On Aug. 1, 2023, Atlanta-based packaging manufacturer WestRock Company announced they are closing their Tacoma paper mill effective Sept. 30, 2023. WestRock has been among Tacoma Public Utilities’ largest industrial customers for nearly a century, using around $25 million worth of power and water each year.
The financial impact to Tacoma Water is greater than to Tacoma Power. Westrock’s usage accounted for approximately 1/3 of overall daily use of our water, equal to the water use of more than 100,000 homes and a significant revenue loss for the water utility.
Tacoma Water has a robust source of water, a best-in-class distribution system, and a strong financial position with plans to use reserves near-term to minimize future rate increases. To maintain that strength, immediate action will be necessary to mitigate impacts to our water utility from the unprecedented loss of this significant customer.
In response, our staff is reviewing ways to increase revenue from other sources and reduce costs by potentially delaying capital projects that will ease, but not eliminate, immediate cost pressures.
While the system will no longer have this large water demand on it, the infrastructure (pipes, filtration plant, reservoirs, water resources) used to serve WestRock and all other Tacoma Water customers will continue to require maintenance. There will be limited ability to remove segments of the system from service to reduce costs. These fixed cost assets are critical to our ability to reliably deliver clean, healthy drinking water to all customers.
As a not-for-profit utility, our rates only cover our cost to provide clean, reliable drinking water. To maintain our system and ensure we can continue providing some of the cleanest, healthiest drinking water in the nation, we will need to compensate for the loss of expected revenue by proposing drinking water rate increases. During fall 2023, staff will provide rate increase scenarios to policy makers for consideration. All proposed rate increases go through a public process and require Public Utility Board and Tacoma City Council approval.
For our income-constrained customers, we are proactively increasing the amount available in our Bill Credit Assistance Program to mitigate the impact of any proposed WestRock-related water rate increase. (https://www.mytpu.org/payment-billing/payment-information/payment-assistance/)
Tacoma Water Proposed Rate Increase Public Presentations to Policymakers:
- Aug. 23 – Staff presentation to Public Utility Board.
- Sept. 13 – Staff proposal to Public Utility Board.
- Oct. 11 – Public hearing on proposed Tacoma Water Rate Adjustment at Public Utility Board meeting.
- Oct. 17 -Potential Consideration by the Government Performance & Finance Committee of the Tacoma City Council
- Oct. 25 – Potential Public Utility Board Consideration of proposed WestRock related Budget and Rates Adjustments
- Nov. 15 – Potential Public Utility Board Consideration of proposed WestRock-related Budget and Rates Adjustments
- Nov./Dec. – Potential Tacoma City Council consideration
Neighborhood and Community Meetings – coming soon!
How you can get involved: