Tacoma Power favors BPA "SliceBlock" product as new long-term contract nears

At the May 6, 2025 meeting of the City of Tacoma Government Performance and Finance Committee, Tacoma Power staff briefed the committee on Bonneville Power Administration contract developments and said the utility plans to finalize a long-term BPA power contract later this year.

Leah Marquez Glynn, energy resource planning and evaluation manager in the power management section of Tacoma Power, told the committee: "We're near the end of a multiyear process of working with the Bonneville Power Administration to develop a long term power contract, and we plan to commit to the contract later this year." Rachel Gardiner Clark, Tacoma Power’s integrated resource planning manager, said Tacoma Power’s analysis continues to show the SliceBlock product is the best choice for the utility.

The matter matters because Tacoma Power relies heavily on BPA supply: the presentation said BPA accounts for about 60% of the utility’s generating portfolio. The staff presentation also said the BPA power bill accounts for "about 30" of Tacoma Power’s revenue requirement but did not specify units; that figure was stated in the slide deck without further clarification.

Bonneville Power Administration (BPA) is a federal power marketing agency that sells electricity produced by federal hydroelectric projects on the Columbia River and the Columbia Generating Station nuclear plant. Tacoma Power has been a BPA preference customer since 1940, staff said. BPA typically offers long-term contracts (up to 20 years); Tacoma Power’s current BPA contract began in 2011 and runs through 09/30/2028.

In the presentation, staff described the SliceBlock product as two components: a fixed monthly block of energy and a "slice" that provides a percentage share of the federal system and varies with hydrologic conditions. Rachel Gardiner Clark said the utility has operated with a SliceBlock product since 2015, developed internal models and operating procedures for it, and repeatedly found it to be the lowest-cost, most flexible option to meet future uncertainty in customer demand. "SliceBlock remains the best product option for Tacoma Power because it best enables us to meet customer needs into the future under a variety of different potential futures," Clark said.

Staff highlighted several attributes that informed the recommendation: low relative cost compared with new renewable-resource alternatives or spot-market purchases; low carbon intensity; and operational flexibility because hydro can be shaped across hours and seasons. The presentation noted that BPA is obligated to supply customers under low-water conditions, a reliability attribute staff emphasized staff believes is unique among resource options.

Committee members asked about risks that could affect BPA’s ability to deliver power, including temporary workforce reductions at BPA earlier this year. Leah Marquez Glynn acknowledged the concern and said the region’s customers had advocated to BPA leadership; she named BPA Administrator John Hairston as a leader in restoring staffing stability. Latasha Wortham, deputy director for customer experience and external affairs at Tacoma Utilities, added: "BPA is completely funded by customers. So the federal government actually doesn't put any money into BPA," and said customer advocacy across party lines had helped limit operational impacts.

Committee members also asked whether the contract addresses Tacoma becoming a balancing authority (it does not) and who signs the contracts; staff said once Tacoma signs its customer documents, the Bonneville administrator will countersign. Staff said they are routing an official notice of product selection to BPA immediately and aim to have a signed contract by late October 2025, while noting final timing could shift if federal policy or administration actions intervene.

Committee members raised other points including how excess generation is handled under SliceBlock (customers may idle their own generation or sell into the wholesale market), the possible effects of dam removals on BPA supply, and the limits of state law on resource choices (staff noted legal restrictions on some thermal generation options under Washington law). Staff said discussions about dam removal and broader regional policy would affect BPA supply considerations but that the current analysis supports keeping SliceBlock.

Tacoma Power did not present any formal action for committee approval at this meeting; staff said they would return with contracting steps and documents as the notice and contracting process advances.

A forward-looking note: staff emphasized the recommendation’s dependence on regional policy stability and BPA’s operational continuity; committee members asked for follow-up briefings on related topics such as dam relicensing and the utility’s generation portfolio as the contract process continues.