Tacoma Public Utilities

The meeting included an Energy Risk Management update for Tacoma Power, detailing wholesale net revenues, hydrologic conditions, and the Energy Risk Management program's objectives. A water condition update was provided for Tacoma Water, noting a declared drought, proactive storage measures, and runoff forecasts. The board reviewed major budget changes for the 2026 biennium across Tacoma Power, Tacoma Water, and Tacoma Rail, including infrastructure projects, capital budgets, personnel costs, and future rate planning. Additionally, the board held a closed session regarding labor negotiations and an executive session to discuss pending or potential litigation.

The board approved multiple contract actions including a waiver for direct negotiation for an Energy Management Systems software and hardware refresh project with Utilicast LLC. Additionally, the board approved a furniture procurement contract with Workpointe for Tacoma Public Utilities office and meeting spaces, and authorized a contract with Northwest Cascade, Inc. for the replacement of chemical feed lines at the Green River Filtration Facility to ensure continued water safety and operational standards.

The board discussed and authorized the acceptance of a $1,725,000 grant from the Washington State Department of Transportation to support a medium-duty zero-emission utility service vehicle pilot project. Key project components include the procurement of a battery-electric dump truck, mobile charging units, and the installation of on-campus charging infrastructure. The board also approved an increase in administrative authority for the Director to execute the associated grant agreement, ensuring the project proceeds without financial impact to ratepayers.

This document presents the preliminary findings of the Tacoma Power 2026 Integrated Resource Plan (IRP), a roadmap for providing reliable and low-cost power in an uncertain future. The plan assesses the current power supply and resource position, identifying no imminent need for additional energy resources but a likely need for additional capacity resources by the late 2030s or early 2040s to meet high load events. Key options for filling potential gaps include acquiring energy efficiency, ramping up demand response, and analyzing further hydro capacity and battery storage solutions. The overall objective is to strategically prepare for future energy demands and maintain resource adequacy.

This document presents a financial update for Tacoma Power, outlining revenue needs for the 2027-28 biennium and projections through 2036. It details a $160 million revenue gap, primarily driven by increased personnel expenses and lower anticipated wholesale revenues. The update explores various rate increase options, including 5.7%, 6.6%, and 7.8%, to address the shortfall while considering their impact on liquidity and debt service coverage. It also highlights measures taken to reduce rate pressure and compares Tacoma Power's rates with peer utilities, aiming to ensure responsible fiscal management, maintain fair and affordable pricing, and uphold an AA credit rating.