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Tacoma Power proposes 6% wholesale transmission rate increase; staff estimates $2.6M annually from BPA
Summary
Tacoma Power presented an open-access transmission tariff update that would raise the annual transmission revenue requirement from about $26.7M to $35.8M, translating to roughly a 6% rate change and an estimated $2.6M in additional annual revenue attributable to Bonneville Power Administration. The committee voted to forward the ordinance to council.
Tacoma Power staff told the Government Performance & Finance Committee Feb. 3 that cost pressures since the utility last updated its open access transmission tariff have raised its transmission cost-of-service estimate to about $35.8 million from roughly $26.7 million, producing an approximately $9 million increase in the annual revenue requirement.
"After evaluating the most current cost, we determined our cost of service has increased to about $35,800,000 so there will be a $9,000,000 increase," presenter Jing Liu said. Tacoma staff translated that figure into a network-integration and point-to-point rate increase equivalent to roughly a 6% annualized change over the prior schedules. Because the Bonneville Power Administration uses about 26% of Tacoma's transmission load, staff estimated Tacoma would get about $2,600,000 per year under the revised rates from BPA's load share.
Staff told the committee the tariff updates also include edits to terms and conditions (Attachment O) to better reflect current market functions; those edits do not change rates. The draft tariff and proposed schedule were posted on the public transmission website before the meeting, staff said, and Tacoma Power reported it had discussed the draft with BPA and received questions.
During Q&A, committee members asked whether BPA is the only current wholesale transmission customer (staff said yes) and whether additional revenues flow to the utility system rather than the city's general fund (staff confirmed revenues support the utility and offset retail costs). Staff also noted a recent Federal Energy Regulatory Commission order that limits charging for certain reactive-power services; Tacoma zeroed out that specific charge in the schedule while reserving language that would allow a future charge if a customer's power factor falls outside the standard range.
Committee members also raised wildfire risk as a source of future cost pressure; Tacoma Power said it maintains a wildfire mitigation plan and continually evaluates risk and costs. Staff said the utility has a long-term transmission contract with BPA that runs through 2028 and that the proposed tariff would take effect April 1, 2026 if approved following the legislative process.
A committee member moved and a second was recorded to forward an ordinance updating wholesale transmission and ancillary-service rates to the full City Council for consideration; the motion passed by voice vote.
