Seattle - New research finds that much of the increase in Tacoma's electric bills can be traced to Tacoma Public Utilities' (TPU) misguided attempt to enter the telecommunications market. Tacoma ratepayers are being asked to shoulder higher energy costs today because TPU drained its reserves to build the Click! Network.

The Washington Institute, a free-market think tank, released a study today, "When Government Enters the Telecommunications Market An Assessment of Tacoma's Click! Network," which finds lack of reserves and the need to make up Click! Network losses have figured into TPU's decision to impose a 50% surcharge on local electric bills, and its need for an additional $100 million in borrowing authority. The misuse of reserves financially weakened TPU and made it less able to cope with sharply rising energy prices, the study finds.

In 1997, TPU embarked on an ambitious experiment to build a publicly funded telecommunications system. The system was intended to provide high-speed access for cable television, data transmission and Internet services for TPU customers.

"Given what is happening with energy, TPU should stick to its knitting: providing reliable, affordable power to the people of Tacoma," said Paul Guppy, author of the study.

The study compares the plan's promises with actual results and assesses the rising cost of Click! Network. As of September 2000, the Click! Network lost $15.7 million. Combined with the $86.5 million in capital expenses already dedicated, the system has spent a total of $105 million since its inception. Losses that add up to about $709 in new costs for each of the utility's 148,000 power customers; whether they use the Click! Network for their cable needs or not.

"The Click! Network remains a serious drain on TPU's resources, showing once again that government agencies are not well-suited to run a business," said Washington Institute President, Daniel Mead Smith.