Tacoma Power plans to borrow $100 million

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Tacoma Power plans to borrow $100 million January 19, 2001, 07:45 AM TACOMA – Tacoma Power predicts it will spend its cash reserve by spring and is working to arrange $100 million in loans to pay rising electricity prices. The shortfall comes even after customers were hit with an average 50 percent surcharge last month.

RESOURCES • Special Report: Northwest Energy Crunch • Tacoma Power Meanwhile, the mayor and the director of Tacoma Public Utilities asked federal regulators on Wednesday to impose a cap on wholesale electricity prices.

Tacoma Power is part of Tacoma Public Utilities.

Meanwhile, Seattle City Light officials said Thursday they will need another 7 percent rate hike in October, bringing the total this year to 36 percent, if the Bonneville Power Administration goes through with a 30 percent rate increase on electricity sold to the municipal utility starting Oct. 1.

Tacoma Power implemented a 43 percent residential surcharge and a 75 percent surcharge for industrial users last month. It has $130 million in reserves but estimated it would spend around $225 million to buy power through next October. That's when BPA sets its new rates, and Tacoma Power will buy a large portion of power from it. Bonneville's prices are expected to increase by at least 15 percent.

The increase is less in Seattle because Seattle City Light generates more of its own power.

The Tacoma Utility Board and the City Council must approve the borrowing proposal. Tacoma Power Superintendent Steve Klein said he could bring up the proposal as early as next Tuesday.

"I know people will be shocked by the borrowing tool, but based on the situation today, no one thing solves the problem," Klein said Wednesday at the monthly meeting of the Northwest Power Planning Council in Vancouver. "We can't raise rates high enough."

Mayor Mike Crowley and Mark Crisson, director of Tacoma Public Utilities, met in two separate sessions with two members of the Federal Energy Regulatory Commission in Washington, D.C. to ask them to impose a cap in wholesale electricity prices in California, Oregon and Washington. Crisson said he would like to see it set between $100 and $150 a megawatt-hour.

Commissioner Key Breathitt seemed unresponsive, while Commissioner William Massey was more supportive, Crowley said.

Massey indicated he would not have enough support on the commission and Breathitt was the swing vote, Crisson said.

Even if the cap were approved, the surcharge could remain in effect, he said.

"It would allow us to gauge whether the surcharge should come off or be adjusted," he said.

The surcharge was planned to expire at the end of March. Crowley said he wasn't sure if the City Council would extend it.

Congress may consider placing a cap on West Coast energy prices but the two Tacoma officials hope the commission will impose the cap.

"FERC can do it on its own, and it would be quicker than Congress," Crisson said.

©2000 Associated Press.Tacoma Power plans to borrow $100 million January 19, 2001, 07:45 AM TACOMA – Tacoma Power predicts it will spend its cash reserve by spring and is working to arrange $100 million in loans to pay rising electricity prices. The shortfall comes even after customers were hit with an average 50 percent surcharge last month.

RESOURCES • Special Report: Northwest Energy Crunch • Tacoma Power Meanwhile, the mayor and the director of Tacoma Public Utilities asked federal regulators on Wednesday to impose a cap on wholesale electricity prices.

Tacoma Power is part of Tacoma Public Utilities.

Meanwhile, Seattle City Light officials said Thursday they will need another 7 percent rate hike in October, bringing the total this year to 36 percent, if the Bonneville Power Administration goes through with a 30 percent rate increase on electricity sold to the municipal utility starting Oct. 1.

Tacoma Power implemented a 43 percent residential surcharge and a 75 percent surcharge for industrial users last month. It has $130 million in reserves but estimated it would spend around $225 million to buy power through next October. That's when BPA sets its new rates, and Tacoma Power will buy a large portion of power from it. Bonneville's prices are expected to increase by at least 15 percent.

The increase is less in Seattle because Seattle City Light generates more of its own power.

The Tacoma Utility Board and the City Council must approve the borrowing proposal. Tacoma Power Superintendent Steve Klein said he could bring up the proposal as early as next Tuesday.

"I know people will be shocked by the borrowing tool, but based on the situation today, no one thing solves the problem," Klein said Wednesday at the monthly meeting of the Northwest Power Planning Council in Vancouver. "We can't raise rates high enough."

Mayor Mike Crowley and Mark Crisson, director of Tacoma Public Utilities, met in two separate sessions with two members of the Federal Energy Regulatory Commission in Washington, D.C. to ask them to impose a cap in wholesale electricity prices in California, Oregon and Washington. Crisson said he would like to see it set between $100 and $150 a megawatt-hour.

Commissioner Key Breathitt seemed unresponsive, while Commissioner William Massey was more supportive, Crowley said.

Massey indicated he would not have enough support on the commission and Breathitt was the swing vote, Crisson said.

Even if the cap were approved, the surcharge could remain in effect, he said.

"It would allow us to gauge whether the surcharge should come off or be adjusted," he said.

The surcharge was planned to expire at the end of March. Crowley said he wasn't sure if the City Council would extend it.

Congress may consider placing a cap on West Coast energy prices but the two Tacoma officials hope the commission will impose the cap.

"FERC can do it on its own, and it would be quicker than Congress," Crisson said.

©2000 Associated Press.

http://www.king5.com/localnews/storydetail.html?StoryID=12383

-- Martin Thompson (mthom1927@aol.com), January 22, 2001


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