Tacoma Water outlines long-term wholesale deal with Cascade Water Alliance; seeks council first reading March 4

Tacoma Water staff presented a proposed wholesale water supply contract with the Cascade Water Alliance to the Government Performance and Finance Committee on Feb. 18, 2025, outlining two linked agreements: a perpetual wholesale contract and a temporary market agreement running from 2041 to 2062.

The council briefing described how the permanent deal would use Tacoma's published wholesale rates under the Tacoma Municipal Code and include a one-time system development charge of about $50,800,000. The temporary market agreement would provide shorter-term capacity — roughly 12 million gallons per day (MGD) average, about 17.5 MGD peak in presentation figures — and include a capacity reservation fee and a variable volumetric charge. "This agreement is essentially in the same shape as all of our other wholesale agreements," said Sean Senskall, a Tacoma Water staff member, explaining the pricing structure. "They will be paying essentially buying into [surplus capacity] with this one-time system development charge."

Why it matters: Tacoma staff said the two agreements together are intended to manage financial risk, preserve existing revenue streams, and use surplus system capacity following the recent departure of the WestRock pulp mill. Staff projected approximately $1.5 billion in revenue from the arrangement through 2075 and roughly $120 million in gross earnings tax receipts, though they emphasized those figures will vary with future demand and rate assumptions.

Details of the agreements and finances - Two linked agreements: a perpetual wholesale agreement (uses Tacoma's wholesale rate and includes the system development charge) and a…