How much will your water and electric bill go up? Tacoma utilities propose rate increase

Liz Moomey
Peter Haley/phaley@thenewstribune.com

Tacoma Power and Tacoma Water customers might see an increase in their bills if a proposed rate increase is approved.

Tacoma Public Utilities is facing inflationary pressures, like many households and other businesses, Jim Sant, deputy director for administration for Tacoma Public Utilities said at the city of Tacoma’s government performance and finance committee Tuesday.

The rates will be finalized by TPU’s board next week. Tacoma Public Utilities will seek approval from Tacoma City Council in November.

Tacoma Power provides electrical service to more than 181,000 customers in Tacoma, Fircrest, University Place, Fife, parts of Steilacoom, Lakewood, Joint Base Lewis-McChord and unincorporated Pierce County.

For Tacoma Power customers, the proposed rate adjustments, which would be an average of 3.5% increase for 2023 and 2024 are:

  • 3.9% for residential;

  • 1.5% for small general (small businesses);

  • 5% for general, which are large businesses, such as schools, restaurants, hospitals;

  • 7% for street and highway lighting;

  • 6.9% for private off-street lighting;

  • No change for high voltage general, contract industrial and traffic signals and lights.

Sant said the public, not-for-profit utility would have enhanced residential customer assistance in its biennium budget and rate proposal.

Chris Robinson, superintendent of Tacoma Power, said 2021 rate increases were lower than what the utility originally anticipated because of COVID-19.

“There was a lot of uncertainty about how the pandemic would impact the economy and our customers, so we recommended lower rate increases than we otherwise would have,” Robinson said. “Ideally, we would have been in the range we are currently recommending, but we just couldn’t do it given the uncertainty at the time.”

The utility lost about $50 million in revenue, which would have been used to fund capital work, other projects and hiring, he said. Tacoma Power relied more on debt financing.

He said retail revenue decreased by about 5% when businesses closed due to the pandemic, which is now back to normal.

Inflation is impacting Tacoma Power, Robinson said. There is a massive cost increase “on virtually everything we buy,” like transformers that have gone up by 65%.

Robinson also said Tacoma Power renegotiated a contract with about 300 of its employees that included wage increases, some up to 18%. The new contract cost $27 million.

The budget also accounts for significant modifications to Tacoma Power’s bill credit assistance program, which would increase the budget contribution of about $5 million, he said. Expanding the program would more than mitigate the rate increase for qualifying customers who meet current household income eligibility requirements.

More than a dozen organizations called on Tacoma Power this week to revise its Bill Credit Assistance Program to expand eligibility, improve ease of access and increase the amount of guaranteed monthly assistance. Native Daily Network, the Sierra Club, 350 Tacoma and other organizations said in a letter that excessive energy costs force low-income Washingtonians to choose between paying electricity bills and buying food.

“Robust energy assistance programs can alleviate existing energy burden, while also ensuring that historically marginalized communities see reductions, not increases, in energy burden as Washington homes and housing transition from polluting fracked gas to renewable electricity,” the letter stated.

Tacoma Water is proposing an annual system average rate increase of 4%, which would be about $1.73 per month in 2023 and $1.80 per month in 2024 for the average residential customer in Tacoma.

Tacoma Water serves more than 101,000 residential customers and about 7,000 commercial and industrial customers in Pierce and King counties.

For Tacoma Water customers, the proposed rate adjustments are:

  • 4.2% for residential;

  • 2.9% for commercial;

  • 2.2% for large volume;

  • 4.7% for irrigation;

  • 0.7% for private fire;

  • 1.7% for wholesale;

  • 4% for pulp mill.

Jody Collins, Tacoma Water’s financial stewardship manager, said the utility used long-term planning and a gradual approach to avoid spikes for customers. It is also expanding customer assistance.

Like Tacoma Power, Tacoma Water is challenged by high inflation and supply-chain issues.

“We’re seeing increases in our operational costs from everything from rent utilities to fleet maintenance and fuel, the longer lead times and increased costs,” Collins said.

Collins said the last budget cycle was during the beginning stages of the pandemic, and Tacoma Water developed a lean budget that deferred resource requests and projects in order to have a lower rate adjustment.

Collins said the long-term rate increases would be 3.5% for 2025-2028 and 3% for 2029-2034.

Customers can weigh in on the rate proposals at Tacoma Public Utilities’ board meeting at 6:30 p.m. on Sept. 28 by commenting in-person at the Tacoma Public Utilities Auditorium, 3628 S. 35th St., virtually or submitting a comment or question through TPU’s online form.

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