Who Will Bear The Cost Of Tacoma's LNG Plant?

Aug 8, 2016

Plans for a terminal that would make and store liquefied natural gas at the Port of Tacoma are moving closer to reality.  But there’s still a question of how the costs should be divvied up. 

Puget Sound Energy, the private utility hoping to build the plant, is in talks with state regulators over how to structure the corporate entity that would run the facility — essentially a chilled steel tank wrapped in three feet of concrete. 

One question is which costs the utility’s customers should cover and which costs should fall to the utility’s investors and shipping companies that would buy some of the fuel. 

Puget Sound Energy and the state Utilities and Transportation Commission, which oversees the utility’s rates, are in mediation over the issue and met before a judge Aug. 3. 

Construction of the plant is estimated to cost $275 to $300 million, said Puget Sound Energy spokesman Grant Ringel. 

“Our utility ratepayers will pay for only the portion of the facility that they use,” Ringel said. 

More than half of the facility would store liquefied natural gas for utility customers to tap on the coldest days of the year, when demand spikes, he said. 

The TOTE Maritime shipping company would buy some of the gas to replace a dirtier-burning fuel in its two Alaska-bound vessels. And other ships could fuel up at the facility as well. 

Activists raising environmental and safety objections to the plant are questioning the use of ratepayer money for the project. 

“This is a private venture,” said John Carlton, a Tacoma resident who helped organize the citizens’ group RedLine Tacoma. “It doesn’t make sense that our rates should be attached to this venture’s investment risks.” 

No timeline has been set for a decision. The Utilities and Transportation Commission’s three members must eventually approve any agreement, said commission spokeswoman Amanda Maxwell. 

Corrected on August 9, 2016 - An earlier version of this report incorrectly identified the body that would approve the agreement as the Utilities and Exchange Commission.  In fact, it is the Utilities and Transportation Commission.