Weeks before scheduled power and water rate increases are slated to go into effect, a few members of the Tacoma City Council expressed concerns with the way Tacoma Power has structured the rate changes.
The council got a briefing from Tacoma Public Utilities staff on plans to increase power and water rates for the next two years at Tuesday’s study session, and rate increase ordinances were presented at the council meeting late Tuesday for a first reading.
Tacoma Power has proposed rate hikes averaging 5.9 percent across all rate classes for 2017 and 2018. Tacoma Water has proposed systemwide average rate increases of 4 percent for each of those two years.
Both rate increases were assumed in the 2017-18 budget the council approved. But the plan for power rate hikes — the first of which would go into effect April 1 — drew criticism Tuesday. It is the highest systemwide increase in rates since at least 2005, and the residential increase is structured as a flat-rate addition to the utility’s fixed monthly customer charge, with no increase in the kilowatt-per-hour rate that customers pay.
Residential customers now pay $10.50 per month for the fixed customer charge, which helps Tacoma Power recover the cost of bringing electricity to someone’s home — including the cost of metering, wires, poles, transformers and billing. Under the proposed rate hikes, that monthly customer charge would more than double over the next two years. It would increase by $5.75 a month in 2017, and by another $5.75 in 2018.
A few council members said they’re not comfortable with a fixed increase, which they said could de-incentivize conservation efforts and end up hurting low-income people who are low-energy users, such as those who live in small apartments.
I’ve not been a fan of flat-rate increases since I’ve come on the council, I’ve been very vocal about this over the years, so I’m hopeful that between now and when we get to the final reading, we can get something more of ahybrid approach.
Councilman Marty Campbell
“I’ve not been a fan of flat-rate increases since I’ve come on the council. I’ve been very vocal about this over the years,” said Councilman Marty Campbell, “so I’m hopeful that between now and when we get to the final reading, we can get something more of a hybrid approach,” with a smaller increase to the customer charge paired with an increase to the variable rate for using electricity.
Campbell said if that means the council has to vote down the proposal and send it back to the public utility board — which likely would make the utility miss its planned date for implementing rate hikes — he’s willing to do that.
Councilman Anders Ibsen said he too was uncomfortable with the approach to the power rate increase.
“I would favor something more based on use, or a hybrid in between,” he told power superintendent Chris Robinson at the council meeting. Councilman Ryan Mello, who participated in the meeting by phone, said he is also against it.
Tacoma Power staff members said part of the reason for the increase in the fixed customer charge is that the actual cost for the utility to connect each customer to the power grid is $25 a month. There is no plan to go beyond that number, Robinson said, and the rate increases would get customers up to $22 per month by 2018.
Creating a flat charge would benefit what the utility categorized as its many high users of electricity who are low income — often those who live in older, poorly insulated single-family homes with electric heat and face huge power bills.
Under the current situation, high users of power are subsidizing low users of power. The rate proposal would help balance that, he said.
The rate proposals are scheduled for a final reading and vote later this month.