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Tacoma OKs 43% Surcharge by Martha Modeen, Staff Writer The News Tribune, December 20, 2000

ELECTRIC RATES: City Council reluctantly imposes higher cost until March 20

Tacoma city officials barely could stomach the idea, but they took a deep breath, swallowed hard Tuesday night and approved a 43 percent surcharge on residential electric rates.

The average consumer now can expect to see the monthly electric bill increase to $124 from $85 for a home heated with electricity.

But the council agreed to impose the surcharge only until March 20 instead of through September, as requested earlier.

After more than three hours of discussion and often emotional testimony from the public, council members approved the surcharge after seesawing back and forth on their votes.

Mayor Brian Ebersole capped 20 years of public service and his last council meeting as Tacoma's mayor by providing the swing vote needed to pass the surcharge. He acknowledged early Tuesday night that to not approve it would cause the city's utility to "flirt with bankruptcy."

Yet Ebersole nearly voted against the surcharge because he wanted to send a strong message to federal officials to clean up an energy mess that's trickled down to municipalities. The stronger message, Ebersole decided, was to approve the surcharge that essentially declared an emergency.

The surcharge was approved 6-to-3, with council members Bill Evans, Dave De Forrest and Steve Kirby voting against the measure. Six votes were needed to approve the emergency ordinance because it will take effect immediately.

"It's a very close call which will force the issue the most," Ebersole said, explaining his vote. "This is not a real remedy."

Some of Ebersole's colleagues, however, disagreed.

"While I am not ready to bankrupt our utility, I am not ready to bankrupt our businesses," said Evans, a local businessman.

Other council members said they, too, didn't want to hurt businesses or residents but felt their hands were tied.

"I see no other option," said Councilman Mike Crowley.

For the better part of three hours, city residents filed to the microphone to express their opposition to the surcharge.

"Our public utility is squeezing a public that has little left to squeeze," said Teri Hudman, an East Side resident.

"Please try to think of some way to help us out," said Keith Stone, who owns Tacoma's Freighthouse Square.

One Tacoma Power executive, clenching his jaws as he watched council deliberations Tuesday night, heaved a sigh when the council approved the surcharge. Without it, the utility would see its reserves dwindle to zero by the end of February, he said.

"You saw something truly amazing tonight," said Steve Klein, Tacoma Power superintendent, adding that city officials did "the correct thing."

Public outcry and lack of council support for an 86 percent surcharge on residential rates last week prompted Tacoma Power executives to cut their request in half. But they said they still could return in February and ask for further rate surcharges if energy consumption fails to decline and prices continue to escalate.

Volatile energy markets on the West Coast and near-critical water levels for power-producing dams have sent electricity prices into the stratosphere within the last three weeks, Klein said.

Tacoma Power in recent weeks has paid as much as $2,800 per megawatt-hour for power it was selling to customers for $25 per megawatt-hour, resulting in a substantial loss.

"Right here, we have a major crisis," said Skip Vaughn, utility board chairman.

During a Tuesday afternoon study session, council members suggested voluntary blackouts and selling the city's Click! network to avert a surcharge. But, for now, the notion of selling the city's network for cable television and high-speed Internet access is on hold.