public Utilities director filed a legal claim against the city, asking that Tacoma Power be reimbursed for what they say is $21 million in subsidies to Click, which the utility has said is losing millions per year.
“It makes me wonder whether the claimants who have a suit against the city think that their case is so strong. It also looks like the state Legislature now is trying to put its thumb on the scale of that particular case,” Strickland said.
O’Ban said he believes that the subsidies are illegal under current law, but since city officials seem intent on pushing forward, he hopes to underscore the point with additional legislation. He said he is concerned that Click could be headed further in the red and cost ratepayers, namely low-income people already struggling to pay their electric bills, “more and more.”
So far, one co-sponsor has signed onto O’Ban’s measure: Sen. Hans Zeiger, a Republican from Puyallup. While Republicans control the Senate with the help of one conservative Democrat, the House has a Democratic majority.
O’Ban admitted that passing the bill this year is a tall task. He said he thinks it’s more likely that his bill gets traction in 2018. But he said he’s not ruling out the bill passing this year.
“The potential is there,” he said.
O’Ban’s bill would appropriate at least $100,000 in the state budget to allow the state auditor to review the operations of cities and towns with telecommunications services to make sure they’re complying with state law.
The Tacoma Public Utilities board voted last fall to fund Click’s expansion by using help from ratepayer funds. The City Council has not taken a vote on that proposal, and an audit of Click’s finances is underway.
A TPU spokesman said that if the bill was to pass, funding for Click’s expansion would have to come from rates on Click customers, or from other funds.